[Congressional Record (Bound Edition), Volume 154 (2008), Part 3]
[Senate]
[Pages 3749-3754]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             BUDGET ISSUES

  Mr. GREGG. Mr. President, I rise to speak about the budget.
  First, I express my respect for the people who have worked on this 
budget, my staff especially but also the Democratic staff, and the 
chairman of the Budget Committee, Senator Conrad.
  We are, however, in an extraordinarily difficult time as a nation. We 
confront major issues. We confront international issues involving the 
threat of Islamic terrorism. We confront domestic issues of even more 
or equal significance--not equal significance; nothing is more 
significant than the threat of a terrorist attack with some sort of 
weapons of mass destruction, but we confront huge domestic issues such 
as the projected bankruptcy of the Nation. That is a pretty big issue, 
that is an undeniable fact that is going to occur unless we take some 
action because of the fact that the baby boom generation is beginning 
to retire, and the cost they will put on the Federal Government and, 
therefore, on our children who support them through taxes is going to 
be extraordinary. We also confront the extremely difficult issue of 
energy policy and the cost of gasoline. A barrel of gasoline went over 
$107. It is not projected to come down. The effect on the economy is 
devastating. We confront the fact that we have a Federal Government 
which is spending and continues to spend significantly more than it is 
taking in and, as a result, is spending the Social Security surplus and 
is significantly adding to the debt of the Nation.
  One would hope that in light of these very large issues--the threat 
of terrorism, the issue of the retirement of the baby boom generation 
and the fiscal devastation that is going to bring to our children's 
ability to have an affordable lifestyle, the issue of the cost of 
energy, the issue of the size of the Federal Government and its growth 
at a pace which it cannot sustain, the tax on the American people, 
which gasoline now represents, which is undermining the economy, and 
the general tax policy of the proposed budget which will undermine it 
even further--that the Democratic leadership of Congress would have 
come forward with a budget that showed some imagination, some 
creativity, some initiative in the area of addressing some of these 
crucial problems.
  Regrettably, what we got was the same old-same old--a budget filled 
with taxes; a budget filled with spending on this special interest 
program and that special interest program, a budget which underfunds 
the national defense, a budget which dramatically increases taxes on 
working Americans, a budget which dramatically increases the debt of 
the Federal Government and therefore the debt passed on to our 
children, a budget which raids the Social Security trust fund, a budget 
which has no creativity in the area of trying to address entitlement 
reform, a budget which uses gimmick after gimmick after gimmick and 
even gimmicks its own gimmicks in the area of pay-go, in the area of 
discipline, in the area of revenues. To say the least, it should be an 
embarrassment because it is such a mediocre presentation. It passes the 
problems on to the next generation. It doesn't confront them. It 
doesn't even try to confront them and simply aggravates those problems 
for the next generation.
  That is unfortunate because we are running out of time here. We are 
the generation of leadership, the baby boom generation. We have some 
obligation to fix the problems we are going to pass on to our children. 
I believe we have a significant obligation to do that. But this budget 
doesn't accomplish anything in that area. This budget has one thought 
in mind. It is not jobs, jobs, jobs, as the majority leader said; it is 
reelect, reelect, reelect--win the next election rather than trying to 
solve the problems which we are passing on to the next generation.
  The horizon of this budget is somewhere this July, this August, as we 
move into the full-scale election cycle, when they can go to this 
interest group and say, we have given you this money, and this interest 
group and say, we have given you this money, and then deny that they 
are taxing people because the taxes for those costs won't hit people 
until after the election and deny that they are fudging the numbers 
through using gimmicks because those events won't occur until after the 
election.
  It is truly a budget that fails on all counts to take on what is the 
real issues facing our Nation--how we fight terrorism, how we support 
our troops in the field, how we deal with this looming, massive, 
unfunded liability of the retirement of the baby boom generation which 
will put unsustainable costs on our children and make their lives 
essentially less viable in the way of affluence than ours has been, a 
budget that dramatically increases taxes on working Americans in the 
name of raising taxes on high-income Americans, a budget that 
dramatically grows the debt and raids Social Security funds.
  This list, as shown here, is what it does. I think I pretty much 
outlined it. It raises taxes by $1.2 trillion. It dramatically 
increases spending. I will get into that a little bit. It dramatically 
grows the debt. It gimmicks its own enforcement mechanisms--pay-go and 
all the other enforcement mechanisms it allegedly has in place. Then it 
does nothing to address the $66 trillion unfunded liability, which is 
such a huge number nobody can understand it. So to try to put it in 
context, it means, I think, that every American today has a $120,000 
debt. This budget adds $24,000 to that debt. This budget does nothing 
to try to improve that situation.
  The chairman of the committee said:

       We need to be tough on spending.

  The number of spending cuts in the Democratic budget: zero. The 
number of spending increases: $22 billion over this baseline this year 
stated on the discretionary side. On the entitlement

[[Page 3750]]

side: $466 billion--increases in spending. They allege it is $18 
billion, but they play another one of their games, another one of their 
budget games. They take $4 billion in what is known as advanced 
appropriations--that means they take it out of next year and spend it 
this year--$4 billion additional doing that.
  It has been done in the past. I have opposed it in the past. But this 
time they plus up the number a little bit so their numbers can work so 
they can say to their different constituencies: We are going to spend 
money on you. You can have this money. We got it for you. We are going 
to borrow it from next year's budget--$4 billion.
  Mr. President, $22 billion in new spending. That is a pretty big 
number: $22 billion. That would literally run the State of New 
Hampshire for 3 or 4 years. But that is not the whole number because 
you have to put it in a 5-year context. It is actually over $200 
billion of new discretionary spending because once you spend that $22 
billion this year, it does not come out of the budget next year, it 
goes into what is known as the baseline. It becomes the floor, and we 
build on that.
  Last year, they wanted to spend $22 billion more too, so over 2 years 
they have bumped things up--or tried to bump things up--$44 billion. 
Plus last year they put in a supplemental for another $21 billion. I 
know these numbers are starting to be thrown around like crazy here, 
but the simple fact here is, it is big money--big money--being spent on 
constituencies that vote for them.
  The chairman of the Budget Committee said: I am prepared to get 
savings out of long-term entitlement programs. How many savings are 
there out of long-term entitlement programs in this budget? Zero net 
savings; zero. While the deficit in the long-term accounts goes up 
dramatically--$66 trillion is owed to those accounts we cannot pay 
for--this budget adds $466 billion into those accounts. It is a 
staggering amount of money. There is no attempt to adjust that at all.
  Now, it is interesting, we will hear from our colleagues on the other 
side of the aisle--let me go to this one first, and then I will get 
into that. The national debt goes up over $2 trillion under this 
budget. Mr. President, $2 trillion is added to the national debt. My 
colleagues on the other side: ``I really believe increasing the debt is 
the threat.'' That is one of Senator Conrad's great phrases: The debt 
is the threat. I agree with him. The problem is, he is aggravating the 
threat with this budget. Now, he does not have too much choice because 
he is spending so much money we don't have that he is aggravating the 
debt.
  And now, the famous wall of debt chart. It goes up, and goes up 
dramatically, under this budget. We will hear from the other side of 
the aisle: But the President's budget does the same thing, or it is 
even worse. That is a canard. That is a straw dog. The President does 
not sign the budget. The President is not part of the budget process 
other than he has an obligation to send a budget up here for the 
purposes of our review, which is, depending on the President, uniformly 
rejected by the party in power.
  He sends up the budget. He announces what his priorities are. But, 
uniquely, the budget instrument--and this is an important point--is a 
child of the Congress. It is a child of the Congress. Congress produces 
the budget. The Senate produces a budget. The House produces a budget. 
It goes to conference committee. It comes back to the Senate and comes 
back to the House. But do you know what it does not do, as with most 
laws? It does not go to the President to be signed. He cannot veto a 
budget. He cannot sign a budget. He simply gets a budget in the form 
the Congress wants. It is a resolution. It is not a bill.
  Why is that? Because the Founding Fathers, in their wisdom, and the 
people who put together the Budget Act--some of whom are still here, 
Senator Byrd and Senator Domenici being two of the key players in that 
in 1976, I think--knew the power of the purse, which is what the budget 
is all about, lies with the Congress. The Congress has the first and 
primary responsibility on the budget.
  So when you throw out: Well, but the President did this and the 
President did that, you are trying to hide in the weeds. Congress has 
the responsibility for the budget. It is the Congress which passes the 
resolution that creates the budget, and the President does not sign it 
at all. So it is the Congress you should turn to and say: You are the 
responsible party here. Are you being responsible? That is the issue: 
Are you being responsible as a Congress? This Congress is not being 
responsible because the big issues we face as a nation are either being 
finessed, gamed, ignored, or aggravated under this budget.
  As I said before, this budget adds $27,000--$27,000--to the debt that 
each child born today has to pay. So if you are having a child or you 
just had a child--I just had a niece this year. She is a wonderful 
little girl. She came into the world. She got a $27,000 bill from the 
Democratic leadership of this Congress--a pretty stiff bill to stick 
her with, a pretty stiff bill to stick any American with who is just 
getting started. It is not fair at all.
  Let's get into some specifics about this budget.
  First is the allegation that there is some sort of disciplining 
mechanisms around here. I take this on first because it is such a fraud 
that it has to be taken on first. I have heard more Senators on the 
other side of the aisle saying: We are going to use pay-go to 
discipline the budget, darn it. When we use pay-go, we limit spending 
around here.
  ``Pay-go'' is a motherhood term, regrettably. It is a title that has 
been put on supposedly a procedure which requires you to pay for new 
spending and to pay when you cut taxes. Well, time and time again, our 
colleagues on the other side of the aisle, when they were confronted 
with a choice of actually having to use pay-go--which would have caused 
them to have to cut spending somewhere in order to increase spending 
somewhere else--gamed the system. They moved a year here or a year 
there so they would not be subject to pay-go.
  They cut programs from reasonable funding levels such as SCHIP by 85 
percent in 1 year, so they would not be confronted--knowing it was 
never going to happen--so they would not be confronted with pay-go 
enforcement mechanisms. They took the MILC Program and put it in a 
supplemental bill so they could build it into the base and not be 
subject to pay-go.
  Time after time after time--15 different times--they gamed pay-go to 
the tune of $143 billion. I call it ``Swiss cheese-go.'' I think that 
is a much more truth-in-labeling act. There is no reason we should ever 
call this thing pay-go again. Let's just call it ``Swiss cheese-go'' 
because that is what it is. Whenever it is inconvenient for the 
Democratic leadership to have to subject themselves to their own 
discipline rules, they waive them, game them, or ignore them.
  The first obligation of a national government is national defense. 
The most important thing about national defense is to make sure your 
soldiers who are in the field have the resources they need to do the 
job we have asked them to do. Whether you agree with what they are 
doing, you should never send a soldier into the field and not support 
that soldier with everything he or she needs.
  I understand there is a huge debate, especially on the other side of 
the aisle, as to whether we should cut the legs out from underneath our 
troops in Iraq. We all understand that. We voted on it here 43 times in 
this Congress. But there should be no question that those soldiers need 
the support as long as they are in the field. It is totally 
inappropriate and a total abrogation of responsibility of the Congress 
not to support those soldiers in the field.
  Now, in this exercise, the White House does not come with clean 
hands. I was fairly aggressive in complaining about their decision to 
send up a request for only $70 billion--which is a lot of money, but 
that is nowhere near what it is going to cost to keep our soldiers in 
the field over the next year. To their credit, at least, the people at 
the Pentagon--Secretary Gates, when confronted with that number, said: 
No,

[[Page 3751]]

that is wrong. Even though OMB may have sent it up here in the 
President's presentation, it is wrong. We are going to need something 
like $150 billion to $170 billion, somewhere between $80 billion and 
$100 billion more than they have in the budget.
  The chairman of the Budget Committee agreed. He said:

       And we know, I think with great certainty, $70 billion is 
     not the right answer for 2009, zero is not the right answer 
     for 2010.

  Those are the two numbers the White House had. And Secretary Gates 
said: No, it is not the right answer, when he was asked. He said: It 
has to be a higher number.
  So the documentation is pretty clear, even if the White House did not 
send up the right number, by the time we acted--and remember, once 
again, it is the Congress that does the budget, not the White House--by 
the time we acted, we should have put a number in here that adequately 
reflects what our soldiers are going to need to remain safe.
  Now, even if you oppose this war vehemently, as some do on the other 
side of the aisle--to the point where they are willing to take soldiers 
out next week, which you cannot physically do; we all know it will take 
6 months to a year to get the soldiers out of there--with this number, 
you cannot get the soldiers back with $70 billion, literally. This 
number does not allow you to get the soldiers back.
  What happens with this number is you are going to have our soldiers 
in the field without ammunition, without resupply, without the 
facilities they need, and without the equipment they need. This number 
assumes we are going to leave our soldiers in the field unprotected--
unprotected. It is an inexcusable, irresponsible number to put in the 
budget simply to make your budget look better. This number should have 
been at least $70 billion to $100 billion higher to have an accurate 
budget.
  Then the budget moves on. We have heard more about how there are 
uncollected taxes, and if we collect the uncollected taxes, we will 
solve all our problems. I call it the ``Wizard of Oz'' approach to 
budgeting. There is somebody behind a curtain somewhere who owes us a 
lot of money. We are going to find that person. We are going to get the 
money. That is going to take care of everything. We will all be happy.
  Last year, they suggested we do this to the tune of $300 billion. 
Last year, they were given the benefit of the doubt. They had never 
done a budget before, so you have to give them some benefit of the 
doubt. OK. Let's see how much they got. The chairman of the committee 
again:

       If we just collect 15 percent of the [tax gap]--

  That is what is referred to--

     that would be over $300 billion. That alone would come close 
     to meeting the revenues needed under our budget resolution.

  That was last year. Do you remember how much they collected last year 
from the tax gap? Zero. In fact, they cut in their budget the 
collection capabilities of the IRS. Not only was the IRS not able to go 
out and collect more money that was owed, they were having trouble 
collecting what they did get which was owed because their collection 
process has been cut.
  So you would think after such a pathetic performance they would 
presume not to do this again. It would take incredible--I don't know--
verve to claim one more time that you are going to generate these types 
of revenues. But they do. They do: $300 billion. They are going to get 
it from out there in the virtual land of tax policy. What they got was 
zero--zero.
  This budget at its essence is a massive tax increase. That is 
essentially what it is. It is a massive tax increase, the purpose of 
which is to expand the size of the Federal Government--grow the Federal 
Government--and, in my humble opinion, as a result, make it much more 
difficult for us as a government to produce a positive and strong 
economy and to give people an opportunity to live lives that are as 
affluent and, hopefully, as successful as prior generations.
  The amount of tax increase in the bill is $1.2 trillion--the largest 
tax increase in history: $1.2 trillion. Under the assumptions of this 
budget, every tax goes up to rates which were fairly high and which the 
Congress agreed were too high back in the early 2000s. The marriage 
penalty goes up. The child tax credit goes up. Rates go up. Capital 
gains go up. Dividends go up. The estate tax goes up. They are all 
assumed to go up. AMT is assumed to be continued for every year but 
this year.
  We have a new chart called the ``Wall of Taxes'' because that is what 
this budget does. It generates a wall of tax increases, climbing every 
year as a percentage of GDP. It is important to know it has 
historically been the case that we have presumed the Federal Government 
would take something akin to 18.2 percent of Gross National Product in 
tax revenues. That has been the case since the end of World War II. 
This budget blows through that number. But equally important, it should 
be noted that in blowing through that number and adding $1.2 trillion 
in new taxes, it doesn't address the outyear issues which are going to 
cause taxes to go up even higher. The failure to do anything on 
entitlement reform and then use up all the revenues to fund this group 
and that group that you happen to be happy about giving money to for 
the next election puts you in an even worse position when, hopefully, 
the Congress gets around someday to addressing the biggest fiscal 
policy issue, which is entitlement reform.
  In addition, it needs to be noted this tax increase of $1.2 trillion 
is the beginning. It is the beginning of the Democratic proposals. 
Because if we listen to their two national candidates for President, in 
the case of one, they have already offered and put in place over $300 
billion--$300 billion of new programs in 1 year. That adds up to 
something like $1.2 trillion of additional programs over 5 years. That 
is on top of this number.
  Now, when Senator Obama makes that representation: I am going to add 
$300 billion of new programs every year, the practical effect is he has 
to pay for it somehow. His claim is he is going to pay for it by taxing 
the rich. He is going to tax the rich and pay for his--he actually, 
ironically, has the same number here: $1.2 trillion of additional 
spending over that 5-year period. Well, if you tax the rich, which 
would mean you raise the top bracket from 35 percent to 39.6 percent, 
which was the bracket under President Clinton, you generate how much 
income to the Federal Government? Twenty-five billion dollars. Multiply 
that by 5 years, which is what this number is--the $1.2 trillion 
Senator Obama has suggested we spend in new programs--and you have $225 
billion. So he is about $1 trillion short in order to pay for what he 
is suggesting in new programs.
  But there is another irony. This tax number already assumes that $225 
billion. This tax number assumes the rates have been increased to 39.6 
percent for the top income brackets, with the practical effect of that 
being it has already been spent. This budget already spends the money 
and the tax revenues candidate Senator Obama has suggested he is going 
to spend on his new programs. So he doesn't have any money available to 
him.
  So now we have a Democratic budget which increases taxes by $1.2 
trillion, increases spending dramatically, as I have gone through 
already, and then you have layered on top of that a national 
candidate--two national candidates, because Senator Clinton is not far 
behind Senator Obama in suggesting new programs--who is going to add 
another $1.2 trillion on top. The numbers become staggering. But what 
does it all translate into? Huge tax increases on working Americans--
huge, absolutely staggering.
  To try to put this in context, without the Obama tax increases or the 
Clinton tax increases, 27 million small businesses in this country, 
under the Democratic budget, will see their taxes go up $4,100 each per 
year. Now, you can double that if Senator Obama were to put in all his 
programs. Eighteen million seniors will see their taxes jump $2,200 
each because of this budget--$2,200 each. That is a lot of money.
  Let's try to put that in context. That basically buys groceries for 
most

[[Page 3752]]

Americans for, I think it is half a year. It certainly buys a fair 
amount of gas, although not as much as we would like because the price 
of gas is so outrageous. It certainly helps with a mortgage payment or 
maybe a child going to school or helping a grandchild go to school in 
the case of a senior. But serious money: $2,200. That is what this 
budget in new taxes is going to cost average seniors in this country.
  Something else should be pointed out. This budget assumes the capital 
gains and dividend rates are going to go up, and the primary benefit of 
capital gains and dividend rates flows through senior citizens. As a 
percentage, seniors take more advantage of dividend rates and more 
advantage of capital gains than any other demographic group. So it is 
directly targeted on the tax increase.
  All of this works out to--for the average American family, there is a 
$2,300 tax increase in this bill, and that doesn't include how much it 
would be increased if you were to put the Obama or Clinton programmatic 
initiatives on top of that. It would almost double this number. The 
appetite to raise taxes on the other side of the aisle is unquenchable. 
It is huge. Let's put it that way. It is unstoppable, it appears. When 
this budget passes, John Q. Public is going to have to write Uncle Sam 
a check for $2,300. That is a pretty expensive experience for the 
American people.
  What do they get for it? What do they get for it? Let's come back to 
what they get for it. Not a lot. Do they get the troops properly 
supported when they are fighting for us overseas? No. No, they are $100 
billion short on that. Do they get entitlement reform that helps us 
down the road with the pressure that is going to be put on our children 
by the cost of the expansion of the entitlement programs due to the 
retirement of the baby boom generation? No. No, they don't get that. Do 
they get health care reform? No. There is no health care reform in 
here. Do they get tax reform? No. There is no tax reform in here. Do 
they get programmatic initiatives which make sense and which are 
presented in a coherent and orderly manner? Are there programs 
eliminated that have maybe been around too long in exchange for adding 
programs? We have study after study that tells us about programs we can 
eliminate. No, not one program is eliminated in this budget--just an 
expansion. Just add to the base; bump it up another $200 billion over 
the next 5 years and pass that bill on to our children.
  Passing the problem on, that is what this budget is. Courageous? 
Creative? Imaginative? Addressing the core issues which we confront as 
a nation and which do threaten us, whether it is terrorism, the cost of 
energy, the cost of the Government, the retirement of the baby boom 
generation? These issues are not going away, but you wouldn't know they 
even existed if you looked at this budget. It is a regrettable missed 
opportunity in a very difficult time. It is unfortunate that all it has 
become is your classic liberal tax-and-spend initiative.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota is 
recognized.
  Mr. CONRAD. Mr. President, I wish to welcome back the ranking member 
of the Budget Committee. I have listened with great interest to his 
presentation this morning, a highly imaginative presentation. It is 
highly imaginative. The presentation he has made that purportedly is 
about the budget we have offered has virtually nothing to do with the 
budget that is before us. It is largely a concoction, although I must 
say when he talks about creativity, I give him high marks for 
creativity because this is complete make-believe, what we have heard 
from the other side, in terms of a description of what is on this 
floor.
  Maybe a good place to start is to look at what the Senator said last 
year about our budget because it is almost identical to what he has 
said about this year's budget. He said last year we were going to have 
$1 trillion of tax increases if our budget passed. Well, our budget 
passed, and now we can go check the record. We don't have to have a 
bunch of projections or suggestions about what might happen; we can now 
look back and see what actually did happen. Last year, the Senator from 
New Hampshire, the ranking member of the Budget Committee--by the way, 
for whom I have high regard. We work together very closely. We have 
substantive differences, as will become more clear as these days wear 
on, but I have high regard for the Senator from New Hampshire.
  But let's check the record. Did we increase taxes, as he asserted 
would happen last year, by $1 trillion? No. Did we increase taxes at 
all? No. Did we cut taxes? Yes. How much did the Democratic Congress 
cut taxes? Well, here it is. It is not a projection. This is not make-
believe. This is a fact. The Democratic Congress has cut taxes $194 
billion, with $7 billion of revenue raisers. So that is the factual 
record with respect to tax cuts. The Democratic Congress cut taxes by 
$194 billion, most of this in the stimulus package passed to give lift 
to the economy.
  Now, the Senator talks about where we are headed under this budget, 
but perhaps the best way to anticipate where we are headed is to look 
back and see where we have come from. When they controlled everything--
they controlled the House, they controlled the White House, they 
controlled the Senate--here is their record. Here is what they did. 
They started with budget surpluses, and they ran up record deficits. 
You can see this is the record of the Bush administration: $413 billion 
was the biggest deficit in the history of the United States. In fact, 
they have five of the biggest deficits in the history of the United 
States. That is their record. Revenue was flat. They increased spending 
about 50 percent, and the result was they have exploded the debt of the 
United States. Again, this is not a projection. This is not a forecast. 
This is their record.
  Our friends controlled it all. They controlled the White House, they 
controlled the Senate of the United States, they controlled the House. 
Here is what happened to the debt. They have built a wall of debt that 
is unprecedented. They took us from a debt at the end of the 
President's first year of $5.8 trillion. They have run it up to over $9 
billion last year, and by the end of 2009, which will be the 8 years 
this President is responsible for, they will almost have doubled the 
debt of the country in 8 years. It is a stunning record, and I don't 
mean stunning in a good way.
  Now, the Senator from New Hampshire says we have this massive 
increase in spending. Well, not in this budget. That is not the case. 
Here is a chart that shows the President's spending, which is the red 
line. The green line is the spending under this resolution. This is 
over the 5 years of this budget. You will see that they are very close 
to each other. In fact, the difference in spending over the 5 years 
between our budget and the President's budget is 2.1 percent. We have 
2.1 percent more spending than the President's budget. Why? Because we 
have restored cuts he made in things such as the COPS Program that has 
put 100,000 police officers on the street. The President's budget 
eliminates the COPS Program. The President's budget eliminates the 
weatherization program in this country, a program to go back and 
weatherize homes so they are more energy efficient. He says: No, we 
don't want to do that anymore. The President's budget cuts the grants 
to first responders, our emergency medical personnel, our ambulance 
crews, and other first responders, including our firefighters, and cuts 
those by 78 percent. We didn't think that was a good idea.
  So, yes, we do spend some more. We also spend more to reduce our 
dependence on foreign energy because we think that is a smart 
investment. We do spend some more on education because we think that is 
critical for the future strength of the country. And we do spend some 
more money on infrastructure because we don't want any more bridges 
collapsing, as we saw happen in Minnesota, where the bridge over 35W 
collapsed with people on it.
  So, yes, we spend 2 percent more over the 5 years. For this year, the 
total spending in the President's budget is $3.04 trillion, and in our 
budget it is

[[Page 3753]]

$3.08 trillion. That is a difference of 1 percent.
  All this great spending the Senator just described--the problem is 
the facts. The thing that gets in the way of his recitation is the 
facts. The facts are that we spend 1 percent more than the President in 
2009.
  The Senator also said we have not been responsible with the troops. 
Let me just indicate that if we have not been responsible, then the 
President hasn't been responsible either because we have the identical 
amount in our budget for defense and the war as the President had in 
his budget--identical, not a dime of difference. So if we have been 
irresponsible, then the Senator is saying the President has been 
irresponsible because we match him dollar for dollar.
  The Senator said something that is quite jarring. Do you remember 
what he said about the President's role in the budget? He said the 
President doesn't have anything to do with the budget. Really? The 
President of the United States has nothing to do with the budget of the 
United States? I don't think so. The President sends us a budget. If 
you look at the historic record, what you find is that Congress gives 
the President, in the budget, very close to what he asks for. That is 
the record going back 40 or 50 years.
  Now, he added to that by saying the President cannot veto or sign a 
budget. That is true. The way the process works is the President sends 
us his budget, and then a budget is developed by Congress that does not 
go to the President for his signature or his veto; that is true. But to 
suggest that the President really doesn't have anything to do with the 
budget, that is not true.
  The President sends us his budget blueprint, and then he has the 
power of the veto to enforce all of the provisions that flow from a 
budget. He can veto any appropriations bill; those are the bills that 
spend money. He can veto any revenue bill; those are the bills that 
raise money. So to suggest the President doesn't have anything to do 
with the budget is really misleading to people. I think if you just 
think of it in a commonsense way, of course the President of the United 
States would have a lot to do with the budget policy of the country. He 
should have, and he does have. It is true he does not sign the budget 
resolution. He cannot veto it. But he does have the capability to 
enforce its spending and its revenue because he has the power of the 
veto.
  Let's look at the question of revenues. Again, our colleague said we 
are going to raise taxes a trillion dollars. That is exactly what he 
said last year: Democrats are here to raise your taxes a trillion 
dollars. I think he just likes that number. It doesn't matter what 
budget we present; he says a trillion dollars. I have already shown 
that what Democrats have done once we have controlled the House and 
Senate was actually reduce taxes by $194 billion. That is our record so 
far. That is a fact. There is additional revenue in our proposal over 
the 5 years. You can see the difference. On this chart, our revenue 
line is the green one, and the President's is the red line. You can see 
they are very close. If you look at the numbers, over the 5 years of 
this budget, the President has $15.2 trillion in revenue; that is the 
proposal he sent to us. We have $15.6 trillion in revenue. That is a 
difference of 2.6 percent.
  I don't know where the Senator comes up with this trillion dollars 
because that is not our proposal. Our proposal--when the Baucus 
amendment is adopted--is to raise $15.6 trillion, in comparison to the 
President's $15.2 trillion, which is a difference of 2.6 percent.
  Now, the other day the Senator put up a sign that said--he quoted me 
in a ``60 Minutes'' interview saying that the first thing we need is 
more revenue. That is true, I did say that. They didn't include the 
whole quote. Here is the whole quote from the transcript. Steve Kroft 
is talking to me, and he is asking me about the head of the General 
Accounting Office, who is warning the country that we are on an 
unsustainable course because of the long-term commitments that have 
been made. He says:

       What do you think about David Walker and what he's doing?

  I said:

       I think David Walker is providing an enormous public 
     service.

  Mr. Kroft asked:

       Do you agree with his figures and his projections?

  I said:

       I do. You know, I mean, we could always question the 
     precise nature of this projection or that projection, but 
     that misses the point . . . The larger story that he is 
     telling is exactly correct.

  Mr. Kroft:

       Are most people in Washington aware of how bad it is?

  I said:

       Yes, they know in large measure here, Republicans and 
     Democrats, that we are on a course that doesn't add up.

  This is one place Senator Gregg and I are in complete agreement--that 
we are on an unsustainable course.
  Mr. Kroft asked:

       Why doesn't somebody do something about it?
  My answer:

       Because it's always easier not to, because it's always 
     easier to defer, to kick the can down the road. . . .

  Mr. Kroft asked:

       Do you think taxes ought to be raised?

  My response:

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

  But then the Senator didn't include the next sentence:

       We need to be tough on spending. And we need to reform the 
     entitlement programs. We need to do all of it.

  That was my answer. I believe it is the truth.
  Not only have I said that, but Senator Gregg has said we need more 
revenue. Senator Gregg himself said:

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

  He is talking about the baby boom generation.
  So if we are going to be honest with the American people, we do need 
to be tough on spending, we do need to have more revenue. I have said 
repeatedly that before we ask for a tax increase from anyone, we ought 
to go after the tax gap, the difference between what is owed and what 
is paid. The Internal Revenue Service says that back in 2001 that gap 
was over $300 billion in a year. I think it is unfair to the vast 
majority of us who pay what we owe to allow others to escape.
  But it doesn't end there. We also have offshore tax havens. Our 
Permanent Subcommittee on Investigations has indicated that we are 
losing $100 billion a year to those offshore tax havens. We have had an 
additional report in the last 2 weeks of more of these tax havens 
proliferating. If you go on the Internet and put in ``offshore tax 
havens,'' you will get a million hits because there are a lot of con 
jobs going on. We ought to shut them down before we ask for a tax 
increase from anyone.
  In addition, there are these abusive tax shelters, where some 
companies are actually buying European sewer systems and writing them 
off on their books in the United States to lower their taxes and then 
leasing the sewer systems back to the European cities that built them.
  Mr. President, the Senator also went after the pay-go rule. He calls 
it ``Swiss cheese-go,'' which is humorous, and I always appreciate the 
humor. But let's give both sides of the story.
  The pay-go rule says that if you are going to have new mandatory 
spending or tax cuts, they must be offset or must get a supermajority 
vote. This is a means of disciplining the budget process that has 
worked well in the past. We have instituted it.
  When Senator Gregg was in charge of the Budget Committee, he said 
this about pay-go when he supported it:

       The second budget discipline, which is paygo, essentially 
     says if you are going to add a new entitlement program, or 
     you are going to cut taxes during a period, especially a 
     period of deficits, you must offset that event so it becomes 
     a budget-neutral event that also lapses. If we do not do 
     this, if we do not put back in place caps and paygo 
     mechanisms, we will have no budget discipline in this 
     Congress and, as a result, we will dramatically aggravate the 
     deficit, which will

[[Page 3754]]

      impact a lot of important issues, but especially Social 
     Security.

  He had it right when he was an advocate for pay-go.
  We had a strong pay-go rule from 1991 to 2000. We climbed out of the 
deficit ditch. We produced surpluses. And then our friends came into 
power, and in 2000 they dramatically weakened pay-go, and look what 
happened. We went right back to an ocean of red ink. We have now put 
pay-go back into effect, since the 2004 elections. Let's look at the 
record. The number of times pay-go was raised was 13. The number of 
times pay-go was waived was zero. Pay-go was raised 13 times and waived 
zero.
  Pay-go is working. Excluding the AMT legislation that passed last 
year, the Senate pay-go scorecard has a positive balance of $1.3 
billion over 11 years. Every bill sent to the President--other than AMT 
and the stimulus package just passed--has been paid for or more than 
paid for. Pay-go also has significantly produced a deterrent effect. 
Anybody who doubts that should sit in my seat for 1 week and see the 
number of times colleagues decide not to offer spending proposals 
because of the pay-go rule.
  On the other side, they have said that there is $143 billion that 
they claim pay-go has been violated. Let's look at each one of their 
claims. And I only have 2 minutes left before Senator Stabenow will be 
taking over.
  Immigration reform. They claim there is a $30 billion loophole. In 
fact, zero. The immigration reform bill never passed the Senate. 
Remember, the test is what goes to the President of the United States. 
The bill never went to the President of the United States.
  The energy bill--the final bill that was sent to the President--was 
more than paid for. They claim a $4.2 billion shortfall. In fact, it 
was more than paid for and had a surplus of $52 million.
  Mental health parity. That bill hasn't yet gone to the President. 
They are claiming a $2.8 billion shortfall. That bill hasn't gone to 
the President; it is still in conference. The promise has been made by 
the conferees that it will comply with pay-go.
  The prescription drug user fee amendments. The final bill sent to the 
President was more than paid for. They are claiming a $200 million 
shortfall. In fact, it was $4 million to the good.
  The minimum wage increase was fully paid for on a unified basis. They 
claim a $50 million shortfall. In fact, it was zero.
  The Water Resources Development Act. The final bill sent to the 
President was more than paid for. It passed the Senate on a vote of 81 
to 12.
  Other items they have mentioned. The children's health insurance 
reauthorization was more than paid for over 6 and 11 years. They claim 
a $45 billion shortfall. In fact, it is a savings of $207 million.
  The farm bill--more than paid for over 6 and 11 years. By the way, 
that has not yet gone to the President. They are claiming a $27 million 
shortfall. In fact, there are savings.
  Higher education reconciliation--more than paid for over 6 and 11 
years. They show a $26 billion shortfall. In fact, the savings will 
continue to grow in decades beyond the budget window, and over 6 and 11 
years that bill is completely paid for.
  The 2007 supplemental, county payments, payment in lieu of taxes, and 
MILC. They claim a $6.5 billion shortfall.
  The pay-go rule applies to mandatory spending and revenues, not to 
appropriated accounts. Discretionary is controlled by separate caps.
  The 2008 budget resolution established a new 60-vote point of order 
to limit changes in mandatory spending on appropriations bills and to 
strengthen pay-go even further.
  They call pay-go ``Swiss cheese-go.'' Their pay-go was ``easy 
cheese''--``easy cheese'' because what they allowed under their pay-go 
was for the debt to explode. No forecast, no projection, just the 
facts, just the record. They have increased the debt from $5.8 trillion 
to over $9 trillion today, and under the President's proposal, it is 
going to go to over $10 trillion. That is the record.
  We have now reached the 11 o'clock hour. Senator Stabenow is going to 
take the chair, and there are other Senators awaiting recognition. We 
have a meeting to try to determine where we go with the rest of the 
day. But I hope we have a good, substantive debate. I look forward to 
it.
  I thank the Chair and yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Montana.
  Mr. BAUCUS. Mr. President, what is the pending business?
  Ms. STABENOW. Mr. President, if I may, since we are on the 
resolution, I yield time----
  The ACTING PRESIDENT pro tempore. There is 7\1/2\ minutes remaining 
in morning business.
  The Senator from Montana.

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