[Congressional Record (Bound Edition), Volume 154 (2008), Part 3]
[Senate]
[Pages 3576-3599]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                                  2009

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will proceed to the concurrent budget resolution, which the 
clerk will report.
  The bill clerk read as follows:

       A concurrent resolution (S. Con. Res. 70) setting forth the 
     congressional budget for the United States Government for 
     fiscal year 2009 and including the appropriate budgetary 
     levels for fiscal years 2008 and 2010 through 2013.

  Mr. CONRAD. Mr. President, I would like to be informed when I have 
used 45 minutes.
  The ACTING PRESIDENT pro tempore. The Chair will so inform the 
Senator.
  Mr. CONRAD. Mr. President, we come to the floor with a budget 
resolution that came out of the committee last week. I think it is 
important to set the stage in recognition of the fiscal condition of 
the country as we present this budget.
  We have seen a dramatic deterioration in the budget situation under 
this President. As we all know, he inherited a budget that was in 
surplus; in fact, a budget that was estimated to have a future of 
surpluses so large that the head of the Federal Reserve said we were in 
danger of paying off the Federal debt. That is a danger I would like to 
have.
  The President then took us on a fiscal course that has produced four 
of the five largest deficits in our history. In fact, it may turn out 
to be five of the largest deficits in our history, depending on how 
events unfold this year.
  We can see in the previous years we were having budget surpluses, and 
then the President took us into deficit and deepened those deficits 
until we

[[Page 3577]]

reached a record deficit in 2004 of $413 billion. Now we see those 
levels being challenged in this year and perhaps next as well.
  The result of these massive deficits is this President has built a 
wall of debt that is unprecedented. When President Bush came into 
office in 2000, the debt at the end of his first year--we do not hold 
him responsible for his first year because he is working on the budget 
he inherited--the debt stood at $5.8 trillion. At the end of last year, 
the debt had reached over $9 trillion. And by the end of 2009, which 
will be for the 8 years for which he is responsible, we will see the 
debt will have risen to over $10 trillion. This President will almost 
have doubled the debt of the United States in just 8 years.
  Not only will he have almost doubled the debt of the country, the 
gross debt, all of the money we owe, but he will also have more than 
doubled what we owe to foreign nations. It took 42 Presidents, all the 
Presidents pictured here, 224 years to run up a $1 trillion of U.S. 
debt held abroad. This President has more than doubled that amount--
much more than doubled that amount--in just 7 years. The result of that 
is we now owe Japan almost $600 billion. We owe China almost $500 
billion. We owe the United Kingdom over $150 billion. We owe the oil 
exporters almost $140 billion, and so it goes.
  That is a warning sign to all of us about the fiscal condition of our 
country. The long-term projections are sobering as well. Partly as a 
result of this tremendous buildup of debt, the value of the dollar has 
shrunk rather dramatically. This chart shows the dollar against the 
Euro. It has gone down 40 percent since 2002. Anybody who has traveled 
has seen that in what they buy abroad. We see it in the prices of goods 
that are being imported. We also see it in terms of the kinds of 
reactions we are getting in the marketplace to further American 
indebtedness. We are hearing warnings from people who are saying: 
United States, you have to get your fiscal house in order. You cannot 
keep running up these massive debts and deficits.
  We see that during this period of the Bush administration that 
economic growth has lagged previous recoveries. We have gone back and 
looked at all of the major recoveries since World War II. There have 
been nine previous recoveries. At the same point in the business cycle, 
the economy had typically grown at an average pace of 3.4 percent a 
year during those previous recoveries.
  Look at what is happening here. In this recovery, the average GDP 
growth is only 2.5 percent, well short of what we have seen at the same 
point in previous economic cycles.
  Now we have a new element to consider, and that is a housing slump 
with new home building falling dramatically. We have seen this pattern 
which comes to us from the Census Bureau, U.S. Department of Commerce. 
This is monthly data through January 2008. These are housing starts in 
millions of units, and we can see that housing starts have plunged, and 
plunged dramatically. We also have word that inventories of unsold 
homes are growing, and growing dramatically; that foreclosures are 
running at a very alarming rate. And all of this signals trouble in the 
economy.
  There are other indicators as well. If we look at business investment 
in this economic period versus what we have seen in the nine previous 
recoveries since World War II, that growth of business investment is 
lagging in this business cycle by 52 percent. That should tell us there 
is something amiss in the economic policy of this administration. 
Something is not working. Certainly by comparison with previous 
business cycles, the nine significant business cycles since World War 
II, this one is showing much more weakness than the previous nine.
  That is also true in job creation. If we look at the nine previous 
business cycles--that is the dotted red line on this chart, and this 
business cycle is the black line--we are now 9.6 million private sector 
jobs short of the typical business cycle, going all the way back to 
World War II.
  There are a lot of alarm bells that are ringing, warning signs to 
which we need to pay attention and need to respond to in a budget. We 
have seen real median household income decline by almost $1,000 under 
President Bush, from $49,163 in 2000 to just over $48,000 in 2006, the 
last year for which we have complete statistics.
  Mr. President, these numbers cry out for a response. And the first 
way that we respond is in a budget because the budget sets the policy 
priorities for the coming year. And we have attempted to do that in 
this budget by emphasizing strengthening the economy and creating jobs 
by doing the following: investing in energy, education, and 
infrastructure.
  Those are the top three priorities to help strengthen the economy. 
Invest in energy. Why? To reduce our dependence on foreign oil. We are 
now spending $1 billion a day buying foreign oil. How much better off 
would our country be, how much stronger would the economy be if we were 
generating our own energy rather than importing it from around the 
world?
  So part of this budget is designed to reduce our dependence on 
foreign energy and to strengthen our education and our job training 
because if we are not the best educated and best trained, we are not 
going to command the strongest economy for very long.
  Also, to build our infrastructure. We all remember the incredible 
sight of the 35-W bridge collapsing last year. I think we all recognize 
that our airports, our rail lines, our highways and bridges need 
serious investment if we are going to be competitive globally.
  We also need to expand health coverage for our children, provide tax 
cuts for the middle class, and restore fiscal responsibility by 
balancing the budget in 4 years and maintaining balance in the fifth.
  Mr. President, we also want to make America safer by supporting the 
troops, by providing for veterans health care, by protecting the 
homeland, and rejecting the President's cuts in law enforcement. For 
example, he eliminates the COPS Program. He cuts first responders' 
grants by 78 percent. We don't think that makes sense, and we reject 
those cuts in this budget.
  Mr. President, we now anticipate that economic growth is going to 
slow sharply in this year. We can see it all around us--more job 
layoffs announced today, dramatic slowing of the economy. Economists 
today are saying they believe our country is already in recession. Of 
course, we will not know for several months, but it has all the 
appearance of a reduction in economic growth. The Congressional Budget 
Office is forecasting for this year an economic growth of only 1.6 
percent, down from the 2.5 percent pace over the course of 2007 and 2.6 
percent in 2006.
  And, by the way, these were already weak economic growth numbers. 
2006 was weak, 2007 was weak, and CBO is expecting even weaker growth 
in 2008. So in this budget resolution we provide for a second stimulus 
package. We have already had one stimulus package to try to increase 
aggregate demand in the economy, to give a lift. We believe it is 
prudent to provide the room in the budget for a second stimulus 
package, some $35 billion of standby authority, so if this economy does 
continue to shed jobs and to weaken that we are prepared to respond and 
prepared to respond in these ways:
  Housing relief. We have legislation on the floor now to provide 
relief for what is happening in the housing market. That package is a 
$16 billion or $17 billion package that could be accommodated in this 
$35 billion of standby stimulus relief.
  Also, we may need to extend unemployment insurance and provide for 
additional funding for food stamps or perhaps State fiscal relief. We 
know 21 of the States are increasingly in difficult financial straits, 
so we may need to extend some relief to them.
  This budget also provides room for additional funding for low-income 
heating assistance and the WIC Program, the women, infant, and 
children's feeding program, and/or infrastructure spending in 2008.
  When we did the last stimulus program, we asked the agencies of the 
Government if they had construction projects that were ready to go--
where

[[Page 3578]]

the engineering has been done, the design has been done, the land 
acquisition is finished--and all they need is money to begin 
construction and to begin hiring people. And they told us, yes, they do 
have projects like that. So we have provided for taking up some of 
those projects as part of the stimulus package.
  Why? Because we know in road building, highway construction, and 
bridge construction that for every $1 billion, there are about 45,000 
jobs created. And, Mr. President, we think it is very important that 
standby authority be ready to go if indeed this economy weakens 
further.
  We also provide for tax relief in this budget resolution: the 
alternative minimum tax. If something is not done, it will affect 20 
million more American families this year--the alternative minimum tax. 
So we provide an additional year's relief from that levy.
  We also provide the energy tax incentives necessary to reduce our 
dependence on foreign oil, education tax incentives to make college 
more affordable for American families, and we provide the stimulus 
package, where I previously described some of the provisions, and they 
help the housing industry. Our tax provisions would fit in that $35 
billion package; for example, extending net operating loss provisions 
to home building companies so they aren't buffeted by further write-
downs of their assets at the worst possible time.
  And, of course, the important tax extenders, those permanent 
provisions that are about to expire that provide for the research and 
development credit, the wind energy credit, and the like, those are 
provided for in this budget resolution as well.
  The first amendment that will be offered to this budget will be to 
extend the middle-class tax provisions previously enacted. Those 
provisions are about to expire, and we want to extend them. Those are 
the marriage penalty relief, the child tax credit, and the 10-percent 
bracket. There is room in this budget to extend them all and still 
balance the budget in 4 years.
  There is also room in this budget for estate tax reform along the 
lines of what we advocated last year. As you know, we faced this 
unusual situation where the exemption per person, the $3.5 million next 
year but the year after, in 2010, there will be no estate tax. In 2011, 
the estate tax comes back with only $1 million per person exemptions. 
So we provide the continuation of the $3.5 million exemption per person 
and have that indexed for inflation.
  Mr. President, there is not an American family who doesn't know what 
is happening to gas prices. I was just talking to my staff this morning 
about what they are experiencing. One of my staff--who was caught up in 
a horrendous traffic jam yesterday coming from Baltimore and took 2\1/
2\ hours to get here--filled up, and it cost $3.18 a gallon. I filled 
up the other day, and it was over $3.20 a gallon. There are some 
projections now that gas is going to go to $4 a gallon. Look what is 
happening just since 2001 when gas was less than $1.50. It has more 
than doubled in just those 7 years, and we see it continuing to jump. I 
am told oil prices today are also rising on world markets. There was 
some speculation that oil might reach $108 a barrel today on the world 
market.
  So to address this continuing problem of energy dependence, we are 
proposing in this budget to invest in energy, to create green jobs, to 
reduce our dependence on foreign energy, to strengthen our economy, and 
to help with high home heating costs. We have to do that a package of 
energy tax incentives of over $13 billion, $3.5 billion over the 
President's budget in discretionary funding for energy, and an energy 
reserve fund for investing in clean energy and the environment.
  We all know there are global climate change initiatives coming before 
Congress. If any of those are adopted, we are going to need a reserve 
fund like this to prepare for it.
  Education is also a great challenge to us. We see from the National 
Science Foundation a chart that compares what is happening to 
bachelor's degrees in engineering in the thousands in China versus what 
is happening here. You can see we are pretty well flat, with about 
75,000 engineers a year being produced. But look what has happened in 
China. China is now up to a rate of producing more than 350,000 
engineers a year. That should serve as another alarm to us because we 
know engineering is critical to economic growth. And if you are 
producing many more engineers, you are laying the foundation for 
stronger economic growth in the years ahead.
  I chose that as just one example. We know there are many others where 
we face global competition for doing the best job of educating our 
young people. So this budget resolution invests in education. It does 
it to generate economic growth and jobs, to prepare the workforce to 
compete in the global economy, and to make college more affordable and 
to improve student achievement.
  We seek to do that by providing some $13 billion in education tax 
cuts, some $5.7 billion in funding over the President's budget in 
discretionary money for the Department of Education and Head Start, and 
a $2 billion education reserve fund for school construction and higher 
education reauthorization.
  But it doesn't end with energy and education, Mr. President. It also 
extends to the challenges in infrastructure. We all remember this very 
striking picture from last year when the bridge on 35-W collapsed 
between Minneapolis and St. Paul. That is a bridge I traveled over many 
times when my wife was in medical school at the University of 
Minnesota, and I think all of us, our hearts went out to those people. 
Imagine the horror of driving home from work and having the bridge fall 
out from under you. We know there were lives lost and people injured. 
That should not happen. That should not happen anywhere in America. It 
shouldn't happen anywhere in the world.
  Mr. President, we know there are deficiencies in the infrastructure 
funding for highways, for bridges, for airports, and for rail, and all 
of those are going to have to be strengthened and improved. This budget 
begins the process. It begins the process by creating a reserve fund to 
allow for major infrastructure legislation.
  We have had a group of the country's business leaders come to us and 
tell us they have a plan they think could generate a multiplier effect 
in terms of matching public sector investment with private sector 
investment to build infrastructure in this country. We have created a 
reserve fund to allow for the adoption of such legislation if the 
committees of jurisdiction proceed, and if they pay for it, if they 
provide offsets for it.
  We also provide $3.9 billion more than the President for key 
discretionary transportation accounts in 2009, and we provide another 
$6.5 billion to fully fund highways, fully fund transit, increase 
funding for airport improvement, and fund ready-to-go infrastructure 
projects.
  Those are projects that are ready to be built; they only lack the 
money. We also fix the highway trust fund shortfall that exists. I 
think that is roughly $1.4 billion that needs to be dealt with.
  We not only have challenges and opportunities in education and energy 
and infrastructure, but we also have them in health care. We can see 
the number of uninsured children in our country has jumped by 700,000 
just in the year 2006. We went from 8.7 million uninsured children to 
9.4 million. So this budget seeks to make wise and careful investment 
there to improve health care, to expand coverage, to increase health 
research, and to promote food and drug safety. We do that by again 
providing for a reserve fund that will allow the $35 billion children's 
health insurance compromise that was adopted last year but vetoed by 
the President to once again proceed this year.
  We also provided $4.4 billion over the President's budget in 
discretionary funding for health and a reserve fund to address the cut 
in Medicare physician payments and make other improvements to Medicare. 
We know the doctors of the country are scheduled for a very sharp cut 
in Medicare payments. I think that is rejected here virtually 
universally. But we have to do

[[Page 3579]]

something about it. We provided a reserve fund to address that, so 
later this year Congress will be able to act.
  The budget resolution also provides $3.2 billion above the 
President's for our veterans. We know that veterans funding in the 
President's budget is $44.9 billion. We have provided $48.2 billion in 
funding for our veterans. This is focused on veteran health care, 
primarily in terms of veterans because we all recognize that is an area 
in which we simply must do better if we are going to keep the 
commitment that was made to our veterans.
  In terms of war funding and defense funding, we match the President's 
request. He has asked for $2.9 trillion over the next 5 years, and we 
matched that amount in this budget--$2.9 trillion.
  The budget also provides $2.3 billion more than the President's 
budget for law enforcement and first responders. This is an area which 
I find utterly inexplicable in the President's budget. President Bush 
sent this Congress a budget that eliminates the COPS Program--
eliminated it. He did not just cut it, he eliminated it. The COPS 
Program has put 100,000 police officers on the streets in this country, 
put over 250 police officers on the street in my State of North Dakota. 
Why the President would eliminate the COPS Program eludes me.
  He has also proposed cutting the first responder grants; that is for 
emergency medical personnel, that is for our firefighters and our other 
first responders. He has proposed cutting these grants 78 percent. We 
have rejected those cuts in this budget at a cost of $2.3 billion.
  While we have restored funding in certain key priority areas and made 
targeted investments in reducing our energy dependence and promoting 
education and in building our infrastructure, we have also sought to be 
fiscally responsible by balancing the budget by the fourth year and 
maintaining balance in the fifth.
  Those are the numbers that are in the budget resolution, but this is 
before we extend the middle-class tax cuts. When we extend the middle-
class tax cuts, these numbers will drop dramatically, but we will still 
be in surplus, we will still be balancing by 2012, by the fourth year, 
and be maintaining balance in the fifth. But we do think it is 
critically important to extend the middle-class tax cuts and to reform 
the estate tax, which previous legislation has left in a chaotic state, 
I think would be a fair way to say it.
  We also, under this budget resolution, bring down the debt as a share 
of gross domestic product each and every year. Again, this is before 
the amendment to extend the middle-class tax cuts, but you will see the 
same pattern after we extend the middle-class tax cuts--the debt as a 
share of GDP going down each and every year of the 5 years--because we 
think that is critically important for the long-term economic health of 
the country.
  This is a comparison of spending under the resolution and the 
President's budget. The red line is the President's spending line, the 
green line is ours. You can see there is very little difference. That 
is a difference of 2.1 percent in overall spending over the 5 years. So 
we do have some additional spending to meet these priorities in 
education and energy and infrastructure and reducing the cuts the 
President proposed for law enforcement, weatherization, and other 
priorities.
  Spending as a share of GDP under the resolution goes down each and 
every year, from 20.8 percent of GDP in 2009 to 19 percent of GDP in 
2013, applying the spending discipline that I think is necessary, that 
I think most of us would say is necessary if we are going to address 
these problems of deficit and debt. The first thing we have to do is 
bring down the deficit, and this budget seeks to do that.
  We also, for this year, for 2009--this shows the overall spending 
difference for this year. I have showed the spending comparison for 5 
years showing that we are spending 2.2 percent more, but I think it is 
also important to look at 2009, the first year of this 5-year budget, 
on overall spending. We are spending 1 percent more than the 
President--1 percent more.
  Some say: Well, you should not spend more than the President did. But 
the problem is, he had cuts that I do not think are broadly embraced by 
the American people. I do not think they think we should eliminate the 
COPS Program. I do not think they think we should eliminate 
weatherization. I do not think they believe we should cut the grants to 
first responders, our emergency personnel, by 78 percent. I do not 
think the American people think we should fail to invest in reducing 
our dependence on foreign energy. I do not think that is what the 
American people want. I do not think they believe we should continue to 
dramatically underfund infrastructure, which leads to bridges 
collapsing in our country. So we have spent more than the President--in 
total for 2009, 1 percent more. That 1 percent will go to those high-
priority areas of energy, education, and infrastructure.
  On the revenue side, this is the comparison when the middle-class tax 
cuts are extended. We will have 2.6 percent more revenue than in the 
President's budget--2.6 percent more revenue than in the President's 
budget.
  Now, this shows that difference in revenue. The President's budget 
has $15.2 trillion over the 5 years, and our budget is $15.6 trillion--
a 2.6-percent difference. Because we have more revenue, of course, we 
have the ability to fund in those high-priority areas but still balance 
the budget in the fourth year and maintain balance in the fifth. 
According to the Congressional Budget Office, the President's budget 
does balance in the fourth year but then promptly falls back out of 
balance in the fifth year. Our budget not only balances by the fourth 
year but stays in balance in the fifth.
  Now, this is where we get into the question of, Well, how do you come 
up with 2.6 percent more revenue than the President has? I believe you 
can come up with the 2.6-percent more revenue than the President has by 
looking at three areas: the tax gap--that is the difference between 
what is owed and what is paid. The Internal Revenue Service tells us 
that for 2001 the tax gap was over $300 billion; that is, the vast 
majority of us pay what we owe, but some do not. Before we ask for a 
tax increase from anyone, I think we ought to go to those who are not 
paying what they owe. Now, I think that is the first thing we ought to 
do before we ask for a tax increase from anyone.
  But it is not just the tax gap, it is also those offshore tax havens 
that are proliferating and costing us a lot of money. There is a report 
from the Permanent Subcommittee on Investigations from February of last 
year. This is what they 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 engaging in offshore 
     tax evasion. Abusive tax shelters add tens of billions of 
     dollars more.

  Shame on us for allowing this kind of abuse to occur. Let me say, 
there have been some in this Chamber who have made a serious effort to 
close this kind of scam down, and I would be the first to recognize the 
ranking member of the Finance Committee, Senator Grassley of Iowa, who 
has been very serious about going after not only abusive tax shelters 
but offshore tax havens.
  Here is an example of what is going on. There is a little five-story 
building in the Cayman Islands called Ugland House, a nice little 
building; 12,748 companies call it home. Mr. President, 12,748 
companies say they are doing business out of this little five-story 
building. Can you imagine having 12,000 companies conducting business 
out of that little building? Of course they are not conducting 
business; the only business they are conducting is monkey business 
because what they are doing is cheating all of the rest of us who pay 
our taxes. They are engaged in very ambitious tax scams and tax schemes 
to avoid paying what they owe in this country.
  Here is a picture of a building that was in the Boston Globe. Let's 
put up the Boston Globe story. This was a building that is also in the 
Cayman Islands where shell companies allowed KBR to avoid Medicare and 
Social Security deductions.

[[Page 3580]]

  This story says:

       Kellogg, Brown and Root, the nation's top Iraq war 
     contractor, and until last year a subsidiary of Halliburton, 
     has avoided paying hundreds of millions of dollars in 
     Medicare and Social Security taxes by hiring workers through 
     shell companies based in this tropical tax haven.

  So what they were doing is hiring people paid for by American 
taxpayers, hiring them for contracts, and they were running them 
through these shell operations down in the Cayman Islands, and by doing 
that they were avoiding paying their Medicare and Social Security taxes 
to this country and saved hundreds of millions of dollars, according to 
this story in the Boston Globe from March 6 of this year. This is just 
days ago that this story appeared.
  They point out:

       More than 21,000 people working for KBR in Iraq, including 
     10,000 Americans, are listed as employees of two companies 
     that exist in a computer file on the fourth floor of a 
     building on a palm-studded boulevard here in the Caribbean. 
     Neither company has an office or phone number in the Cayman 
     Islands.

  They do not even have a phone number. They do not even have a real 
office. What they have is a scam. This is the kind of scam we ought to 
shut down.
  Here is the building, a very nice building. On the fourth floor of 
this building, apparently 21,000 people are supposedly employed, at 
least for the purpose of records.
  Now, it does not stop there. This is a story from late last month in 
the New York Times:

       U.S. among countries investigating tax evasion.

  This is in Liechtenstein. I have never been to Liechtenstein. I am 
sure it is a lovely place. But the Internal Revenue Service says:

       It was beginning enforcement action against more than 100 
     U.S. taxpayers on suspicion of evading taxes through 
     investments in Liechtenstein.

  They have the Deputy Director of the Center for Tax Policy and 
Administration at the OECD saying Liechtenstein is the tip of the 
iceberg. Indeed, it is.
  This kind of scam is going on down in the Cayman Islands, going on in 
Liechtenstein, going on in other tax haven places, but it is also 
happening with abusive tax shelters. Last year, I showed pictures of 
European sewer systems. People might ask: What does a European sewer 
system have to do with revenue in the United States? It turns out it 
has a lot to do with it because it turns out U.S. companies are buying 
European sewer systems. Later on in this debate I will show a picture 
of one of those. It may not be the most welcome picture on the Senate 
floor, of a European sewer system, but, nonetheless, this is part of an 
incredible scam that is going on in which U.S. companies buy European 
sewer systems, write them off on their books in the United States for 
tax purposes, and lease them back to the European cities that built 
them in the first place. That should not be allowed. That is not fair 
to the rest of us who pay what we owe.
  Last year, when we went after some of these scams, the President 
threatened a veto. He said that would be a tax increase. I guess it 
would be a tax increase on those who are getting away without paying 
what they fairly owe, but I don't consider it a tax increase to make 
people pay what they already owe. I don't consider it a tax increase to 
shut down a tax scam. I don't consider it a tax increase to shut down 
these abusive tax shelters.
  We tried to codify economic substance, prohibiting transactions with 
no economic rationale, done solely to evade taxes. We tried to shut 
down schemes to lease foreign subway and sewer systems and depreciate 
assets. We tried to end deferral of offshore compensation by hedge fund 
managers trying to evade current taxation. We tried to expand broker 
reporting. We tried to tax people who use expatriation to evade taxes. 
Over and over the President said: No, I will have to veto because that 
would be a tax increase.
  I think the President has it entirely wrong. Those are not tax 
increases. Those are just making those folks pay what the rest of us 
are already paying.
  In this budget we provide a number of enforcement mechanisms to try 
to help restore some fiscal discipline. We have discretionary caps for 
2008 and 2009. We maintain a strong pay-go rule. We have a point of 
order against long-term deficit increases. We allow reconciliation for 
deficit reduction only, and we have a point of order against mandatory 
spending on an appropriations bill. These are important enforcement 
mechanisms that ought to be part of any budget resolution. They are 
part of ours. I hope they are adopted by my colleagues.
  Finally, this budget resolution has provisions addressing long-term 
challenges. More daunting than any of our short-term problems is where 
this is all headed. We can't pay our bills now; that is, before the 
baby boomers retire. What is going to happen then? What is going to 
happen to the commitments that have been made in Social Security and 
Medicare? What is going to happen with this tremendous imbalance 
between spending and revenue? We have offered these three elements as 
part of an approach, understanding that the larger plan to deal with 
our fiscal problems is going to have to come in some sort of special 
process, a process that Senator Gregg and I have offered our colleagues 
to create a task force with 16 Members--eight Democrats, eight 
Republicans--and ask them to come back with a plan as to how to deal 
with long-term imbalances.
  In this resolution, we have comparative effectiveness reserve fund 
and cap adjustment to deal with health care. One of the things we know 
is that lots of different health modalities are being used across the 
country to address illness. Some of them work and some don't. We have 
to know which ones work.
  Second, we have program integrity initiatives to crack down on waste, 
fraud, and abuse in Social Security and Medicare. In fact, I received a 
letter from the Secretary of Health, Secretary Leavitt, thanking us for 
the program integrity funds that we have included so that he can 
continue his important investigations to shut down these Medicare fraud 
operations that he found in Florida and other parts of the country last 
year and that he is continuing to crackdown on.
  He found a circumstance in which you go to these strip malls, and 
half of the offices in the strip malls are front organizations 
collecting Medicare payments. You go to the door and nobody is there 
during the day, during work time. They are just billing mills. They are 
sending out Medicare bills. Goodness knows if any service is actually 
being extended or not. But these are scams that are operating that need 
to be shut down.
  We also have a point of order against long-term deficit increases 
which is important to any strategy to contain burgeoning deficits and 
debt.
  Before yielding the floor, I want to ask our colleagues for their 
cooperation. This is going to be an especially challenging budget. The 
numbers are very close on the two sides. We have two Presidential 
candidates on this side. They have a Presidential candidate on the 
other side. We know they may not be here for all of the deliberations. 
That means we are going to have to coordinate and cooperate. We also 
have a Member on our side who is ill. That means we will have a special 
challenge getting the budget done this year, but we must do it. We must 
get it done. I will be asking for all of our colleagues' cooperation as 
we proceed.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Cardin). The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, the chairman spoke about his budget. For 
Senator Gregg, the ranking member of the Budget Committee, I would like 
to start this debate on the Republican side. Since we are on the budget 
resolution, Senator Gregg would usually open debate for our side of the 
aisle. He wanted to take the lead today but has a necessary conflict in 
his schedule. He asked me to substitute, and I am pleased to do so. 
Senator Gregg will be here tomorrow to give what is normally the 
opening statement by the senior member of the Budget Committee on the 
Republican side.
  I am going to first talk about the process and recent history of the 
Senate budget resolutions. Almost all of

[[Page 3581]]

the revenue side of the budget is Finance Committee jurisdiction. Most 
of the spending side of the budget is also Finance Committee 
jurisdiction. For those of us who sit on the Finance Committee, we need 
to pay very careful attention to the budget. Chairman Conrad, along 
with Senator Wyden of Oregon and Senator Stabenow of Michigan, are all 
Finance Committee Democrats. This Senator, along with Senators Bunning, 
Crapo, and Ensign are all Finance Committee Republicans.
  When I was Finance chairman for part of the year 2001 and all of the 
years 2003 through 2006, there was coordination regarding the fiscal 
resources and fiscal demands on the Finance Committee. That 
coordination occurred with respect to revenue levels, spending levels, 
and reconciliation instructions. Did we always agree over those years? 
The answer is no. Did we compromise when we had disagreements? The 
answer is most often yes. We did have some different priorities, but we 
worked through those differences during this committee's budget 
process. We came up with compromises that largely held together. I 
might add, those compromises and the levels regarding revenue spending 
and reconciliation instructions were in sync with the administration. 
My point is that we hashed out the fiscal differences in the Budget 
Committee and on the Senate floor. The committee and floor debate, 
amendment votes, both pro and con, made a very real difference. The 
product of that process, the budget resolution that we will vote on as 
the last vote probably this week, the product made a real difference.
  Those budget resolutions, though not perfect, provided me, while I 
was chairman of the Finance Committee, with the budget resources to 
deal with the policy demands on the Finance Committee. Most often, I 
used these resources to guide the Finance Committee, usually in a 
bipartisan manner, to deal with short-term, midterm, and even long-term 
problems. Last year was different. After the people spoke in the 
November 2006 elections, control of the Senate changed from Republican 
to Democrat, and the budget resolution was basically a Democratic 
resolution.
  This year we see some repetition of last year's dramatically 
different fiscal path. As with the rest of the Budget Committee 
Republicans, I learned about this resolution for the first time when 
the chairman of the Budget Committee put the markup document before the 
committee. Committee Democrats were consulted extensively, along with 
the Democratic caucus. Most of the Republicans' knowledge prior to 
markup was derived from what we read in the press. I don't say this to 
be critical of the Democratic leadership. It is unfortunate but perhaps 
necessary that budgets are usually partisan documents. So I would say, 
with all due respect to the chairman, the chairman's mark was developed 
exclusively by Democrats in a partisan fashion.
  Republicans, during committee markup, used that markup to educate 
ourselves, others on the other side, and the public. We asked 
questions. I pursued questions about how this budget deals with the 
resources and demands that fall on Senator Baucus and me in our 
respective roles as chairman and ranking member of the Finance 
Committee. We offered a relatively small number of amendments. Most 
were defeated; some accepted.
  On reforming farm program payment limits, I am pleased to say Senator 
Allard's amendment prevailed on a rollcall vote. That amendment 
improved this resolution, though not enough to gain the support of 
Senator Allard, this Senator, or any other Republicans.
  Before I discuss the substance of the budget, I want to start off by 
complementing the chairman of the committee and his staff. They 
conducted the markup in a professional manner. The Democratic and 
Republican members have sharp, well-intentioned reasons for coming down 
in different places on the budget resolution. We were able to debate 
those differences in a full and fair manner.
  I know if Senator Gregg were here speaking today, he would make these 
points as well. We are at the Senate floor stage of the budget on 
process. What I would like to do is step back and take a look at the 
budget from three vantage points. It is kind of like we farmers do 
before planting season. We look at the condition of the soil and 
prospects of various crops. The first vantage point will be looking at 
what the budget purports to do. From this angle, I am going to look at 
what the Democratic leadership says the budget is designed to do and 
whether those purposes make sense from a fiscal standpoint. The second 
vantage point will be looking at how well the budget carries out its 
stated purpose. The third vantage point will be looking at what the 
reconciliation would mean for the Senate. I will address the 
reconciliation in a separate speech later. I believe I will wait until 
tomorrow to do that.
  Let's start off with the first question: What does the Democratic 
leadership say this budget is designed to do? Then, after stating what 
they say it does, we need to look at the fiscal consequences of that 
policy.
  The budget's proponents claim it is all about fiscal responsibility. 
There are two basic parts to the Federal ledger: the revenue part and 
the spending part. If we spend more than we take in, then the Treasury 
sells more debt. This has been the pattern of much of the post-World 
War II period. If we spend less than we take in, then the Treasury buys 
back debt.
  When we look at this budget over the short term, it contains a 
material increase in spending. Over the next fiscal year, the 
discretionary spending rises by 9 percent over last year's spending.
  Now, how many Americans got a 9-percent raise? How many American 
families raised their discretionary household spending by 9 percent? On 
the spending side of the ledger, spending, then, goes up, and I say 
fairly dramatically. You would think proponents of fiscal 
responsibility would be looking at spending cuts, not 9 percent 
increases.
  It is a different story on the other side of the ledger, the revenue 
side. Let me start off with one smidgeon of good news on the revenue 
side in this budget resolution. The alternative minimum tax patch 
expired the first day of this year. If that patch is not addressed, 25 
million families, most of them middle-income families, would pay an 
average of at least $2,000 in AMT this year. The chairman reduced the 
revenue baseline by $62 billion, which is a revenue loss from extending 
that patch. All middle-income Americans ought to thank the chairman of 
the Budget Committee--and I thank him on the Senate floor right now--
for that provision.
  Unfortunately, for years beyond 2008, pay-go still applies, so there 
is a big Senate hurdle built into this budget to patching the 
alternative minimum tax in years beyond 2008.
  The rest of current law expired or expiring tax relief provisions 
will need to be offset with other tax increases. There are also several 
bipartisan tax bills that would require offsetting tax increases under 
this budget. That is a very large tax increase over the next fiscal 
year. My staff calculates that tax increase to be roughly $150 billion.
  The definition of ``fiscal responsibility'' under this budget, over 
the fiscal year, is higher spending of $22 billion and higher taxes of 
$150 billion. Is that a legitimate fiscal goal? Is that the notion of 
fiscal responsibility the American people were looking for when they 
turned congressional power over to the Democrats in November 2006? Did 
we in Congress misread those results? Did the people really want us to 
increase spending and to raise taxes?
  Now, that is not what I am hearing from back home. What I heard from 
folks across Iowa was: Rein in spending. Live within your means.
  It seems to me if you are going to assume the mantle of fiscal 
discipline, you ought to treat a dollar of new tax relief the same as a 
dollar of new spending.
  What do I mean by ``new spending?'' I mean spending above the 
Congressional Budget Office baseline. And what do I mean by ``new tax 
relief?'' I mean new tax policy that loses revenue. I do not mean 
extension of existing tax policy.
  We see the same pattern over the 5-year period of this budget. Over 5

[[Page 3582]]

years, the tax hike and the spending increases grow exponentially. On 
the spending side, discretionary spending grows by $211 billion. When 
you throw in the special reserve funds, you can add another $300 
billion in new spending on top of that.
  Over the 5 years, the budget assumes a dramatic tax increase--at 
least $1.2 trillion. In 2011, the bipartisan tax relief plans of 2001 
and 2003 will expire. Some folks will call these provisions the Bush 
tax cuts. It is true President Bush signed both bills, but the 
bipartisan compromises occurred in the Finance Committee. In 2011, 
President Bush will have been gone from office by more than 2 years. He 
will probably be hanging around his ranch in Crawford, TX. You can call 
this package of tax relief for virtually every American the Bush tax 
cuts, but for the taxpayer, if we let them expire, it will be a big tax 
increase, and it will be a big tax increase that will happen without 
even a vote of Congress.
  So I have a couple charts in the Chamber. The charts use the analogy 
of a brick wall to show the ugly tax increases Americans are going to 
face.
  On this chart, you see a family of four. That is the average American 
family. Here is the husband, his wife, and two children. The family 
makes $50,000 a year in income. That is right about the national median 
household income today. For example, the Census Bureau stated, for 
2006, the national median household income was $48,200.
  Under the Democratic leadership's budget, this family will face a tax 
increase of $2,300 per year. You see the figure $2,300 for that family 
of four. That is a loss in their paycheck of about $200 per month. It 
is a hit on their yearly budget of $2,300. Where I am from, the 
Midwest--or anyplace in this country, I will bet--that is still a lot 
of money.
  Now, I have another example. This next chart has the same brick wall 
but a different family: a single mom with two kids. Here we have a 
person earning about $30,000 a year. In 2011, under this budget, she 
and her family run straight into that brick wall--that brick tax wall. 
That is a brick wall of about $1,100 per year of taxes. That is almost 
$100 a month out of this family's budget.
  So when you hear folks rail against the 2001 and 2003 bipartisan tax 
relief plans, you will hear a lot of talk about millionaires, you will 
hear a lot of talk about the death tax, but you will not hear the 
critics talk about these two families--a family of four: husband, wife, 
and two children; or a single mother with two children. You will not 
hear these critics--almost all of whom voted against these two tax 
bills--consider these two families.
  Now, those on the other side will point to the Baucus amendment that 
will be upcoming--at least we have heard about the Baucus amendment--as 
the answer to the tax increases that I have pointed out. Isn't it 
ironic that my friend, our chairman, my partner from the 2001 tax 
relief bill, and several other tax relief bills, is the author of this 
key amendment?
  The Senator from Montana, my friend, Mr. Baucus, took a lot of heat 
for working with me in a bipartisan fashion in 2001. He took a lot of 
heat from people in his caucus, quite frankly. Many on the other side 
who fought him and that bill were also denying tax increases in last 
year's budget. So they now turn to his amendment--this upcoming 
amendment--as they did last year, to try to deflect the tax increase 
charge because there is a real charge in what is in this budget. If 
something is not done to stop tax increases, they are going to happen 
automatically. And don't let anybody tell me something cannot be done 
about it.
  At Budget markup, we were told the Baucus amendment would contain 
enough revenue room--$323 billion--to accommodate extension of several 
components of the bipartisan tax relief plans that go back to 2001. We 
were told the 10-percent bracket, the marriage penalty, the child tax 
credit, and some death tax relief would be covered.
  There were provisions that were not intended to be covered. The 
excluded provisions were the lower rates for capital gains and 
dividends and other marginal rate reductions.
  Now, some on the other side will describe this excluded group--
excluded from the Baucus amendment--as top-rate taxpayers and other 
high-income people. Now, I hope you will not believe it. The facts are 
otherwise.
  Low-income folks, including millions of seniors, pay no tax on their 
dividend or capital gains income. If this budget stands, even with 
Senator Baucus's amendment, millions of these low-income taxpayers, 
especially senior citizens, will pay a 10-percent rate on capital gains 
and could pay as high as a 15-percent rate on dividends.
  I have a couple charts to show how wide the dividend and capital 
gains tax increases would be. The chart that is up now deals with just 
dividends. It shows the number of taxpayers claiming dividend income. 
Nationally, over 24 million families and individuals reported dividend 
income--24 million Americans. There are 24 million Americans, all of 
whom you are not going to call filthy rich. Very few of them you are 
going to call filthy rich.
  In my State of Iowa, for instance, over 299,000 families and 
individuals claimed dividend income on their returns. Now, there are 
not 299,000 millionaire families or even 299,000 people in Iowa you can 
call filthy rich.
  As to capital gains, you can see the numbers not only for my State of 
Iowa, but you can see the numbers for all the other States in the 
United States. You can see them for the entire United States up there 
on the chart. Nationally, we are talking about over 9 million families 
and individuals. In Iowa, we are talking about 127,000 families and 
individuals when it comes to capital gains.
  I want to emphasize, I went from dividends to capital gains. The 
chart has changed to tell you what there is in each of the respective 
States on capital gains.
  There are many marginal rates, other than the top rate, that would 
rise if this budget stands, even with the Baucus amendment. The 25-
percent rate, which for 2007 starts at $31,850 for singles and $63,700 
for married couples, would rise 3 percentage points to 28 percent. The 
28-percent rate, which for 2007 starts at $77,100 for singles and 
$128,500 for married couples, would rise 3 percentage points to 31 
percent. The 33-percent rate, which for 2007 starts at $160,850 for 
singles and $198,850 for married couples, would go up to 36 percent. 
The top rate would rise from the current 35 percent level to 39.6 
percent.
  To sum up, even with the Baucus amendment--even with the Baucus 
amendment added to this budget, there would be marginal rate increases 
on millions of taxpayers, and not millions of millionaire taxpayers. 
Those marginal rate increases would go up, whether it is the 28 percent 
to 31 percent or the 33 percent to 36 percent or what have you. Those 
marginal rate increases would reach taxpayers with incomes as low as 
$31,850 for singles and $63,700 for married couples, and these people 
are not filthy rich.
  Now, what I just described is accurate only if the Democratic 
leadership intends to follow the letter and spirit of the Baucus 
amendment. If you look at last year's track record, the House neutered 
the effect of the amendment in the conference agreement. They created a 
Rube Goldberg type of mechanism to impede the amendment. Of course, 
after the budget conference report was agreed to, all talk and action 
around the amendment ceased. So I wouldn't put much stock in the 
followthrough on the Baucus amendment, and things can only get worse 
for middle-income taxpayers beyond that point.
  This budget asks a lot of the taxpaying population--about $1.2 
trillion worth of a lot being asked of taxpayers. That is a big chunk 
on the revenues ledger. Compare that to what is going on on the 
spending side of the ledger. The answer is $211 billion more spending 
on the discretionary side. Nothing is proposed to rein in any 
entitlement spending. If the definition of fiscal responsibility is 
higher spending, no entitlement savings, and dramatically higher taxes, 
then this budget is fiscally responsible. Keep in mind that while 
ramping up $1.2 trillion on the taxpayers, the budget spends $775 
billion of the Social Security surplus and

[[Page 3583]]

grows the gross Federal debt by $2 trillion.
  For those on our side, this budget is not fiscally responsible. We 
don't agree that the definition of fiscal responsibility is higher 
spending, no entitlement savings, and dramatically higher taxes. For 
those of us on the Republican side of the aisle, you can't solve all 
fiscal problems just on the tax side of the ledger.
  Now I wish to go to the second part of my discussion and annualize 
the tax side of the budget. I am looking at how this budget will carry 
out its objectives.
  Let's take a look at the short term. By the short term, I am 
referring to the fiscal year of the budget, and this chart here is for 
the fiscal year. This is the first fiscal year. That is the first 
fiscal year out of five fiscal years.
  A lot of people from farm country get their water from wells. When 
the well water is low, you can either dig it deeper, cut back water 
use, or pay to have the water trucked in. This well shows the extra 
demands on the revenue side of the budget. That is the bucket: $152 
billion. These demands reflect the extenders for this year and next 
year. The bucket contains next year's AMT patch because under this 
budget, that has to be offset. The bucket also covers pending 
bipartisan tax legislation, and that is bipartisan because it is 
generally agreed that we ought to do some of this tax legislation. All 
of these items are listed on the chart for my colleagues to add up.
  The water in the well represents known, specified, and scored 
revenue-raising proposals supported by the Senate Democratic caucus. 
Included are $35 billion in Finance Committee-approved offsets and $29 
billion that has been approved elsewhere. That total, then, is the $61 
billion you see at the bottom of the well.
  When you net the offsets against the demands, you find an offset 
shortfall of $91 billion. Somehow, you have to find a way to fill up 
that well if you are going to offset everything where there is a 
bipartisan agreement of what ought to be offset. The upshot of the 
analysis in this chart is that known offsets cover only about 40 
percent of the revenue needed to carry out pending time-sensitive tax 
legislation that there is a great deal of bipartisan support for and 
bipartisan agreement that it ought to pass and some of it ought to be 
passing very shortly.
  Now, some on the other side will probably respond with three 
counterpoints, so I want to anticipate that--not that I am going to 
stop them from responding. The first will be that the committee tax 
staffs will find the additional $91 billion that is needed to fill up 
the well. The second will be a claim that offshore shelter activity is 
a vast, easily tapped revenue source. The third counterpoint will be 
that closing the tax gap can yield the necessary revenue.
  As far as those three points are concerned, in the preceding 
presentation by the chairman of the committee, my colleagues heard some 
of these points expressed already.
  On the first point, I would refer everyone to the track record of the 
tax staffs to the period 2001 to 2006. During that period, I chaired 
for 4\1/2\ years and Senator Baucus chaired for 1\1/2\ years. During 
that period, we changed the tax shelter rules and closed numerous 
corporate loopholes. If you don't believe me, then just go down and ask 
the K Street crowd of highly paid lobbyists who defended or fought 
every one of those. During that 6-year period, an active Finance 
Committee tax staff was able to achieve $51 billion in enacted revenue 
raisers. That figure should give everyone some perspective of what is 
doable. It is very hard to find that revenue.
  Now, some on the other side will argue for my second point that the 
offshore activities will produce up to $100 billion a year. The 
anecdote alluded to usually referred to fraudulent activities. Of 
course, tax fraud is a crime now. Perhaps we could continue to make 
progress on this front with more enforcement, but the figures bandied 
around have no Joint Tax or Treasury scoring that I am aware of.
  I will expand on this point in a separate discussion later on in this 
week when we have some more debate on it. But it is tough to get the 
revenue that is alluded to in the speeches we are going to hear this 
week.
  The third counterpoint is that the tax gap will yield a readily 
available, easily tapped revenue source. As a preliminary matter, let 
me say that the tax gap is a serious tax policy and a serious 
administration issue. I have devoted a lot of time and energy to 
closing the gap over the last few years, as the chairman of the 
committee, Senator Baucus, is doing in his recent chairmanship.
  Unfortunately, as IRS officials have told us in several hearings, the 
tax gap number currently estimated to be $250 billion net annually is 
not the same thing as a revenue estimate. They have cautioned us to be 
careful about designing tax gap closure measures that are driven by 
unrealistic revenue targets in unrealistic timeframes.
  When we went through the tax gap discussion last year, these points 
were disputed by some on the other side. With a Senate Democratic 
majority in place for over a year, we may have a bit of a yardstick to 
use to see just how much revenue can come in. Let's take a look at the 
claims on tax gap revenue and how we have done.
  We have three charts that I hope will help us understand. The first 
chart is the tax gap reality check. My colleagues can see it here. We 
see some big numbers. This chart takes the form of an inverted pyramid, 
as my colleagues can see. At the top of the chart is gross tax gap. 
That is what appeared in the budget resolution markup document, the 
last year that the IRS testified that the improvements in collections 
have brought the tax gap down by $55 billion to a net tax gap of $290 
billion.
  As we work our way down the inverted pyramid, we go to the tax gap 
proposals. There are two categories. The first is the Treasury tax gap 
strategy set of proposals. On an annualized basis, these proposals 
raised $3.6 billion per year.
  Some of these proposals have proved controversial on both sides of 
the aisle. Many are complicated and wide-ranging and may need further 
work. It is not by accident that they are still a work in progress.
  The second set of proposals comes from the Joint Tax Committee's 
white book. This pamphlet, requested by Senator Baucus and me--and we 
requested this a few years ago--was published in late January 2005. A 
note of caution is in order about the chart's figures. The $44 billion 
annualized figure includes many tax expenditure reform proposals. Some 
tax gap proponents have strongly opposed the mixing of these proposals 
with pure tax gap proposals. I will speak in more detail about these 
proposals as we go on in this week's debate. If one were to delete the 
tax expenditure reform proposals from this figure, it would drop 
considerably.
  For purposes of this exercise, I am going to use the full set of 
Joint Tax proposals. If we do that and add them to the Treasury 
proposal, we come away with roughly $44 billion per year in tax gap-
related proposals.
  As a side note, a couple of recently enacted tax gap proposals have 
run into rough sledding with the new majority. The first proposal is 
from the 2005 Joint Tax book. It deals with withholding on contractor 
payments enacted in 2006. Ways and Means Democrats are seeking to delay 
it. In addition, many House and Senate Democrats are insisting on 
repealing another tax gap measure, this one dating from 2004, providing 
supplementary private debt collectors. If enacted, the Joint Tax scores 
that proposal as actually losing revenue.
  As we work our way further down the inverted pyramid that I call the 
tax gap reality check, we total up enacted tax gap provisions. During 
the fiscal year of the new majority, we find $572 million of enacted 
tax gap provisions. The enacted provisions represent two-tenths of 1 
percent of that great big, gigantic figure that we call tax gaps--just 
two-tenths of 1 percent. Now, that ought to give anybody pause when you 
are putting this year's budget together and you are anticipating a lot 
of money coming in from this source.

[[Page 3584]]

 What experience we have had hasn't produced a lot of revenue.
  Let's look at the demands on the tax gap revenue in this budget. We 
have another chart. It totals up the proposed uses of the tax gap 
revenue. This chart is in the shape of a pyramid--the way a pyramid 
ought to be, not upside down.
  Listed in the first category is annualized tax relief and spending 
demands in the budget that are assumed to be offset by, and among other 
things, this tax gap revenue. You can see that they total $314 billion 
per year. I have accounted for the Baucus amendment's annualized impact 
of $65 billion. So the net demand on the annual tax gap is about $249 
billion. If you have been following the charts and the arithmetic, you 
can see that the budget uses almost all of the tax gap revenue, up to 
about 85 percent.
  Keep in mind that the track record is that only $572 million of tax 
gap raisers were enacted last year. To give you perspective, you can 
look at the ratio of demands on tax gap revenue to the revenue raised 
from enacted provisions. That is what this chart does. The ratio is 435 
to 1. There are $435 of proposed tax gap uses in the budget for every 
$1 of enacted tax gap revenue.
  When you look over these numbers, it should lead to a healthy 
skepticism of using tax gap revenue as some sort of instant revenue 
source to accommodate all the spending this budget proposes to do. We 
ought to listen to the career statistics of income folks over at the 
Internal Revenue Service. When they tell us not to treat the tax gap 
number like a revenue estimate, they are on pretty solid ground. It 
doesn't mean we should not be aggressive about the tax gap. We should. 
But the thirst for quick-and-dirty revenue raisers should not drive the 
strategy for dealing with this important problem.
  I wish to step back and summarize the last two major points.
  The first point is that this budget does represent the priorities of 
the Democratic leadership. It is put forward with the stated objective 
of achieving fiscal responsibility. The budget dramatically raises 
taxes, increases spending considerably above the already generous 
baseline, and does nothing about entitlements. Most experts agree that 
entitlement spending, left unchecked, will cannibalize the rest of the 
budget. From the perspective of the Republican caucus, this fiscal 
blueprint is not fiscal responsibility.
  The second point is that an examination of the budget, even from the 
perspective of its own proponents, shows that it doesn't work. There is 
too much pressure on the revenue raising. We have raised revenue from 
closing corporate loopholes. We have raised revenue from anti-tax 
shelter measures. I am proud of the Finance Committee's track record in 
that regard. We have enacted $51 billion in loophole closers and 
antishelter measures for the period of 2001 to 2006. There are not, 
however, enough loophole closers to offset the time-sensitive tax 
legislation we face in the first fiscal year of this budget. We have, 
likewise, found revenue in policing offshore shelters and other 
activities, but it fits under the umbrella of loophole closers and 
other tax shelter oversight.
  Finally, the tax gap is an important problem that needs to be 
tackled, but targeting revenue from closing the tax gap needs to be 
more realistic than it is in this document. This budget anticipates 
revenue that is incredibly out of line with our track record of 
bringing in money from the tax gap, as worthy as closing the tax gap 
is. There has to be a reality check between what is out there and what 
people at the IRS say we can collect, and they are much more aggressive 
at that because of the leadership of Senator Baucus. But will it bring 
in the revenue? We have shown that it will not, based upon the practice 
we have had.
  When you step back from the differences across the aisle on this 
budget, you probably won't be surprised to find similar differences 
among the Presidential candidates of the two parties.
  Generally, the candidates on the other side have proposed to take 
heavily from the taxpayer under the guise of fiscal responsibility. 
This is true when they are talking about ending the bipartisan tax 
relief plans of 2001 and 2003. It is true when they are talking about 
the same loophole closers for a myriad number of expansions of existing 
entitlements or creating new ones. Nowhere is there discussion of 
reining in spending. So the tax side of the Federal ledger is the only 
route to fiscal responsibility from the perspective of the candidates 
on the other side.
  I want to give one telling example. I have a chart here that shows 
the revenue from the key revenue raisers from one of our colleagues on 
the other side. That proposal would repeal the bipartisan tax relief 
plans for taxpayers earning above $250,000 a year. This proposal raises 
$226 billion over 5 years and 10 years. A key fact is that the source 
of that revenue peters out over the next few years because under 
current law the tax relief sunsets at the end of 2010. You can see it 
right there. Let the tax laws work the way they want them to work, and 
the revenue doesn't come in.
  Like the Democratic leadership's budget, the candidates on the other 
side oversubscribe the revenue sources from proposals that are popular 
with the Democratic base. The deficiency can only be made up in three 
ways: One, the undefined sources of revenue would need to be tapped. 
Taxpayers should rightly be worried about that revenue. Secondly, the 
proposed spending plan would need to be abandoned or curtailed. There 
is not much history on that side for doing that, taking that avenue. 
Third, add to the deficit for the cost of the new programs. 
Unfortunately, this avenue has been taken far too many times--by both 
political parties, I am sorry to say.
  We will hear a lot of criticism of our candidate, Senator McCain, 
from those on the other side. They will argue, like the President's 
budget, that a continuation of current-law levels of taxation ``costs'' 
the Federal Government too much revenue. They will argue that the 
spending increases they propose are more important than the restrained 
levels of the President's budget. They will argue that, despite the 
record tax hikes in their budget, entitlement reform is a matter for 
another day.
  I have a chart that I believe helps set the basis of this larger 
debate. It shows the glidepath for revenue under current law. It shows 
that trend in the post-World War II context. You will see revenues 
average about 18.3 percent of the economy. That is the dotted line 
across there, so for those years since 1968 until now. And what we 
propose would be a continuation of that policy; we have averaged, with 
what the Federal Government is taking in from all sorts of taxes and 
Federal Government levies, about 18.3 percent of gross national 
product. That means that 535 Members of Congress are going to decide 
how to spend 18.3 percent of the total economy of our country and that 
the taxpayers are going to spend the other 81.7 percent. You will also 
see that the state of the economy affects revenues more than anything 
else. There are dips when we have been in recession and peaks when 
growth was high.
  Our side cares about keeping the revenue line at a reasonable level. 
We don't see the merits of an imperative behind a growing role for 
Government in the economy. I say that because a 40-year history of 
about 18 to 19 percent of the total economy being used by the Federal 
Government has been a level that has not been so high that the public 
has revolted against it. They might revolt at times, when it gets way 
high and we have tax decreases to bring it back down. Also, I think you 
can say that at that level of taxation, it hasn't been harmful to the 
economy. As you have seen each generation during this period of time, 
they have lived better than the generation before. Our economy has done 
well.
  When you argue about 18.3 percent being the right figure, often the 
other side disagrees. If they don't disagree directly, their policies 
help us draw a different conclusion about whether they agree or 
disagree. They impliedly or explicitly reject our premise that the size 
of Government needs to be kept in check.
  We have another chart. It is a copy of an editorial, dated October 
22, 2007,

[[Page 3585]]

from the New York Times. I suppose that is pretty small print for the 
public to read. The lead-off paragraph says it best:

       President Bush considers himself a champion tax cutter, but 
     all the leading Republican Presidential candidates are eager 
     to outdo him. Their zeal is misguided. This country's meager 
     tax take puts its economic prospects at risk and leaves the 
     Government ill equipped to face the challenges from 
     globalization.

  The bottom line of the editorial directly states the view behind this 
budget and the position of the Democratic candidates for President. 
From this perspective, the historical level of taxation is not 
appropriate as a measure.
  The New York Times implies that the Federal Government must grow as a 
percentage of our economy by at least 5 to 8 percentage points. If we 
were to follow the path suggested by the New York Times, the 
Government's share of our economy would grow by one-third. The 
Democratic leadership's budget takes some big steps down that path. So 
do the campaign proposals of the Democratic Presidential candidates.
  Our Republican conference takes a different view. America is a 
leading market economy. American prosperity and economic strength, in 
our view, is derived from a vigorous private sector that provides all 
Americans the opportunity to work hard, save, and invest more of their 
money. A growing economy is the best policy objective. It makes fiscal 
sense as well.
  I have one more chart to back up the point that it makes fiscal 
sense. My last chart shows that despite criticisms to the contrary, the 
bipartisan tax relief plan drove revenue back up after the economic 
shocks we suffered in the early part of this decade because of a 
recession and because of 9/11.
  I am referring to the stock market bubble, corporate scandals, and 9/
11 terror attacks--all those events that were detrimental to this 
economy of ours and yet it bounced back. The revenue outperformed 
Congressional Budget projections by a significant margin, and all one 
has to do is look at what CBO said would happen, the blue line, and 
look at the red line of what actually happened.
  People on our side, including our Presidential candidate, do not take 
this significant data lightly. We believe the bias ought to be against 
growing Government, not the other way around; another way of saying--
disabusing people who say that the way to bring more money in is to 
raise tax rates and if you lower tax rates, you bring a decline to 
revenue in the Federal Treasury. Not so. This chart shows that we can 
reduce tax rates, we can enhance the entrepreneurship of the average 
American, particularly the small businesspeople in this country who 
create at least 70 percent of the jobs that are created, and we can 
expand revenue coming into the Federal Treasury. That is what, on this 
side of the aisle, we propose to do. Are we equipped to do it? The 
history of 2001 through 2006 is enough evidence for me and most 
Americans that it can be done and that we did it.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from North 
Dakota.
  Mr. CONRAD. Mr. President, first of all, I wish to say, while I 
disagree with some of the observations of the Senator from Iowa, I have 
enormous respect for him. He has earned that respect by the way he 
conducts himself as a Senator. While we have policy disagreements, I 
have absolutely no disagreement or question about his motive because he 
has proved to me repeatedly that he is trying to do the very best for 
this country, as am I.
  I want to go back to some basic facts. We heard the Senator talk 
about a 9-percent increase in spending that is in this budget. I don't 
know how they came up with that calculation, but there is no 9 percent 
increase in spending in this budget. If you look at the spending that 
is in this resolution over 5 years and compare it to the President's 
budget, it is 2.1 percent more. That is total spending. That is over 5 
years. If we look at just the next year, 2009, the Bush budget calls 
for $3.04 trillion of spending. We call for $3.08 trillion. That is a 
difference of 1 percent. That is total spending.
  I think what the Senator's staff has done is to look at one small 
part of Federal spending, just nondefense domestic discretionary 
spending, which is about one-sixth or one-seventh of the budget. But if 
we look at total spending, there is a 1-percent difference total 
spending for 2009. OK? The difference between our President's budget 
and our budget is 1 percent--1 percent. That is a fact.
  On the comparison of revenues, the President's revenue line we see is 
the red line, ours is the green line. What is the difference? The 
difference is over 5 years, the President calls for $15.2 trillion of 
revenue; we call for $15.4 trillion. That is a difference of 2.6 
percent.
  I believe this revenue can be achieved without any tax increase. I 
believe that. Why do I believe that? Because of the three things I 
mentioned before. The tax gap--the Senator put up a chart that shows 
what the tax gap was in 2001. The net tax gap in 2001 was $290 billion.
  The Senator correctly says very little has been done in the last year 
to do anything about it. In fact, very little has been done over the 
last 10 years to do anything about it. My belief is the tax gap has 
done nothing but grow from 2001. So it is not $290 billion a year 
anymore. I believe over 5 years the tax gap is probably in the range of 
$2 trillion. I say this as a former tax administrator of my State, a 
former chairman of the Multistate Tax Commission. I believe the tax gap 
over 5 years is likely to be $2 trillion. But it doesn't stop there.
  I put up what the Permanent Subcommittee on Investigations says is 
the loss to the tax havens. They say $100 billion a year without any 
growth over 5 years, that would be $500 billion. So with the tax gap 
and the tax havens, that is $2.5 trillion over 5 years. Then abusive 
tax shelters over the 5 years, I believe, based on the Permanent 
Subcommittee on Investigations' work, is another $200 billion. That is 
a total of $2.7 trillion of leakage over 5 years in the revenue 
system--$2.7 trillion. If we got 15 percent of it, 1-5--15 percent of 
it, $1 in every $7 in the tax gap, the tax havens, the abusive tax 
shelters, $1 in every $7--we can't do that? If we can't do that, then 
the Revenue Commissioner ought to be replaced and all the rest of us 
ought to be replaced if we have designed a tax system that has that 
much leakage in it, in which the vast majority of us pay what we owe 
but we are letting a bunch of scoundrels escape? Shame on us. That is 
exactly what our own Permanent Subcommittee on Investigations has told 
us.
  All this talk about, well, we are going to have a trillion dollars of 
tax increases--let's look at the record. Let's go to the record. What 
has this Congress, controlled by Democrats, done? It has cut taxes $194 
billion so far, with $7 billion of revenue raisers and loophole closers 
enacted for that period.
  I say to my colleagues, these are just the facts. What is most of 
this? Most of this is the stimulus package we just passed. Most of it 
was bipartisan. The reference was to Democratic control of the House 
and the Senate, $194 billion of tax cuts and $7 billion of revenue 
raisers. That has been the record of this Democratic Congress: $194 
billion of tax cuts and $7 billion of revenue raisers. That is not a 
projection, that is not sitting around conjuring up how we can make the 
other side look as bad as we can make it, that is a fact of what has 
been done.
  The other side talks about the miracle of the tax cuts producing more 
revenue. We don't need to look at a projection there either. Let's just 
look at the record.
  In 2000, the tax base of the United States was $2.03 trillion. Now, 
adjusted for inflation, it is $2.05 trillion. The revenue base of the 
country has basically been static for 8 years. The spending, most of it 
controlled by our colleagues on the other side because they were in 
charge until last year, has gone up 50 percent. Again, we don't have to 
look at some projection or some guess or some economists' estimates. 
Let's just look at what happened on the

[[Page 3586]]

record: revenue flat, spending up substantially when our colleagues 
controlled everything, the House, the Senate, the White House. What 
happened to the debt? The debt exploded. This is not a projection, this 
is not guessing ahead, this is what is happening. And my friends across 
the aisle controlled everything--they controlled the Senate, they 
controlled the House, they controlled the White House--and here is 
their record. The debt exploded, not some projection, not some 
guesstimate of the future. That is what has happened. The revenue was 
flat, the spending went up dramatically, went up about 50 percent, and 
the debt exploded as a result. That is not a projection, that is not a 
claim, that is a fact.
  I yield the floor.
  Mr. GRASSLEY. Mr. President, I would like to respond to the 
distinguished chairman. The Senator from North Dakota disputed the 9 
percent increase I cited with respect to the discretionary spending.
  Here's how the Republican staff of the Senate Budget Committee 
reached that figure:
  1. Take the increase in the President's budget--6.5 percent over last 
year.
  2. Add the amount of $22 billion the budget assumes over that 
request.
  3. These additions in discretionary are not offset.
  4. Add the two together and you arrive at a 9 percent increase in 
discretionary.
  5. I said a 9 percent increase in discretionary and I reconfirmed the 
figure with our Budget Committee staff.
  As to the tax gap figure of $290 billion, I say to the chairman, that 
is the figure that is derived from career statisticians at the IRS 
statistics of income--``SOI''--Division. I will reiterate that these 
statisticians have cautioned us to not treat that figure like a revenue 
estimate.
  I reiterate my recognition of the tax gap problem. I am pleased that 
Chairman Baucus has made this a top priority. I have been his teammate 
in that regard and will continue to be. All I would say is be careful 
about realism about the revenue we can raise and its timeframe. My 
inverted pyramid chart is a yardstick of that realism.
  We should close the gap, but the revenue raised is what it is.
  I am pleased that the distinguished chairman agreed that 15 percent 
is the knowable tax gap-related offsets in terms of scored proposals. I 
would caution everyone that the $44 billion annualized figures is the 
celing on the tax-gap related offsets. I will discuss this data in more 
detail as the debate proceeds.
  The distinguished chairman's final point was that revenues have been 
flat since 2001. In fact, 2000 was an anomaly. The stock market had not 
burst and the chairman knows capital gains and other nonwithheld 
revenue pushed that number up.
  We had a triple whammy hit to the economy in the next year, 2001. The 
stock market bubble burst, the corporate scandals rocked Wall Street 
and whacked main street businesses, and the terrorist attacks occurred.
  Because the economny was rocked, revenues dropped for 2001 and 2002. 
Revenues steadily came back after the economic growth plan of 2003 was 
put in place. Any review of the revenue baseline data would confirm 
what I have said.
  I yield the floor.
  Mr. CONRAD. Mr. President, Senator Akaka is here. He would like to 
speak on the budget. I will give him time off the resolution. How much 
time does the Senator wish?
  Mr. AKAKA. Four minutes.
  Mr. CONRAD. I provide 5 minutes off the resolution to the Senator 
from Hawaii, Mr. Akaka.
  The PRESIDING OFFICER. The Senator from Hawaii is recognized.
  Mr. AKAKA. Mr. President, I rise to commend Budget Committee chairman 
Kent Conrad for his fine work on this budget resolution. It will lower 
our taxes and create hundreds of thousands of new jobs for Americans. 
In addition, I am very pleased this budget resolution honors our 
Nation's veterans by providing the necessary funds for our wounded 
warriors. Funding for our veterans is very important, and I wish to 
speak about this again at a later time.
  The resolution passed by the Budget Committee last Thursday will 
balance our Federal budget by 2012 and fund programs that are critical 
to the health and safety of Americans. It provides tax relief to 
middle-income Americans, honors our fighting men and women in the Armed 
Forces, shows respect for our wounded and disabled veterans, and 
ensures the continued safety and security of our Nation.
  By focusing on the real needs of Americans and reviving our slowing 
economy, the budget resolution seeks to restore balance--balance to our 
finances and balance to our priorities for America. The budget 
resolution increases funding for veterans health care and children's 
health care. It provides a substantial increase above the President's 
budget for education and Head Start. It promotes greater efficiency and 
renewable energy programs. It extends middle-class tax cuts, such as 
marriage penalty relief and the child tax credit, and it brings more 
middle-class Americans into a 10-percent tax bracket. The budget 
resolution also invests in building and repairing roads, bridges, 
harbors, airports, and schools because we recognize our economic 
success depends on public infrastructure investment.
  As Chairman Conrad has noted, this budget is only a first step, but 
it is an important step to reach our goal of long-term fiscal security. 
I am prepared to join Chairman Conrad in this important mission to 
balance our budget, restore our military readiness, honor our 
commitment to troops and veterans, and enhance our national security.
  I urge my colleagues to do the same. It is time that we provide a 
real future for our children and our country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the Senator from Hawaii for his 
kind remarks. I also thank him for the enormous contribution he made to 
the work of the Budget Committee, especially with respect to funding 
for veterans affairs, and specifically veterans health care. One of the 
things I am most proud about in this budget is we are showing a $3.2 
billion increase over what the President requested for veterans health 
care because I think the vast majority of us recognize the 
extraordinary ongoing need for improvements to veterans health care. 
Our veterans have made an enormous commitment to this country, and we 
must keep our commitment to them.
  Last year, as the Chair will recall, the budget contained the largest 
increase for veterans health care in our history. This year we have 
another significant increase that largely parallels the budget proposed 
by the veterans organizations themselves in recognition of the 
extraordinary need that exists.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. GRASSLEY. I yield whatever time Senator Alexander might consume.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. ALEXANDER. Will the Chair please let me know when I have 
completed 15 minutes?
  The PRESIDING OFFICER. The Chair will so advise the Senator.
  Mr. ALEXANDER. Mr. President, I first commend the Senators from North 
Dakota and Iowa for the way they conduct this debate. This is always a 
model for how the Senate ought to work. Sometimes toward the end of the 
debate it is not but at least at the beginning it is. What we are 
supposed to do is act like grownups, deal with big issues, base our 
arguments on principle, and come to results. We often are able to do 
that, and these two Senators are among the leaders in helping to make 
that happen.
  This is a week during which we talk about the Federal budget. I want 
to talk more about the family budget because what we do with the 
Federal budget makes a big difference to the family budget.
  We know this week in homes in Tennessee, Iowa, and across America 
people are talking about their family

[[Page 3587]]

budgets. They're worried about whether there will be enough money at 
the end of the month to pay the taxes that will be due in April and 
about whether there will be enough money to pay gasoline costs that are 
$3.50 a gallon or higher in some parts of the country. They are worried 
about whether there will be enough money to afford a reasonable health 
insurance plan and whether the homes so many Americans have been able 
to buy will maintain their value. They are worried about whether we are 
going to be able to keep our advantage and brainpower here in America 
so we can keep our jobs from going overseas. They are worried about 
whether our schools are going to be good enough to help our children 
have good jobs. Those working in small businesses are worried about the 
cost of runaway lawsuits. Women who are pregnant in rural areas are 
worried about having to drive 60 or 80 miles to a doctor because the 
high cost of medical malpractice insurance has run the OB/GYN doctors 
out of the rural areas. Women must go to the big cities and they have 
to drive long distances to have their babies.
  Those who work with the capital markets--and there are tens of 
millions of Americans who do--want to revive those capital markets. 
Those who are sitting in traffic jams want us to meet our obligations 
to build roads, bridges, railroads, and airports. We want simpler 
taxes. We would like to have less Government. All of these ideas would 
affect the family budget. We must maintain a good balance in 
management-labor relations, for example, by not getting rid of the 
secret ballot in labor relations or keeping the right-to-work law. 
Those are all important issues. I saw in my State of Tennessee that 
having a right-to-work law helped to attract the auto industry. Now, a 
third of our manufacturing jobs are auto jobs and our family incomes 
have gone up.
  So let me talk for just a moment about what Republicans want to do to 
help balance the Federal budget.
  So the question is whether we will adopt the Democratic budget which, 
according to evidence presented by the Republican leaders of the Budget 
and Finance Committees, would raise taxes, raise spending, raise debt, 
and wreck the Federal budget or whether we will adopt the Republican 
pro-growth plan which keeps taxes low, which lowers energy costs, which 
helps make it possible for every American family to have health 
insurance without the government choosing the doctor.
  I wish to talk about the other picture that taking the Republican 
pro-growth plan to help balance the family budget instead of the 
Democratic budget for more taxes, more spending, and more debt.
  Traditionally, this budget week when we talk about the Federal budget 
is usually a week in which we are so awash in a blizzard of charts and 
speeches, abstractions, and competing statistics that it is very 
difficult to make much sense out of the whole discussion. What I am 
suggesting is not very hard to make such sense out of--it is a debate 
we hear quite a bit.
  In December, when we debated the Energy bill, we on this side were 
willing to join with many Democrats and pass a fuel efficiency 
standard. This is one of the best things this Congress has done to 
reduce our dependence on foreign oil, thereby reducing our use of oil 
and helping to stabilize the price of gasoline. But, first, we had to 
stop an effort from the other side to add $20 billion in taxes.
  Earlier this year, most of us on this side joined with most on the 
other side to pass an economic stimulus plan. But, first, we had to 
reject $40 billion in more spending that the other side wanted to add 
to the proposal.
  My point is that more spending is not a new argument and that the 
other side would propose more spending, more taxes, and more debt, and 
this side of the aisle would say, let's have less of that. There is 
another part to the story on the Republican side of the aisle and 
exactly what we would do to help balance the family budget.
  Over this week, we will be hearing proposals to lower or to keep 
taxes low. There are a variety of proposals to do that. One would be to 
lower corporate tax rates from 35 to 25 percent. That would help keep 
jobs in America. That helps the family budget. One would be to index 
capital gains for inflation. That would help keep jobs in America. That 
helps the family budget. I would like to see us make permanent the 
expensing provisions that we passed in the stimulus package. That would 
help keep small businesses healthy in this country and create new jobs. 
Those incomes would increase family incomes, and that would help the 
family budget.
  We would like to lower energy costs as well and bring some common 
sense to the discussion about energy. That would mean, from our point 
of view, more nuclear power because that is the cleanest power. If we 
are really serious about climate change in this generation and about 
cleaning up the sulfur and the nitrogen and the mercury, we need to 
remember 66 percent of all the clean energy we produce in America is 
produced by nuclear power. Instead of wasting dollars by spending, for 
example, $11 billion to subsidize more large wind turbines, we could 
spend the money to encourage the building of nuclear power. We could 
encourage reprocessing of nuclear waste which would reduce by 95 
percent the amount of that waste and storing it, thus making it easier 
for nuclear power.
  More oil would increase the supply of oil and reduce the price of 
oil. Simple economics tells us that. Most of us on this side of the 
aisle are ready to give States the option to drill for oil and gas off 
the coast of America. You can do that at a distance. It can't be seen 
and it can be done safely. Then a significant amount of the royalties 
from the revenue from that can be taken into the State, put in a trust 
fund, which could either lower taxes or protect the coastal areas or 
could be spent to improve the higher education system.
  The State of Virginia has said it wants to do this. Most of us on 
this side of the aisle, the Republican side of the aisle, say, why not? 
And why not take some of the royalties as well and devote them to 
conservation purposes, as Senator Domenici and Senator Salazar on the 
Democratic side of the aisle led us to do in the 2005 Energy bill.
  I would like to see us take some of the money that we are spending 
and use it to give incentives to utilities to increase incentives for 
using electricity in the off-peak hours. To put that in plain English, 
the Tennessee Valley Authority uses about 27,000 megawatts of 
electricity on any given day, a typical day, on the average. But at 
night, it has 7,000 or 8,000 megawatts it doesn't use. So if we had 
ways to plug in hybrid cars at night, we wouldn't have to spend money 
for new plants and could lower the cost of electricity, improve the 
quality of the air, and deal with climate change at the same time.
  That is all part of the Republican plan. Not just Republican ideas, 
but the Republican plan, which we hope is so compelling that it 
attracts Democratic support to help balance the family budget.
  On the Republican side of the aisle, we want to make sure every 
American has health insurance without the Government choosing the 
doctor. We have a variety of proposals for doing this. We want to 
integrate the idea of every American having access to health insurance 
with two words: private sector. We believe we can do that, and do that 
in a way that lowers the cost of health care and makes a basic health 
care plan available to every American.
  One way, of course, to lower the costs of health care would be, as I 
mentioned a little earlier, to stop runaway lawsuits that are driving 
up the costs of medical malpractice lawsuits and causing OB/GYN doctors 
to leave rural areas. We have pregnant women in Tennessee who drive 60 
or 80 miles to Memphis for their prenatal health care or to have their 
babies because the OB/GYN doctors' health care costs--their medical 
malpractice costs--are so high because of unnecessary lawsuits that 
they have left town and gone to some other place.
  We could enact a small business health insurance plan, which has 
significant support on both sides of the

[[Page 3588]]

aisle, but we haven't been able to get it through the Congress yet. It 
would help an estimated 1 million more Americans to have health 
insurance at a lower cost.
  These are some of the ideas we on this side of the aisle believe 
would make a difference in helping the family budget. Most Americans 
are concerned today about the values of their homes. There are a number 
of proposals that would simply add billions of dollars in spending as a 
way of approaching the housing slowdown. However, we would like to see 
proposals like that of Senator Isakson of Georgia that would adopt an 
idea--similar to what the government had in the 1970s--to give a $5,000 
tax credit to home buyers who buy newly constructed or homes that are 
being foreclosed. This would bring back into the marketplace those who 
would buy foreclosed homes or new homes. Another idea, which I believe 
there is substantial agreement with on both sides of the aisle, is to 
increase the amount of money that would be available to State housing 
agencies to help refinance subprime mortgages or mortgages that are now 
headed to foreclosure or in foreclosure.
  In terms of education, I know for a fact if you want a stronger 
economy and higher family incomes, you have to have a focus on 
education. Better schools, better colleges, and better universities 
mean better jobs. And that doesn't always mean more spending. For 
example, giving parents more choices of schools, particularly low-
income parents, with the idea of a Pell grant for kids would be one way 
of helping hard-working American families make sure their children have 
a chance to attend a good school.
  Another way to make sure there are good schools is to pay outstanding 
teachers more money for teaching well. This weekend, there was a story 
in the New York Times about a charter school in New York City where 
teachers are being paid $125,000 a year. And the manager of the school 
said: I would rather have a classroom with 30 kids and the very best 
teacher, rather than a classroom with 20 students and an average 
teacher.
  I agree with that, Mr. President. So let's double the amount of money 
we would spend for the teachers' incentive fund, enacted in No Child 
Left Behind, which would give to State and local governments funds to 
experiment with programs that reward outstanding teaching and 
outstanding school leadership by paying those individuals more.
  We have strong agreement about the America COMPETES Act. We 
understand that since World War II America's technological advances 
have been the source of its growth. Using some of the funding we have 
in this budget to have a sufficient amount of funding to give 1\1/2\ 
million low-income children an opportunity to take advanced placement 
tests, to hire math and science teachers according to the America 
COMPETES Act, and to put us on a path of double funding for the 
physical sciences are things that would be part of a Republican pro-
growth plan to help balance the family budget.
  As we begin this debate on the budget, what we are likely to see are 
two very different visions of America's future.
  The PRESIDING OFFICER (Ms. Stabenow). The Senator has used 15 
minutes.
  Mr. ALEXANDER. Madam President, I ask unanimous consent for 4 more 
minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. So again, the question is whether we will adopt the 
Democratic budget which would raise taxes, raise spending, raise debt, 
and wreck the Federal budget or whether we will adopt the Republican 
pro-growth plan. Will we make room for the Republican pro-growth plan 
which would begin to keep taxes low, which would begin to lower energy 
costs, which would help make it possible for every American family to 
have health insurance without the Government choosing the doctor, which 
would stimulate home buying, which would make more room for science, 
which would adjust our spending so we are able to reward outstanding 
teachers and give parents more choices of good schools. This is a 
different picture of how we can move ahead in this country.
  We hear a lot of talk about change. A real change would be to stop 
more taxes. Stop excessive spending. Stop more debt. And focus more 
attention on the family budget. Have a Federal budget that emphasizes 
lower taxes, lower energy costs, lower health insurance costs, 
stimulating home buying, more for science and more for better schools. 
That's really the way to create better jobs.
  I thank the Chair, and I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. Madam President, Senator Menendez, who is a very valuable 
member of the Budget Committee, as is the occupant of the Chair, is 
here and is available for his opening remarks.
  How much time would the Senator desire?
  Mr. MENENDEZ. If the Chair could, I think about 20, 25 minutes.
  Mr. CONRAD. I yield such time as the Senator may consume.
  Again, I thank the Senator from New Jersey, who is truly an 
outstanding member of the Budget Committee. He has made an incredibly 
valuable contribution there, and I very much appreciate the leadership 
he has brought to the committee.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. I thank the distinguished chairman for his kind words. 
I particularly thank him for his leadership in structuring a budget 
that I am convinced, unlike the President's budget, speaks to the 
shared values of the American people, speaks to the priorities that our 
Nation needs to pursue, meets the challenges our country has, and 
ultimately goes to the very heart of turning this economy in a much 
different direction so that it can work for working families.
  Under his leadership, we have a budget that I am proud to support on 
the floor of the Senate. And whether you live in the East or West or 
North or South, I think Americans will find this budget, as they become 
more fully aware of it, is one that has the integrity, the honesty, as 
well as the purposes to meet the challenges. The chairman deserves 
enormous credit for working with all Members on both sides to try to 
achieve those goals, and I appreciate his leadership.
  Madam President, this week in the Senate, we are fighting for the 
economic future of America. This is the week that we put together on 
the floor of the Senate the Federal Government's budget. And that 
budget is more than just a balance sheet of revenues and expenditures, 
it is a balance sheet of priorities and values. The lines of numbers 
come together to form a bigger picture, laying out a vision of where we 
plan to lead the Nation.
  Every year, when we make the budget, we look at where our country 
stands, at how we can improve the lives of the American people, and 
what we can do to make sound investments that brighten the future of 
generations to come.
  It is a responsibility that we cannot afford to take lightly. When we 
create a budget, we have to answer some fundamental questions: What are 
the most important problems we face as a nation? What are the 
challenges of middle-class working families? How do we meet those 
challenges?
  Several weeks ago, President Bush gave us his answer. And his answer 
was, there is nothing wrong with America that cannot be fixed by giving 
away more tax breaks to the wealthy, giving away more subsidies to big 
oil companies, continuing the war in Iraq, and never admitting what it 
costs.
  The President is fighting to keep taxes low for the wealthy and wants 
to make it up by charging veterans more for their health care. 
Apparently, that is the answer some of my colleagues on the other side 
of the aisle are giving as well. They agree with the President the 
American people should cover their eyes, pretend their problems do not 
exist, that everything magically will work itself out.
  I believe a vote for the President's budget is a vote for the status 
quo. It is a vote for the way things are going in America in terms of 
this economy.

[[Page 3589]]

  The Democrats see things quite differently. Here is what we see: Our 
economy is continuously weakening, and tens of thousands of people are 
losing their jobs. The price we pay for health care is spiking through 
the roof, while the value of our homes is falling through the floor. 
Baby boomers worry about whether they are going to be able to retire 
with dignity, and senior Americans are worried that the strong base of 
Social Security could crumble right under them. Our climate is in 
crisis, and our attachment to an umbilical cord of foreign oil means 
our entire way of life hangs by a liquid thread.
  The Government is going into debt to the tune of more than $10 
billion per month to finance a war in Iraq that has not made any of us 
safer, while local police and fire departments are getting squeezed for 
funds, and crime in our neighborhoods is on the rise.
  If you have worked in Newark all your life and just lost your job, we 
hear you. If you are scared to walk through your neighborhood in Camden 
because there is violence on the streets, we hear you. If your family 
may be in danger of losing your home in Trenton or Long Branch or North 
Arlington; if you are teaching at a school with a budget stretched as 
far as it can go in Hamilton, Plainfield, or Asbury Park; if your 
commute to work just keeps getting more frustrating in Cherry Hill; if 
every day you drive by a barren industrial site that is not being 
redeveloped in Penns Grove or Paulsboro; if it is a struggle to pay 
your college tuition in New Brunswick or pay your heating bill in Toms 
River or pay your health care costs in Edison, Democrats understand 
what people--certainly I do--all across America are going through.
  None of us can stand and pretend one budget can be the magic bullet 
that makes all of these problems disappear. One year is not enough time 
for that. One year cannot undo 7 years of the Bush administration's 
mismanagement that turned a record surplus into a soaring deficit. And 
1 year cannot undo 5 years of a war in Iraq that has claimed thousands 
of American lives and incinerated more than a half trillion dollars 
that we could have used to make American lives better.
  In one budget we cannot fully fund all of the programs that deserve 
our support or give the tax relief we want to middle-class working 
families, not under this administration. But this year, we can set the 
wheels in motion of the long and indispensable process of change. We 
can develop a plan to meet the challenges we face head on, and we can 
start to move our country forward.
  This is exactly what the Senate Democratic budget does. Here is the 
vision our budget puts forth for our Nation, a nation that is more 
prosperous, with more affordable health care, on the path to energy 
independence, a nation of safer neighborhoods, better schools, a nation 
of which we can all be proud.
  Above all, our budget is designed to get our economy growing, get our 
economy growing and moving again. That is the first and foremost 
priority of this budget. The Bush budget, supported by many of our 
Republican colleagues, creates jobs in China, while the Democratic 
budget creates good-paying jobs in America. The Democratic budget 
focuses on rebuilding our infrastructure, expanding incentives for 
green initiatives and industries, and investing in math, science, and 
engineering and technology so American businesses can create and keep 
the best jobs here in America.
  Our budget puts the family budget first. It provides middle-class tax 
relief by extending the marriage penalty relief, a child tax credit, a 
patch for the alternative minimum tax that will protect millions of 
middle-class families from paying higher taxes next year; it works to 
make college more affordable by extending a tuition tax credit; and it 
supports job training programs that will prepare the workforce for the 
21st century.
  This budget moves us down the road to energy independence. It helps 
create a highly skilled workforce and green-collar jobs. I am proud of 
the push for funding for energy efficiency and conservation block 
grants, a provision I authored in our last Energy bill to provide 
cities with support for projects that foster more efficient use of 
energy and reduce greenhouse gas emissions.
  We all know oil and natural gas prices are sky high, the sea levels 
are rising, along with the temperature. So this program is a key part 
of our strategy to meet those challenges.
  The Democratic budget recognizes we cannot think about national 
security without thinking about hometown security. While our resources 
are being drained day after day on the streets of Baghdad and Mosul, we 
are struggling to protect high-risk targets on the streets of our own 
neighborhoods.
  We know our police departments are just a phone call away during an 
emergency. Our brave men and women in law enforcement have dedicated 
themselves to serving and protecting our communities. So it is 
unbelievable to me that the Bush administration has reduced or 
eliminated nearly every major anticrime program over the course of the 
last 7 years, especially since crime and violence have been on the rise 
in the country, according to the FBI reports.
  Crime is going up, violent crime is going up, and the Bush 
administration's cuts to the most essential public safety programs, the 
very essence of homeland security, go down. What should be going up is 
going down. What should be going down is going up. How can we expect 
law enforcement to carry out their responsibilities and respond in a 
moment's notice when the Federal Government is backing out of its 
responsibility to support law enforcement?
  People in my home State of New Jersey remember on September 11 that 
it was not the Federal Government that provided the immediate response, 
it was the local police, the firefighters and emergency management and 
medical units from our hometowns. Yet in the years after September 11, 
the administration has left our local communities to shoulder far too 
much of the financial burden. Our budget, however, will ensure that 
first responders across the Nation will get the resources they need.
  I was proud to work with Chairman Conrad to ensure that homeland 
security grants that our communities rely on most were protected in 
this budget. The Democratic budget restores more than $2 billion in 
misguided cuts the President made to State homeland security grants, to 
port security, interoperable communications, rail and transit security.
  Our budget will ensure that States facing threats from high-risk 
targets or densely populated areas, communities that are near ports, 
chemical plants, airports, cities with mass transit or rail systems, 
will not be shortchanged. By restoring more than $750 million in grants 
to firefighters, we will also ensure that our fire departments can buy 
new equipment or ensure that our fire stations are fully staffed. 
Unlike the President, we will keep our commitment to fulfilling the 
recommendations of the 9/11 Commission, and we will keep our commitment 
to our first responders.
  We more than double the funding for the Byrne/JAG Program that many 
local law enforcement officials across the country consider the most 
successful crime prevention program in recent history. I am proud to 
have introduced the amendment that was passed unanimously in the Budget 
Committee setting aside a minimum of $520 million to fund it. I am 
going to ensure that we continue to support this vital program.
  We have also included language to help the FBI cut down its massive 
backlog in evaluating immigration applications for those who follow our 
rules to legally enter the country. Cutting down this backlog is 
essential if the FBI is going to be able to quickly separate those who 
have come to pursue the American dream versus those who may have come 
to destroy it.
  Our budget puts a priority on making health care more affordable and 
more accessible to all Americans. We have worked to create a reserve 
fund to block President Bush's unilateral changes to Medicaid that 
would severely reduce Federal health care funds to States for low-
income families. This

[[Page 3590]]

was the very essence of the social safety net that we as a society 
should be judged by.
  The reserve fund would also help protect New Jersey's FamilyCare 
Program from the President's Draconian cuts to children's health 
coverage scheduled for this summer. We have included support for other 
legislation, and this budget includes funding for the Patient Navigator 
Program, which I worked hard to have passed into law. If patients are 
having trouble figuring out the complicated health care system we are 
in, but they do not know how to get early screening or do not know 
about options for follow-up treatment, patient navigators make sure 
someone is there to help them.
  Our budget also keeps our commitment to our schools, our teachers, 
and our students. I am proud that our budget provides the largest 
increase for elementary and secondary education in 6 years. Instead of 
taking money away from our schools while asking them to do more, our 
budget will fund programs that provide enrichment and opportunity to 
our students.
  We do not just say education is a priority, we put our money where 
our values are by providing $3 billion more than the President for No 
Child Left Behind, and $8.8 billion more than the President for 
education and training overall.
  We soundly reject the President's proposal to freeze education 
funding and eliminate 48 programs in the Department of Education, 
including education technology, mentoring, reading programs, and 
vocational education. Instead of pretending our young people are not 
facing severe hardships when it comes to paying for college, our budget 
makes the needed investments in grants and scholarships for college and 
allows for an increase in the Pell grant maximum next year. That is the 
support our young people deserve, and under this budget that is the 
support they are going to get.
  I have often said, as someone who grew up poor in a tenement in Union 
City, NJ, the first one in my family to go to college, that would never 
have happened but for the power of the Federal Government being able to 
provide me grants and loans. That power gave me the educational 
opportunity and foundation that allowed me to be the junior Senator 
from New Jersey. The reality is, that should be a birthright for every 
young person in our country who is willing to work hard and give 
something back to their Nation.
  This budget meets that battle. Let me close by saying our debate over 
the budget is a debate over the direction of the economy, the 
fulfillment of our shared values, and the direction of our country. The 
President and those who support him are offering the same old ideas 
that got us into this mess in the first place, ideas that have weakened 
the economy and hurt the middle class.
  If you ask for more of the same, it seems to me, you get more of the 
same. Those who are happy with the economy that we are in would be 
happy with the President's budget. Those who are languishing, and that 
is the overwhelming majority of American families in this country, 
under the President's economic policies, the reality is they want to 
see change. That change is represented in the Democratic budget.
  Democrats have a fiscally responsible plan to get our economy moving 
again and strengthen our national security. The budget we are putting 
forth cuts taxes for the middle class, creates a half million new jobs 
in America, and we do all of this while working toward the balanced 
budget and paying down debt.
  It is a plan that puts forth a basic idea about what America should 
be. This should be a country where anyone willing to work hard can get 
an education and a job, a country where everyone has access to services 
that can keep them healthy, a country where a lifetime of hard work 
guarantees the right to retire with dignity, a country that knows its 
past and cares about its future.
  Let's invest in that future. Let's pass this budget. Let's begin the 
hard work of making that vision a reality and changing economic 
circumstances for families. That is what this debate is all about. That 
is what the Democratic budget is all about. That is why I am proud to 
have voted for it in committee, proud to stand on the floor to defend 
it, and proud to support Senator Conrad in his efforts in that regard.
  I yield the floor.
  The PRESIDING OFFICER. The distinguished Senator from Arizona.
  Mr. KYL. Madam President, I note that my friend and colleague, the 
chairman of the Budget Committee, is here. I thought I would begin by 
quoting something he said which I think sets the tone for the 
discussion of the budget. I believe it was during a March 4, 2007, 
interview on ``60 Minutes'' when the distinguished chairman said:

       I believe, first of all, that we need more revenue.

  Now I won't pretend that I know the exact context in which this 
statement was made, but it is not the first time I have heard 
Democratic colleagues say we need more revenue. In one of our informal 
meetings, colleagues said: We will need a much bigger revenue stream 
when the next President is elected. That individual was presuming it 
would be a Democratic President.
  Mr. SANDERS. Will the Senator yield?
  Mr. KYL. Yes, of course.
  Mr. SANDERS. Let me say, very clearly, to set the record straight, as 
an Independent, we need more revenue. We have the highest rate of 
childhood poverty in the industrialized world. We have people who are 
hungry. We have mothers who can't afford childcare. Yes, sir, we need 
more revenue. We should ask the wealthiest people in this country to 
help us come up with the revenue.
  Mr. KYL. I am happy to have the Senator from Vermont confirm that on 
the other side of the aisle there is a belief that the U.S. Government 
needs more revenue.
  I would actually put it the other way around. Especially in times of 
economic difficulties--and I think we all agree that our economy is not 
in great shape right now; there is a discussion that we may even be in 
or very close to a recession--of course, the worst thing to do during 
that period is to give the Federal Government more revenue, to take 
more revenue out of the pockets of taxpayers, average Americans who 
have to pay attention to their own budgets.
  As a matter of fact, our problem is not the lack of Federal revenues. 
We are collecting more money now at the Federal Government level than 
the historic average over the last 40 years. I hardly think the Federal 
Government needs more revenue. I argue, instead, that our families need 
to keep more of the hard-earned revenue that is a result of the efforts 
of their families in working hard every day.
  It is true that because many on the Democratic side of the aisle have 
plans to spend more money, as my distinguished colleague from Vermont 
is suggesting, they therefore see a need to take money from taxpayers' 
pockets so that we in Washington, in our infinite wisdom, can make 
decisions about how that money should be spent. I think that is the 
wrong prescription virtually any time but certainly at a time when we 
may be heading into a recession.
  It at least is the case that our Democratic friends in their budget 
would raise taxes in some cases--not all but in some cases--to pay for 
this additional spending they believe should occur. As with last year's 
budget, which would have increased taxes by $900 billion, this year the 
budget would increase taxes by $1.2 trillion--the biggest tax hike in 
the history of the United States.
  Once again, there is a suggestion out there that we can soak the rich 
and nobody else will have to bear the burden. The top 1 percent would 
pay something like $25 billion in taxes; that is the amount we could 
expect from this budget in 2009. Of course, that wouldn't begin to take 
care of the spending proposals that have been added up on the other 
side of the aisle.
  Every time we try to target the rich in order to collect a lot of 
money to pay for spending in Washington, we end up hitting everybody 
else. The best example of that is the alternative minimum tax, the AMT. 
Originally, this tax was designed to ensure that millionaires would 
always pay some taxes,

[[Page 3591]]

that they could not avoid tax liability by taking advantage of 
writeoffs and deductions and credits and other provisions of the Tax 
Code that anybody is entitled to take advantage of, if those provisions 
meant that you could write off or offset your income with losses or 
deductions and therefore there is no tax liability. We said: No, that 
is not right. The AMT will come into play at that point so everybody 
has to pay some taxes. It seemed like a good idea at the time.
  What has happened in the meantime, we all know, because it has not 
been indexed for inflation, we now this year had something like 23 
million taxpayers subject to that kind of alternative minimum tax 
liability, something people on both sides of the aisle have sought to 
avoid. We don't want to tax everybody. We don't want to hit the middle 
class, let alone other taxpayers. But it is a good example of how, when 
we try to aim at the rich, we end up somehow always managing to hit the 
poor or the middle class. That is the same thing here.
  In the budget, there is a suggestion that we are only going to hit 
the rich. There are problems with that: No. 1, it is not true, as I 
will point out; secondly, you wouldn't begin to get the kind of revenue 
our colleagues say they need in order to engage in the spending 
programs the budget calls for.
  I have a couple other examples. The energy and education tax 
incentives in this budget must be paid for by other tax increases. The 
same applies to the middle-class tax relief promised and any AMT relief 
after 2008. I remember because I chaired the subcommittee of the 
Finance Committee that has jurisdiction over the IRS. I heard a lot 
about tax gap collection. So we held a hearing. We said: How much money 
could we really collect by enforcing revenue collections? Everybody 
owes these taxes. If we just collected the money, how much could we 
expect to get? The experts said: Actually, not very much. You would 
spend more than you would end up collecting in many cases because it is 
not a matter of just going out and collecting a due debt but, rather, 
forcing the kind of bookkeeping on various kinds of small businesses 
that would probably put most of them out of business if they were 
really to keep the kinds of records that would enable us to collect the 
kinds of taxes that we suggest maybe they owe. So this business of 
recouping a portion of the tax gap and using that to pay for these 
spending programs is one that does not have the support of those who 
have testified before the Finance Committee.
  The bottom line is, we are not going to be able to collect the kinds 
of revenues and the increased taxes called for here in order to pay for 
spending programs the Democrats have identified.
  Finally, there is talk about a so-called reserve fund. This is an 
interesting concept. It is sort of, well, there is going to be money 
out there because we promise we will put money in it, so we can afford 
to therefore raise spending in anticipation that we will put money in 
this reserve fund. The amount of reserve funds included in the 2008 
budget have now grown this year, representing up to $300 billion in new 
taxes and spending. As I said, that looks good on paper, but it doesn't 
come about in reality.
  I will get to a final point in a minute about collecting revenues and 
what that has to do with the death tax, but let me deal with a couple 
other items before I talk about that.
  The ranking member of the Budget Committee has noted something that 
started last year, and it certainly is included in this year's budget. 
That is the fact that budget enforcement mechanisms which were put into 
the budget last year amid great fanfare about how we are not going to 
have sham budgets; we are going to have pay-go--whenever we spend, we 
will make sure we collect it in advance--it turns out that has been 
waived more times than it has been abided by. With the budgetary 
sleights of hand that were put in place last year, we find that the 
same things roll over into the budget this year, with the result that, 
again, we have greater debt that is not really going to be paid for, 
notwithstanding what the budget seems to suggest.
  The House budget included reconciliation instructions to pay for a 1-
year extension of the AMT patch by presumably raising taxes on oil and 
gas companies, taxing private equity, and codifying the so-called 
economic substance doctrine. The Senate committee did not include 
reconciliation instructions in the Senate budget resolution, I presume 
because of the conclusion that at the end of the last year, the AMT did 
not need to be paid for.
  Obviously, there is an understanding in this caucus that those who 
oppose higher taxes on oil and gas--there are those who oppose higher 
taxes on oil and gas and oppose taxes on private equity, and it would 
be a very difficult thing to get such a bill passed in the Senate. But 
no one should be surprised that the same reconciliation instructions 
could very well magically appear in the Senate after a conference in 
order to get around Republican opposition to higher taxes. That is why 
you have heard many Republicans predict that when the conference report 
is concluded on this budget--if, indeed, a budget is passed--and it 
comes back here to the Senate, we are going to see some things that 
never would have been in the bill at this point in time and which I 
hope my colleagues would recognize and would oppose at that time.
  I said I would get to the matter of whom this budget really hurts. We 
in the past have tried to focus on the rich, and we always end up 
hurting other people. Who are some of the other folks who would suffer 
under this budget? They include families, seniors, people with low 
incomes, small businesses--in other words, just about every group in 
this country we really don't want to hit with higher taxes. But when 
the current tax rates expire at the end of 2010 and the Democratic 
budget permits the rates to go back up to where they were before, the 
so-called Bush tax cuts, we are going to see 116 million taxpayers 
start sending more of their paychecks to Washington, DC.
  The poor Federal Government needs more revenue, as my colleague said 
earlier. For the 7.8 million taxpayers taken off the rolls, if the 
current tax policies are allowed to expire, 7.8 million families who 
currently don't pay any income taxes because of the way we constructed 
the 2003 tax cuts would be put back on the rolls again. So there you 
have people in the lower income brackets--7.8 million taxpayers we took 
off the rolls--who would come back as taxpayers under the Democratic 
budget. Families, 43 million working families with children would see 
their taxes raised by an average of $2,300 in the year 2011 on average. 
Take a security guard earning $50,000, with a wife and two kids. He 
would see his taxes go up by $2,300 in 2011. Take a widowed teacher's 
aide with two kids. Her taxes will go up by $1,100 in 2011. That may 
not seem like a lot of money here in Washington, but it is a lot of 
money for a family working hard to make ends meet, worrying each month 
about where they will get the money to do all the things they need to 
do.
  We tend to think in this body and in the Congress generally not in 
terms of millions anymore or even hundreds of millions but in billions 
of dollars. In fact, trillions are starting to creep into our lexicon. 
We need to get back to focus on what families are really concerned 
about. One thousand there, $2,000 there, $4,000 there ends up being a 
lot of money to these families.
  Who else is going to get hit? Senior citizens, 18 million senior 
citizens will see their taxes rise by an average of $2,200 under this 
budget. So every Democrat who proudly casts a vote in favor of this 
budget, understand, this budget assumes that seniors will have an 
average tax increase in 2011 of $2,200. An elderly couple with $40,000 
in income, if the Democrats roll back our current tax policy, a couple 
over age 65 at $40,000 in income will see their taxes go up by $2,200 
in 2011. Eighteen million seniors will see their taxes increase if the 
current tax rates are not extended, which is not the case under the 
Democratic bill. Seniors especially benefit from reasonable capital 
gains and dividends tax rates because frequently they have small 
investments. They are part of a teacher's pension or some

[[Page 3592]]

other fund that pays them dividends. Thirty percent of taxpaying 
seniors claim capital gains. More than 50 percent of taxpaying seniors 
claim individual dividends which would, of course, increase their tax 
liability under the Democratic budget.
  We talk about small businesses. Small businesses are the engine of 
our economy. They provide more employment opportunities than all of the 
big businesses combined. Yet they pay the income tax rate at the 
highest level, which is the level of the ``rich.'' So whenever 
Democrats talk about taxing the rich, understand their shotgun also 
includes all of the small businesses because that is the rate they pay. 
So in the tax world, small businesses are the same thing as high-income 
individuals. Is that whom we want to harm, especially at a time when 
our economy, being in jeopardy as it is, has to rely upon the jobs 
created by small businesses? Seventy-five percent of all individual 
returns in the top 1 percent of income include business income. In 
fact, 83 percent of all individual returns above $1 million included 
business income. Think about that. That means that the bulk of the 
people who are reporting income in this category include business 
income.
  Small businesses pay 54 percent of all individual income taxes. This 
is one of the worst things about the Democratic budget--not just for 
the lack of equity, not just because it hurts individuals, but because 
it has a devastating impact on our economy at this critical time.
  If tax rates are allowed to rise to their pre-2001 levels, 27 million 
small businesses will see their tax bill increased by over $4,000. I 
will repeat it: 27 million small businesses will see their tax bill 
increase by over $4,000.
  I might just note parenthetically, there is a direct correlation, by 
the way, between high taxes and high unemployment. In the United 
States, we have had relatively low taxes because of the Bush tax cuts. 
We collect about 34 percent of revenues as a percent of GDP; in fact, 
34.2 percent. Our unemployment rate is 4.8 percent. In the European 
Union, the tax rates are more than 10 percent above that. They collect 
45.4 percent of revenues as a percent of their GDP, and their 
unemployment rate is almost 8 percent. It is 7.9 percent right at this 
moment. So if we want higher unemployment, then raise taxes. It is a 
pretty sure way to get there.
  Let me conclude by discussing briefly what this budget does with 
respect to the death tax because this has been a matter of particular 
concern to me. I have talked to Chairman Baucus about this matter.
  In the Finance Committee, I offered an amendment to reform the death 
tax. In exchange for my agreeing to lay the amendment aside because the 
other side did not want to vote on it, the chairman agreed to hold 
hearings with the goal of trying to report out a death tax reform 
proposal sometime this spring. He has now advised me that is not going 
to happen. We will have the hearing, but we will not have a markup to 
put out a bill. That is very disappointing. Yet the budget actually 
assumes that such a bill will pass.
  The budget, as I understand it, has a provision for an amendment of 
the death tax for so-called death tax reform. It is not very good 
reform because it would freeze the rate at 45 percent, which is a very 
high rate of taxation. It would set the exemption level at $3.5 
million, which is not bad, but it could be better.
  I have a better idea about what real reform would look like. What I 
would like to do is to set the exempted amount at $5 million per 
person, index that for inflation, and put the top death tax rate at no 
more than 35 percent. I think it ought to be closer to 25 percent, but 
in the spirit of trying to reach a compromise, I will propose we at 
least have it no higher than 35 percent. This would protect almost 
120,000 families, family businesses, and family farms from having to 
pay the death tax each and every year. And it would promote continued 
economic growth and job creation.
  It is interesting to me that the United States has the third highest 
estate tax rate in the world and is 37 percent above the international 
average. Twenty-four nations have no estate tax. There are only two 
countries that have rates higher than ours. Ours would be at 45 percent 
under the Democrat budget. In France it is only 40 percent. The average 
is about 13 percent.
  One of the reasons other countries do not have this kind of tax at 
the time of death is because of the amount of money that people will 
spend to try to avoid it. It has been estimated, as a matter of fact, 
that there is almost an equal amount of money spent each year in an 
effort to try to avoid payment of the tax as there is paying the tax 
itself. And by ``trying to avoid it,'' I mean hiring lawyers and 
accountants and buying insurance policies, all of which cost a lot of 
money. But due to some extent----
  Mr. SANDERS. Madam President, will my colleague yield?
  Mr. KYL. Let me conclude my point on this, though I do appreciate the 
intercession of my colleague earlier, acknowledging that folks on his 
side of the aisle would like to see a lot more revenue because of the 
spending they would like to accomplish.
  Let me finish this point about the death tax.
  The U.S. Treasury estimates that the estate tax reduces bequests by 
14 percent. Individuals are either choosing to save less or rely 
heavily on estate planning, which is a large deadweight loss to the 
economy. The death tax costs more money to comply with than it raises 
in revenue. As I said before, there is a direct correlation between the 
two.
  Economists Henry Aaron and Alicia Munnell estimated the amount spent 
on avoiding the death tax is approximately equal to the amount 
collected. The IRS estimates it takes about 38 hours to complete form 
706, the Federal estate tax return. Estate planning for businesses can 
range from $5,000 to $250,000 for family limited partnerships and up to 
$1 million for closely held businesses. Fifty-two percent of the 
estates that filed a return were required to incur sizable legal, 
accounting, and other professional expenses even though they owed no 
tax.
  So my point about the death tax is that almost no one thinks it is 
fair. Almost everybody acknowledges it should be reformed. We have 
tried year after year to reform it. We have not been able to get the 
necessary votes to accomplish that, though virtually every Republican 
has supported reform.
  The chairman of the Finance Committee assured us we would work toward 
the goal of getting a bill this year but now says there will not be a 
goal, and as to the ``reform'' in the budget, it turns out to be very 
little reform at all. In fact, it was the same ``reform'' we passed 
last year as part of the budget. As everybody knows, the budget is not 
law. The budget is a goal, and we did not follow up on that goal. When 
I tried to do so, I was asked to back off for a future commitment, that 
we would try to work on it this year. Now we are told we are not going 
to do it this year.
  So let's just understand that what we would be doing in passing a 
budget that theoretically has a proposal for death tax reform is not 
serious. We are not going to have death tax reform.
  For those who vote for the amendment which will be offered here to 
suggest there will be death tax reform, understand that if you do not 
follow it up with real action to pass a bill that reforms the death 
tax, then this is nothing more than an unkept promise.
  So I urge my colleagues, as they think about this, to recognize we 
will be held accountable. We now have a year of experience following 
the Democratic budget that was passed last year, and we see all of the 
unfulfilled commitments that were made in that budget now. Since the 
budget tracks so carefully this year what we did last year, one has to 
ask the same questions: Is it going to be the same this year where on 
the death tax, for example, we are not able to get relief? As I said, I 
will propose an amendment that I think takes a little bit better stab 
at death tax relief. I would hope we could get support as we have from 
some of our Democratic colleagues on that to demonstrate we want to do 
something

[[Page 3593]]

substantive this year on that subject rather than simply put it in the 
budget and claim we have done something when, in fact, everybody knows 
that just putting it in the budget does not actually change anything.
  Let me close, Madam President, by saying--I will be happy to yield, 
but I will be happy to stop and let my colleague from Vermont just go 
ahead, if he would like to do that--I want to acknowledge the hard work 
of the chairman of the Budget Committee, who is here. I know he is very 
much committed to trying his very best. But at a time when, as he 
acknowledged, many folks on his side of the aisle think the Federal 
Government needs more revenue, we are just in a debate in which we have 
to agree to disagree. He always does so in an amiable way, and I 
respect that.
  But I just believe it is the American taxpayer who deserves more 
revenue, not the U.S. Government. Therefore, reluctantly, I will be 
opposing this budget in the form it is in and hope we can make 
substantial changes to it in a true spirit of bipartisanship.
  I thank you.
  The PRESIDING OFFICER. The distinguished Senator from North Dakota.
  Mr. CONRAD. Madam President, the Senator began by quoting me about 
the need for more revenue and was kind enough to indicate he did not 
know the context of it. I just thought I would provide the context 
because this was a ``60 Minutes'' program interview, and they were 
asking me in the context of the Comptroller General of the United 
States warning the American people we are on an utterly unsustainable 
fiscal course because the debt is soaring before the baby boomers 
retire, and that we face a very serious consequence if we do not deal 
with it.
  So one question put to me was:

       Do you think taxes ought to be raised?

  Senator Conrad:

       I believe, first of all, we need more revenue.

  The next sentence, which the Senator did not provide:

       We need to be tough on spending.

  And the next sentence after that also the Senator did not provide:

       And we need to reform the entitlement programs. We need to 
     do all of it.

  Let me say, I am not alone in that view. The ranking Republican on 
the Budget Committee said this at a hearing on our long-term fiscal 
challenges. This is the Republican ranking member:

        . . . [W]e also know revenues are going to have to go up, 
     if you're going to maintain a stable economy and a productive 
     economy, because of the simple fact that you're going to have 
     this huge generation that has to be paid for.

  So the Senator's reference to my quote was in the context of dealing 
with the enormous imbalance between the revenues of this Government and 
the expenditures of this Government. My response was, yes, you are 
going to have to do something about revenue. Yes, you are going to have 
to be tough on spending, and you are going to have to reform the 
entitlement programs.
  I also said in this interview, none of which aired, that the first 
place to look for revenue is not a tax increase. The first place to 
look for revenue is to go after the tax gap, the difference between 
what is owed and what is paid, to go after these offshore tax havens 
and abusive tax shelters. That was the context within which I said it.
  Now, let me just indicate why this matters.
  Mr. KYL. Madam President, might I just ask the Senator to yield for 1 
second?
  Mr. CONRAD. Yes.
  Mr. KYL. I specifically indicated that I did not know the context.
  Mr. CONRAD. Yes.
  Mr. KYL. Because I respect the Senator so much and was sure he would 
tell us what the context was, No. 1.
  No. 2, I certainly agree with the distinguished chairman of the 
Budget Committee on both of the subsequent two comments: one, that we 
should reduce spending, and, two, that we should have entitlement 
reform.
  I would only make the point that I do not see a lot of reduced 
spending and entitlement reform in the budget, but perhaps the chairman 
could go on and discuss that as well.
  I thank the Senator for yielding.
  Mr. CONRAD. I thank the Senator for his courtesy. I would say to him, 
I do not believe entitlement reform is ever going to happen--long-term 
entitlement reform--in a 5-year budget resolution. I think the only way 
we are going to get entitlement reform is a bipartisan effort, and that 
is what Senator Gregg, the ranking Republican, and I have offered, 
which is a task force of 16 members, equally divided, Republicans and 
Democrats, to come up with a long-term plan.
  I would be very candid. I think the truth is, it is going to require 
more revenue. Again, I would say before any tax increase, the first 
place I would look are these places where people are not paying what 
they legitimately owe when the vast majority of us do.
  Now, I must say, I used to be a tax commissioner. I was the elected 
tax commissioner of my State. I was chairman for several terms of the 
Multistate Tax Commission. Senator Dorgan and I are probably the only 
ones who have audited the books and records of companies and 
individuals.
  I can tell you, there is loads of money out there. One reason I was 
elected to the U.S. Senate is I found for my State lots of money that 
was not being paid over to the State of North Dakota because people 
were fudging. Large companies were fudging. Senator Dorgan and I in 
part made our reputations by going after them and very successfully 
collecting money from taxpayers who were not paying what they 
legitimately owed.
  I could go through chapter and verse of what I found as I examined 
the books and records of major companies. I have shown some of it on 
the floor of the Senate: a little five-story building in the Cayman 
Islands that claims it is the home of 12,600 companies. Now, they are 
not doing business out of that little building in the Cayman Islands. 
They are doing monkey business. They are avoiding their taxes.
  I showed earlier another building in the Cayman Islands: a five-story 
building we now know is being used by one company alone to dodge 
hundreds of millions of taxes they owe to the United States. That is 
not right.
  I would also say with respect to the tax cuts that have been promoted 
by this administration, overwhelmingly they have gone to the wealthiest 
among us. Here, in 2007, those earning over $1 million a year on 
average got a tax break of almost $120,000 a year. I do not think that 
is right. I have wealthy friends, as I think probably all of us in this 
Chamber do, who have said to me: I don't need it. I don't need that 
$120,000 tax cut. I am much more worried about the debt that is being 
sent to our kids.
  The PRESIDING OFFICER (Mr. Conrad). The Senator from Vermont.
  Mr. SANDERS. Mr. President, the Senator from Arizona has just left 
the floor, unfortunately. But I did want to make two points. He has 
referred to something called the death tax, which is what we call the 
estate tax, which was developed by President Teddy Roosevelt way back 
when. What he forgot to mention is that this estate tax--and as I 
understand it, the Senator from Arizona, if he had all of his wish 
fulfilled would repeal the estate tax completely--benefits only the 
wealthiest three-tenths of 1 percent of the population.
  So for all of the concerns about the onerous impact of the estate 
tax, it benefits three-tenths of 1 percent. Mr. President, 99.7 percent 
of the families will not benefit at all from the repeal of the estate 
tax.
  The second point is, if the estate tax were completely repealed, the 
estimate is over a 20-year period it would add about $1 trillion to our 
debt--$1 trillion--which, like the war in Iraq, is simply not paid for.
  So when people talk about fiscal responsibility, I find it a little 
bit hard to understand how they could dump another $1 trillion into our 
national debt, which benefits only the top three-tenths of 1 percent of 
the population, which means it will be the middle class and working 
families who are obliged to have to pay that off over many years. 
Sometimes when our friends on

[[Page 3594]]

the Republican side talk about fiscal responsibility, I am not quite 
sure where they are coming from.
  I thank the Presiding Officer, by the way, for sitting in for me, and 
as soon as I finish, I will take the chair.
  However, I wish to say a budget--and the budget we are debating right 
now on the floor of the Senate--is not just numbers. A budget is about 
the values of our country and the priorities of our country. Within 
that context, it is important to understand what, in fact, is going on 
in America right now.
  The simple reality is, the middle class is collapsing. Everybody who 
gets into their car in the morning and pays $3.20 for a gallon of gas, 
then goes to work and finds that they are paying a lot more for their 
health insurance than they used to, understands they don't have a 
pension when at one time they were promised a pension, understands that 
over 8 million Americans since Bush has been President have lost their 
health insurance.
  The middle class is in collapse. Wages are going down for tens of 
millions of Americans.
  During the Bush administration, private sector job growth has 
averaged less than 50,000 per month compared with over 220,000 under 
the Clinton administration. Since President Bush has been in office, 
from 2001, nearly 5 million more Americans have slipped into poverty. 
Median household income for working-age families is down by $2,500. 
Eight and a half million Americans lost their health insurance. Three 
million lost their pensions. The annual trade deficit has more than 
doubled, and over 3 million good-paying manufacturing jobs have been 
lost. The price of gas at the pump and home heating oil has more than 
doubled, while ExxonMobile made $40 billion in profits last year--more 
than any company in the history of the world. The personal savings rate 
recently dipped below zero--something that hasn't happened since the 
Great Depression. Home foreclosures, of course, are now the highest on 
record, turning the American dream of home ownership into an American 
nightmare for millions.
  The reason I raise these issues is, it is important to put the debate 
over the budget in a general context. This is not some abstraction. 
This is not some academic exercise. We are talking about the priorities 
of the American people within the context of what is really happening 
to the middle-class and working families.
  I found it interesting that my good friend from Arizona talked about 
the European Union and tried to compare the United States in terms of 
tax policy to other countries. Well, let me also compare the United 
States to some other countries.
  Today, the United States has the highest rate of childhood poverty of 
any major country on Earth. We have the highest infant mortality rate 
of any major country on Earth. We have the highest overall poverty rate 
of any major country on Earth. We have the largest gap between the rich 
and the poor, the most people behind bars, and we are the only country 
in the industrialized world not to have a national health care program.
  Now, I wonder if my friends who get up and talk about the European 
Union might on occasion mention the kind of health care systems that 
exist in every single one of those countries, which guarantees health 
care to all of their people. Try to describe the types of parental 
leave programs that exist when families have a baby. Americans could 
not understand the extent to which those countries are ahead of us in 
terms of family values.
  So while the middle class in this country declines, while poverty 
increases, while we have the highest infant mortality rate of any other 
country, while 17,000 Americans die because they don't have any health 
insurance, there is another reality in American society today, a 
reality that we should also be talking about, and that is the 
wealthiest people in this country have never had it so good since the 
1920s.
  According to Forbes magazine, the collective net worth of the 
wealthiest 400 Americans increased by $290 billion last year. Four 
hundred families, $290 billion increase last year, to $1.54 trillion. 
In addition, the top 1 percent now owns more wealth than the bottom 90 
percent.
  Sometimes my Republican friends talk about averages and so forth. 
That is not the reality. If you look at the American economy as one 
would look at a football game or a baseball game, the important 
question to ask is, who is winning and who is losing? Well, let me be 
very clear. The middle class is losing. Working families are losing. 
The people on top have never had it so good since the 1920s. They are 
winning, and they are winning big time. To ignore that reality is to 
ignore what is happening in American society.
  The question then becomes, given that reality, where do we go from 
here? What we do know is the President has given us his answer. The 
President has brought forth a budget. He has told us that in his 
budget, we don't have enough money to meet the health care needs of 
this country. So at a time when our health care system is 
disintegrating, the President has decided we cannot adequately fund the 
Children's Health Insurance Program and that we should cut Medicare and 
Medicaid by more than $600 billion over the next decade. Think about 
it. The health care system is disintegrating, more and more people 
uninsured, more and more people having higher deductibles and 
copayments. The President's response: Let's make a terrible situation 
even worse.
  The President has said in his budget that we need to reduce the 
number of children receiving childcare by 200,000 kids. Any mother, any 
parent understands that our current childcare situation in America 
today is an absolute disaster. We say to single moms, go out and work, 
but we forget to ask what are those moms supposed to do with their 2-
year-olds or their 3-year-olds? Should we leave them home alone in the 
apartment or should we provide quality childcare for them?
  Well, in Vermont and all over this country, it is increasingly 
difficult for families to secure quality, affordable childcare, and the 
President's brilliant response is, let's cut the number of children 
receiving childcare assistance by 200,000.
  My friend from Arizona said: Are there some people who want to spend 
more money? And I said: Yes, I do. I do not want the children in this 
country to have the dubious distinction of having the highest rate of 
poverty of any major country on Earth, and I would hope that every 
Member of the Senate would be deeply humiliated and embarrassed about 
that reality taking place within this country.
  There is a housing crisis all over America--in Vermont and all over 
America--and I am not just talking about foreclosures. I am talking 
about the needs of working families to find safe and affordable 
housing. The President's response in the middle of this crisis is, 
let's provide 100,000 fewer section 8 housing vouchers to low-income 
families.
  The President, in his budget, has said there is not enough money for 
special education. We made a promise to school districts all over 
America decades ago. We said: If you mainstream kids--which I think is 
a great idea--we will pick up the very high cost of special education. 
That was the promise. Today, in Vermont and all over America, more and 
more kids are coming in with special ed needs. School districts are 
paying outrageously high property taxes to accommodate those kids. I 
think it is time to keep the promise we made to school districts and 
adequately fund special education. Yes, I think we should do that.
  I think we should adequately fund Head Start so all of the families 
in America who want their kids to get a decent start so they are not 
behind when they enter the first grade have that opportunity. But 
somehow, in the midst of not funding the needs of our kids, as well as 
not funding housing, not funding LIHEAP, not funding virtually every 
need of low- and middle-income families, the President does have some 
money available. If you are rich, the President has money available for 
you. The President believes we have enough money to provide $812 
billion in tax cuts for households earning more than $1 million per 
year over the

[[Page 3595]]

next decade--not for our children, not for the homeless, not for the 
hungry, but for people who are earning over $1 million a year.
  That is an absurd and obscene sense of priorities. Fortunately, while 
the budget resolution we will be debating this week is not perfect, it 
is a vast improvement over the President's budget. I thank the 
Presiding Officer, Senator Conrad, for his hard work in giving us that 
budget. Instead of cutting back on the educational needs of this 
country, this budget resolution provides $5.4 billion more than the 
President's request for education, including the largest increase for 
elementary and secondary education programs since 2002. Instead of 
cutting back on the needs of our veterans--which has long been the 
history of the Bush administration--this budget resolution provides a 
$3.2 billion increase over the President's budget for our veterans. 
Instead of ignoring the urgent need to reduce our dependence on foreign 
oil and fossil fuels, this budget resolution provides $8.45 billion to 
invest in clean energy, creating millions of good-paying, green-collar 
jobs and energy efficiency.
  Instead of cutting back on our Nation's enormous infrastructure 
needs--can you imagine the engineers, civil engineers, telling us we 
have over $1 trillion in unmet infrastructure needs, and this White 
House is refusing to even acknowledge the severity of the problem and 
is asking the cities and towns that are hard pressed to come up with 
the money?
  This budget resolution provides almost $9 billion more than the 
President for our roads, bridges, highways, sewers, and clean water 
improvement. It is not enough, but it is a step forward. I think over 
the long term, we can do even better than that. We have made progress 
in this budget, and we can do better.
  One area to which I will be paying particular attention is our 
children. It is not acceptable to me, as I said earlier, that we have 
the highest rate of childhood poverty among our children. Where are all 
of those people who keep talking about family values? How do they 
continue to ignore the reality that, by far, we have the highest rate 
of childhood poverty of any major country? Nearly one out of every five 
children in this country lives in poverty. That is not a family value; 
that is a national disgrace.
  What happens to these kids when they become adults? Many of them will 
do well, but many of them will not. My colleagues may have recently 
seen an article in many of the papers talking about the fact that the 
United States has more people behind bars, at great expense--great 
expense for States and for the Federal Government--than any other 
country; more than China in total numbers. I happen to believe there is 
a correlation between the fact that we have the highest rate of 
childhood poverty and kids who drop off the wagon when they are young--
they drop out of society, they do drugs, they do destructive activity, 
they end up in jail, and we spend $50,000 to keep them in jail--rather 
than providing the childcare and educational opportunities they need.
  In my opinion, there are three major trends in American society that 
we should be addressing in this budget process. First, the fact that 
the United States has the most unequal distribution of wealth and 
income of any major country, and the gap between the very rich and 
everyone else is growing wider.
  Second, as I mentioned earlier, we have the highest rate of childhood 
poverty. Third--and I know the Presiding Officer has made this point 
over and over again--we have a $9.2 trillion national debt, which is 
soaring to $10 trillion; that under the Bush administration we have 
seen a $3 trillion increase in the national debt. This is a debt that 
is unsustainable economically, and it is a debt that is immoral because 
we are simply piling it up and leaving it to our kids and our 
grandchildren.
  I think those are some of the trends in American society that we 
should be dealing with in this budget. This week, I will be offering an 
amendment which is being cosponsored by Senators Durbin, Mikulski and 
Boxer, which is a very simple amendment. It doesn't go as far as I 
personally would like it to go, but it is a step forward perhaps in 
changing the nature of the debate that we have on the floor of the 
Senate. It puts the needs of our kids, working families, persons with 
disabilities, and senior citizens on fixed incomes ahead of the wealthy 
few. That is what it does.
  Specifically, this amendment would restore the top income tax bracket 
to 39.6 percent for households earning more than $1 million per year.
  That is the only group of people impacted, households earning more 
than $1 million a year. That is three-tenths of 1 percent of our 
population. We use that revenue to address the urgent unmet needs of 
our kids, dealing with job creation and deficit reduction.
  According to the Joint Tax Committee, restoring the top income tax 
bracket for people making more than $1 million to what it was in 2000, 
before the Bush tax breaks for the wealthy, would increase revenue by 
$32.5 billion over the next 3 years, including $10.8 billion in fiscal 
year 2009 alone.
  We have a choice in the Senate. We can give $32.5 billion to the top 
three-tenths of 1 percent, or people making at least $1 million a year, 
including billionaires, or else we can do something else with this 
money. Let me suggest we should do something else. Let me suggest that 
at a time when all of the Presidential candidates are talking about 
change, change, change, when the American people want to move our 
country in a new direction, maybe the Senate can begin that journey of 
taking this Nation in a new way that is more equitable, more fair, and 
begins to address longstanding social needs.
  Here is the option: $32.5 billion more in tax relief for millionaires 
and billionaires--and I suspect that many of our friends on the 
Republican side think that is a great idea--or there is another option. 
It is $10 billion over a 3-year period to go into the program of 
special ed. This will not only allow school districts the opportunity 
to better educate kids with special ed needs, it will also lower 
property taxes and local taxes. Most importantly, it will keep the 
promise that was made to school districts all over this country.
  The Federal Government made a promise that it would fund 40 percent 
of the cost of special ed. Unfortunately, today we are about at 17 
percent. If you want to raise our credibility, let's keep the promise 
we made to school districts all over America and take care of some of 
our most vulnerable kids. So $10 billion goes to that.
  Then this amendment would also increase Head Start by $5 billion over 
the next 3 years. Every study indicates that Head Start works. It gives 
kids, who otherwise don't have the intellectual and emotional 
environment, the chance to do well when they get to school. It is a 
good investment. It is better to invest $5 billion in Head Start than 
it would be in jails.
  This amendment would provide a $4 billion increase for the Child Care 
Development Block Grant Program so that working families all over this 
country will have a fair shot at trying to find affordable childcare.
  This amendment puts a $3.5 billion increase into the Food Stamp 
Program. In my view, hunger in America is not something we should be 
about. This will take us a small step toward addressing hunger.
  This amendment would put $4 billion into the LIHEAP program because 
nobody in America should go cold in the winter or die of heat exposure 
when the temperature gets to 120 and they don't have an air 
conditioner.
  This amendment would also provide $3 billion for school construction, 
and it would create good-paying jobs in the process and make sure our 
kids have good schools in which to learn.
  Also, this amendment would reduce the deficit by $3 billion. So that 
is what we do. We reduce the deficit, protect our children, and protect 
the most vulnerable people. That is one option. Or we give another $32 
billion in tax relief to people who don't need it. I think the choice 
is pretty clear. I hope this amendment will receive widespread support.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sanders). The Senator from Michigan is 
recognized.

[[Page 3596]]


  Ms. STABENOW. First, I thank our colleague from Vermont, who is 
passionate and cares very deeply about people in the country, about 
their future, and about the children. I could not agree more with him 
about what has been the underfunding of a very important investment, 
and that is special education.
  The Federal Government was supposed to pay 40 percent of special 
education and has never, I believe, gotten over 18 or 19 percent. So I 
thank the Senator for the amendment he will offer later.
  I thank the Budget Committee chairman also who is someone who does 
such an extraordinary job on a daily basis on such a wide range of 
issues. There is no one more committed to the long-term fiscal health 
of the country, no one more committed to getting our priorities right, 
no one who works more effectively across the aisle to bring people 
together to do the right thing. So I thank our distinguished colleague, 
the chairman of the Budget Committee, for all of his incredible 
leadership and pointing us in the right direction and creating a budget 
resolution that I am proud of.
  Mr. CONRAD. Will the Senator yield?
  Ms. STABENOW. Yes.
  Mr. CONRAD. I thank the distinguished Senator from Michigan, who is 
an incredibly valuable member of the Budget Committee, and also 
incredibly important member of the Finance Committee and the 
Agriculture Committee. We are able to serve on three committees 
together, and that is rare around here. My admiration for her grows 
every day. In terms of her leadership, we could not have produced a 
budget resolution as responsible as this one, nor one that embraces the 
needs of the American people and their values as closely as this one 
without the leadership of the Senator from Michigan. I wanted to tell 
her how much I appreciate that.
  Ms. STABENOW. I thank the Senator. That means a lot.
  Mr. President, I am going to take a few minutes because I expect to 
have multiple opportunities in which to participate and talk about 
various parts of the budget resolution that I believe reflect the 
values and priorities of the American people. That is what budgets are. 
That is what our own individual budgets are.
  When we look at our checkbooks and where we spend our money, we hope 
it reflects the values we want to project. Sometimes it does and 
sometimes it doesn't in my own budget, my own checkbook. But the 
reality is, that is our job in terms of the Federal budget and where we 
invest that makes sense for American families.
  I have to say that listening to colleagues tonight, as I had the 
opportunity to preside--colleagues on the other side of the aisle--I 
heard more of the same, unfortunately, that we have seen for the last 8 
years. Six of those eight years have been dominated by colleagues on 
the other side of the aisle, by a Republican President and a Republican 
Congress. Unfortunately, in my mind, when we talk about what they are 
going to propose, in totality what we see is more debt. We see more tax 
cuts for the wealthiest among us, more spending in Iraq and, at the 
same time, we see less investment in America. That is exactly the 
opposite of what we ought to be doing.
  Our budget changes that. It focuses on balancing the budget by 2012 
and 2013. It provides middle-class tax cuts so we can make sure the 
folks who are trying to hold things together--everybody talks about 
middle-class families and middle-class people being squeezed, seeing 
gas prices and health care and childcare costs go up. Yet the reality 
is, unfortunately, the budget put forward by the President doesn't help 
them at all. I am proud to say we have a budget that, in fact, invests 
in America. I want to speak to one piece of that.
  Last year, we set up three main priorities for our budget, and I was 
very proud of those--one to fully fund veterans health care and make 
sure we are keeping the promises to the veterans of America. We did it 
last year, and we are doing it again this year. We will continue, as 
long as we are in the majority, to make sure that is the case. We want 
to make sure people have the opportunity to go to college. We passed 
the largest package since the GI bill after World War II. No. 3 was 
children's health insurance, which we passed on a bipartisan basis. It 
was an extraordinary effort. We actually had the votes to overturn a 
Presidential veto and could not do that in the House of 
Representatives. We added 10 million children to the Children's Health 
Insurance Program, which gives them the opportunity to make sure their 
children have health insurance.
  This year, we continue those things, but we have three more items we 
have picked. Mr. President, just to be simple, what I would say is our 
priorities are jobs, jobs, jobs. I can tell you, coming from the great 
State of Michigan, that is certainly what we want our focus to be on. 
We are talking about middle-income families who are struggling. And the 
best stimulus that you can possibly give somebody is a good-paying job 
so they can pay their bills, take care of their family, send their kids 
to college, and be able to have the American dream. I am very proud of 
the fact that our budget focuses on three priorities: jobs, jobs, jobs. 
How?
  We have three pieces in our budget. We focus on green-collar jobs. I 
am very proud of the fact that the initiative I put forward is 
incorporated. The Presiding Officer is passionate about pieces of this 
legislation as well. We know there is a new economy. We know that 
alternative energy and moving forward in ways that will address global 
warming and stop our dependence on foreign oil can create jobs as well. 
So we have a major new initiative in this bill for green-collar jobs.
  Secondly, jobs rebuilding America--water projects, sewers, roads, 
bridges. We are at a point in our country where we have an aging 
infrastructure. A lot of we baby boomers are aging but at the same time 
so is the infrastructure around us. The great thing about investing and 
rebuilding America is that these are not jobs you can outsource to 
another country; these are jobs right here in America--good-paying 
jobs. That is our second priority.
  Our third priority is to continue our focus on education and job 
training. We know we need to refocus on job training and on those who 
lost jobs because of trade by fully funding trade adjustment assistance 
for people to go back to school and gain new opportunities.
  Mr. President, we are saying jobs, jobs, jobs. I want to focus 
specifically on the piece in which I have been most involved. This is 
very exciting. We passed an energy bill last year with a number of 
programs in it that were not funded but that were great ideas. This 
year, we come back and say let's make those things a reality in this 
budget.
  Energy efficiency and conservation: Providing over $1.1 billion for 
State and local communities to not only focus on energy efficiency and 
conservation but buildings and weatherization. There is a huge amount 
of energy savings to be had by focusing in this area. It also creates 
lots and lots of jobs. It will put people to work weatherizing 
buildings and focusing on energy efficiency.
  Advanced batteries: For us to go where we want to go in terms of new 
alternative fuel vehicles, it involves focusing on advanced battery 
technology. We are doing that but not nearly as fast as other 
countries. In the American budget last year, there was $22 million. Yet 
you can look over to China, Japan, and South Korea where hundreds of 
millions of dollars are being spent. As a result of that, we see very 
tangible things happening. When Ford Motor Company came forward with 
the first Ford Escape hybrid, an American SUV hybrid, unfortunately, 
even though the brain power came from here and the engineering came 
from here, the battery came from Japan because we weren't making them 
here.
  We don't want to change from dependence on foreign oil to a 
dependence on foreign technology. So investing in the future in battery 
technology is incredibly important, not only for vehicles but battery 
storage is critical for such things as winds turbines, solar, and other 
areas where we need to be able to move forward with alternative

[[Page 3597]]

energy. Battery storage is critical. I am proud that we put forward for 
the first time an aggressive investment in innovation and production 
here at home.
  Retooling older plants. As we have new standards for fuel efficiency 
coming into play, we want to make sure we are retooling our old plants 
to keep American jobs here, biofuel production and access, meaning 
infrastructure. I come from a State where we are growing the biofuels 
and making the automobiles. If you cannot drive up to the service 
station and fuel with E-85 or biofuel, it is not going to matter in the 
end.
  So being able to have that infrastructure and investment in 
infrastructure is absolutely critical. Finally, a green job training 
program to refocus on those jobs we know are there for the future. 
Again, the Presiding Officer has been a passionate advocate, and I know 
he believes strongly that jobs and energy and focusing on global 
warming and jobs can go together, and that is what this does. This says 
we are going to take this first step to focus on the American people.
  What I will say again, as we go forward, there are many items that 
are in this budget that are very important. But what I am very proud of 
is the fact that we have put forward a budget resolution with three 
very simple priorities: jobs, jobs, jobs. And that is right where the 
American people are. People want American jobs where they can care for 
their families, they can have the dignity of work, they can have good 
wages and be able to have an American dream. This budget resolution is 
laser-focused on that priority.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. COBURN. Mr. President, I am going to spend a few minutes tonight 
on some observations. My hope is over the next couple of days to 
outline something that has never been done on the Senate floor before, 
and that is to discuss where we as a body fail. We are all the time 
telling the American people what we do great or how bad the other side 
is, but rarely do we take a look at ourselves and say: What is going 
on? What are the problems we face?
  I had a great weekend this weekend in Oklahoma. Part of Oklahoma got 
snow, part of it had 65 degrees and Sun and no wind. But I had some 
experiences I want to share because I think they are pertinent and also 
poignant to the issue we are discussing.
  I also note I have been listening to the debate all afternoon, and 
the debate is nothing but finger-pointing--one budget, the other 
budget, how bad somebody is, what somebody didn't do, what somebody 
wants to do. It strikes me that as I reflect on the people whom I saw 
this weekend and their hopes and dreams, most of this debate does not 
have anything to do with them. Most of this debate has to do with us, 
which is exactly the opposite reason of why we were sent here. What we 
have heard is a partisan debate, partisanship based on parties, not 
partisanship based on principles, not partisanship based on children, 
not partisanship based on the future, but who can twang it, who can 
manipulate it, who can create doubt and undermine someone else's 
position.
  I traveled to Oklahoma City. My brother has been in the hospital for 
16 days. He had a major operation called Whipple--it takes a long time 
to get over it--for pancreatic carcinoma. That is what they do the 
operation for. He has four kids and four grandkids and one on the way. 
I got to thinking, as he lay there with an NG tube in him and a feeding 
tube through his jejunum, what would he like for his kids? What would 
he like for us to be talking about for the future? Down the hall were a 
whole lot of other people just like him. He is 61 years old. He is not 
thinking about himself as he lays there in the hospital. He is thinking 
about what is the future for his grandkids.
  I visited with one of my longest term friends this weekend. He is not 
thinking about himself right now. He is thinking about his grandkids. 
He has one and one on the way, going to be delivered this next weekend. 
He didn't mention one thing about himself. He mentioned about what the 
future was for his kids.
  I think about the ladies whom I saw this morning in my medical office 
about to have babies. Their hopes and their dreams are about the 
generation that is to come, about how this miracle birth is going to 
take place over the next couple of weeks for both these ladies. One is 
named Natalie and one is named Brooke; one is a first-time mom, the 
other is a second-time mom. The things they are looking forward to with 
their children are totally dependent on whether we act as adults in 
this body.
  I have just been struck at how far off the mark we are.
  I think Kent Conrad is a great guy. I looked at what he did last 
year. He is a pretty fiscally conservative guy. Kent sponsored less 
than $20 billion worth of new spending over the next 5 years, total 
sponsorships. Many times in the last 3 or 4 years, we have had debates 
about how we handle the problems. The differences between us are not 
that great. What guides us, though, and what is destroying our country, 
I fear, is the fact that we are putting political parties and the 
benefits of the political budget ahead of the best interests of our 
kids.
  One of the things I hope to do tomorrow is to outline for the 
American public and this body everything I found in the last 3 years in 
terms of waste on an annualized basis. I want my colleagues to hear 
that again. Everything I have found in terms of waste where we do not 
do it right, where we are wasting taxpayers' dollars every year, and I 
can conservatively, just on what I found and I can fully document--I 
want you to understand that, Mr. President; it is not Tom Coburn's 
opinion, it is the opinion of the GAO, the CBO, oversight committees, 
and other committees of Congress that are documenting what I am about 
to share.
  What I am going to share tomorrow is how we fail because we are 
talking about a budget today--I told Kent Conrad, I am not out to game 
his budget. It will spend more money. That is not a whole lot different 
from what we have been doing. But how dare we spend another penny when 
I can document, and none of my colleagues can refute, $366 billion a 
year of waste or fraud, $366 billion a year. Let me explain what that 
means to the average consumer.
  If you are at home today and you are in the 25-percent tax bracket in 
terms of income tax, what that means is that about 9 percent of the 
money you pay, we blow. So that is one-third, that is 9 out of the 28 
percent, one-third of all the money you pay to the Federal Government, 
not counting your Social Security and Medicare taxes, but of your 
income taxes, one-third of it, we blow.
  The interesting thing is that not since 1995 has the Congress done 
any rescission spending. Let me explain what that is. That is the 
Congress looks at our budget and says: Are there any areas where we can 
save money, where we are not doing well, where we can be more 
efficient, where we can improve things? We haven't had a rescission 
package since 1995. That is 13 years that we have not had a rescission 
package. There are lots of reasons for that, none of them good. It does 
not matter which party is in control. There has not been a rescission 
package for 13 years. So it is not about parties. It is not about 
gaming somebody because somebody is a Democrat or somebody is a 
Republican. Our problems in our Nation today are much more serious than 
partisanship. They are much greater than the beneficial effects of 
winning an election based on how you can make somebody else look lousy.
  One of the important things I hope will come out as we go through 
this in the next couple of days is whether we really care about what is 
going to happen. We can look at the stock market--it has weak knees 
today; look at the price of commodities--it is rising. There is no 
secret we are in a time of economic weakness. Depression is described 
as two quarters successively. We are probably there. Nobody knows. 
Nobody has a crystal ball to know that. But the fact is, it is what we 
are leaving right now for these two, Brooke and Natalie's children who 
are going to

[[Page 3598]]

be born in the next 3 weeks. What do we leave them? We are leaving them 
a gift, and the gift is debtor's prison.
  Let me say that again. I don't say that lightly. We are leaving them 
a gift. According to the Government Accountability Office, if you are 
born tomorrow, you inherit $400,000 of unfunded liabilities. Does 
anybody know anybody who is working and struggling and making a middle-
class income or even an upper income who is going to be able to afford 
that amount? Just paying the interest on it is $28,000 a year, and you 
have to absorb that by the time you get old enough to work. So we are 
talking about another $6,000 worth of interest before they start paying 
off any principal. So, in essence, the heritage through our 
incompetence, our bickering, our partisanship because we have to show 
somebody up, the heritage is every kid who is born, by the time they 
get a chance to work, is going to be accumulating about $1 million 
worth of debt. The question we have to ask ourselves is, What happens 
to them? What happens to the dream of a Brooke or a Natalie and their 
children? What is going to happen to them?
  We are about this far from losing the triple-A credit rating on our 
country, on our bonds. At the same time, we see that in the last 8 
years, the price of gold relative to the dollar is fourfold. What does 
that tell us? Is there a shortage of gold? No. Is there a fourfold 
increase in the demand for gold for industrial uses? No. It is a flight 
to safety because many people in the world do not believe we are going 
to be able to pay back the $79 trillion of unfunded liabilities we have 
left.
  So as we come to a budget for the United States and we pass one--
which we will, probably--we do it absent the light of looking at $360 
billion-plus that is wasted every year--$360 billion. People might say: 
What is that? It is pretty easy. How about Medicare fraud, $80 billion 
a year. How about Medicare improper payments? We pay people when they 
do not deserve to be paid--not fraud, just incompetency--$10 billion a 
year. There is $90 billion in one program. There is nothing in this 
budget that fixes that situation. There was nothing in the Republican 
budgets that fixed that. Why not? I know the answer to why not. The 
answer to why not is because we were too busy making political games, 
political strokes. We were too busy being partisan. The time for 
partisanship in our country is past. We may not believe that, but 
history is going to show it.
  David Walker, the Comptroller General of the United States, one of 
the fairest, most openminded men I believe I have ever met in my life, 
on Wednesday is leaving that position. Why is he doing that? He has a 
guaranteed job until 2012, a great job, head of an agency that really 
is stellar in what it does in its performance. Why is he leaving that 
position? Because he is scared to death for our country because nobody 
is listening in positions of power. Nobody is paying attention to the 
unsustainable course on which we find ourselves. We are not. We haven't 
in the budget. We didn't in our budget. We are not. We don't on the 
supplementals that come through here to ``fund the war'' because we 
load up $20 billion to $30 billion more debt right on top of our kids.
  We hear all these false numbers. Yes, I said false. The budget 
numbers are games. The President's numbers about the deficit are wrong. 
The Budget Committee's numbers about the deficit are wrong. They are 
not realistic. They do not take into account the fact that we are going 
to steal about $170 billion worth of Social Security money this year--I 
think $163 billion is the accurate number. We are going to write an 
IOU, and then we are not going to tell the American public that we 
increased the debt another $163 billion. We are just going to pass that 
along to our kids.
  I have some little things for you to think about as we outline this. 
There is $2.5 billion a year in Social Security disability fraud. There 
is another $1 billion in improper payments. Think about this. Just $2.5 
billion. Just $2.5 billion. Just 2,500 millions. Just 2,500 millions or 
2,500,000 thousands. They are pretty hard numbers to get our hands on.
  So anyhow, in the next few days, I am going to list out one by one, I 
am going to go through everything we have seen in the last 3 years that 
continues daily in this Federal Government that this body won't attack. 
When we offer amendments in this body, they are either accepted so they 
can be thrown out in conference when they actually do something, such 
as the census amendment that was in the Senate. We are now going to be 
asked for about $2 billion more for the census even though we have been 
saying all along there was a problem there. We ignored it, the House 
conferees with the Senate conferees ignored it, and now we are going to 
spend $2 billion more.
  What we are going to do is outline thoroughly what just one office, 
just one Senate office, has found over 3 years, and it is all going to 
be fully documented, with footnotes, so you can see exactly where it 
came from. It is going to be indisputable.
  Now ask yourself, if you are an American out there struggling to pay 
your gas and things are not looking great for the next 6 months for 
you, what would you think if all the Senators did that and we really 
did get rid of all the waste, fraud, and abuse in the Federal 
Government, or at least a meaningful component of it, and that we 
really probably could cut $600 billion out of our budget, which would 
mean we could either--if you wanted a bigger Government, you could do 
more, or if you wanted to pay fewer taxes, you could pay less? But most 
importantly, we could live up to the heritage that is ours, which is 
creating an opportunity for our children and our grandchildren in the 
future.
  I am convinced that Americans aren't really asking for higher taxes. 
What they are asking for is smart spending, hard work by us to make 
sure what we spend is worth it. What they are asking for is no more 
earmarks. That is what 85 percent of them are asking for. And they are 
asking for no more bridges to nowhere and what it symbolizes in terms 
of excess, in terms of a lack of common sense or a lack of caring. I 
don't know which it is, but the fact is, we are on a collision course 
that is going to undermine the future of this country.
  Will Durant, a historian, said that democracies never fail and are 
never collapsed from without until they have moral decay that causes 
the collapse from within. When we are spending the money of our 
grandchildren today and not doing anything about the waste we have in 
our budget, the question has to be asked: Are we already there? Have we 
already risen to the point where the political class, the political 
elites care so much about their positions--both parties--that they are 
willing to throw the future of the next two generations of this great 
country under the bus?
  The next year is critical for this Nation, as we see what happened 
today in the stock market, another lower earnings, as we see consumer 
confidence decline. Wouldn't it be nice if the Senate stood up to the 
challenge that is facing this country and did so without the first 
partisan word about parties and said: Let's fix it. Let's fix it.
  I have had an ongoing study since I have been in Government to ask 
Federal employees this question, and I have never had a different 
answer. And the question is this: If you are a Federal employee, no 
matter where you work, what branch you work in, or what you do, if you 
had to, tomorrow, for the sake of our future, become 5 percent more 
efficient--in other words, not spend $1 out of $20--could you do it? Do 
you realize I have asked that question thousands of times, and I have 
never been told no. I have never been told no.
  Well, if that is the case, why aren't we doing it, when we are going 
to have a $607 billion deficit? We are going to be at $10 trillion of 
debt at the end of this year. That is real debt. That doesn't talk 
about unfunded liabilities, which are $79 trillion. So we have $10 
trillion worth of debt, $79 trillion under infinity, of unfunded 
liabilities, and we don't talk about that.
  How is it that we find ourselves allowing such things as the military 
to continue to hang on to buildings they

[[Page 3599]]

do not want to the tune of $2 billion to $3 billion a year just in 
maintenance costs? How is it that we have $18 billion worth of 
buildings we don't want but we can't sell because of the roadblocks we 
have put in the way to be able to sell them? How is it that the 
Pentagon pays performance bonuses of $8 billion a year to companies 
that don't meet the requirements of performance bonuses? How is it that 
we are allowing that to continue to happen? We have known of that for 3 
years. Why is it happening?
  By the way, what is the big stir right now? The big stir is Boeing 
didn't get the contract and Lockheed--or EADS did. Nobody is asking the 
right question on that. It doesn't matter who got the contract. It is a 
cost-plus contract. If we don't know what we want in a refueling tanker 
now after 8 years of studying it, we are never going to know. So a $35 
billion contract is going to become a $45 billion contract, just like 
all the rest of them. Instead, we ought to be insisting, if you are 
doing business with the Federal Government and making money, you ought 
to take some risk. There ought to be no more cost-plus contracts on 
procurements like that. There ought to be none. Whoever has that 
contract ought to take part of the risk for the American people because 
they are having a great benefit in terms of the profits they are going 
to make.
  So we have a lot in front of us. What is $350 billion in annual 
waste? What does that mean? Here is what it means. It means $3,000 for 
every family. That is what we are wasting. Three thousand dollars for 
every family in this country we are blowing, that we are throwing away 
because we care more about partisanship than we do the future. We care 
more about making the executive branch look bad than we do the future. 
We care more about our earmarks than we do the future.
  There is a legitimate role for the Federal Government to have the 
Senate and the House direct spending. That is not the dispute. But the 
way you do it best is through oversight, not through earmarking. The 
way you do it best is to know exactly what is happening rather than 
earmarking it. The gateway drug to overspending since 1998 has been 
earmarks because when you earmark, you don't vote against bills. What 
happens is, the next time you earmark, the committee chairman comes up 
to you and says: You didn't vote for my bill last time. Sorry, I can't 
fill a thing. So we have this almost extortion-like process whereas 
earmarks are granted to you if you vote for a bill. You are not even 
looking at the total bill, you are looking at the earmarks.
  Do our children deserve better? Are they worth our sacrifice? Is it 
really worth it for us to not necessarily get what we want if we can 
secure the future? I am having trouble knowing whether this body really 
believes that. We have outlined to appropriations committees, everybody 
has been sent a report of everything we have found in the last 3 years, 
and it has been essentially ignored because we are too interested in 
making sure we beat the path to looking good at home.
  When you take an oath to be a U.S. Senator--and I don't think this is 
said often enough--there is nothing in that oath that says anything 
about your State. I am not here to represent the vital interests of 
Oklahoma. I was elected by Oklahomans to represent the vital interests 
of this country. And when I get confused about where my loyalties lie, 
our country suffers, and that is exactly what is happening to us right 
now.
  We have gone from 600 earmarks in 1998 to a high of 14,870, almost 
12,000 last year. What is going on? Where is the common sense? People 
from Vermont to Oklahoma to California to New Mexico to Montana, they 
know better. So the special interests of the few are being advantaged 
while we sacrifice those that come after us. Now, that is a firm 
indictment. But you can't continue to waste $360 billion a year, ignore 
oversight, not do anything about it, and then puff up and say--
Republican and Democrat--I am going to pass a budget and I am never 
going to look at any of that.
  Well, that is exactly what my party has done. That is exactly what 
the party in charge today is doing. We are ignoring the very real fact 
that this Government needs hands-on management, it needs aggressive 
oversight, and it needs this $360 billion worth of waste eliminated in 
this budget. And if we pass this budget or any other budget--whether my 
party offered one or not, even the President's budget--if we pass any 
budget that doesn't take this into account, what we are doing is 
spitting all over the hopes and dreams of the youngest Americans in our 
country. We are saying: You don't count. We got ours, you will have to 
worry about getting yours. We will take, you will have to give. And, 
oh, by the way, we are sorry there is not going to be enough resources 
left for you to have a college education or to own a home or for us to 
defend ourselves or for you to have health care like many of us are 
going to have as we wander off at 65, knowing that you are going to be 
working hard through increased payroll taxes just to pay for the 
promises that we couldn't make efficient and that we overpromised.
  So, Mr. President, I know I have carried on some tonight, but I think 
our problems are much more severe than what our behavior would deem. I 
think the degree of difficulty we find ourselves in today is directly 
attributable to our lack of courage.
  We are more interested in not offending somebody than we are securing 
our kids' and grandkids' future. That is not something I want to be 
accused of. So I will take the ridicule of this body for being ``Doctor 
No,'' for saying: We are not going to spend more money on new things, 
we are not going to have more programs until we can pay for the 
programs we have.
  And if it takes one person saying: I am not going to agree to pass 
bills under unanimous consent, I am not going to agree to not have the 
opportunity to amend them, then so be it.
  The $3,000 per family per year is enough to make a difference, a big 
difference, in their future. I think Brooke's and Natalie's babies are 
worth it. I do not know about you all. I am ready to give up something. 
Most of all, I am willing to give up my seat in the Senate for doing 
what I think is right in the long term for our country.
  If I do what is politically expedient and win reelection, what good 
is it if I have not fixed the very real problems that are facing our 
country? It is time for a gut check in this country. It is time for the 
American people to look at you, us, and say: Are you really doing for 
us, or are you really doing for you? My accusation is too often we do 
for us and not for the generations to come.
  I will be back to outline in detail where this $360 million--billion; 
let me make sure everyone understands--$360 billion worth of waste, 
fraud, and abuse occurs every year in our budget, and we have done 
nothing. Let me say it again: We have done nothing about it.
  How dare we talk about raising taxes. How dare we talk about anything 
except doing the business that should be at hand, which is being good 
stewards of our children's future.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that on Tuesday, 
March 11, when the Senate resumes consideration of S. Con. Res. 70, the 
concurrent resolution on the budget, there be debate only, with no 
amendments in order, until the Senate recesses for the party conference 
meetings, and that the recess time on Tuesday be charged equally 
against each side. We will recess at 12:30 and come back at 2:15.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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