[Congressional Record (Bound Edition), Volume 155 (2009), Part 7]
[Senate]
[Pages 9371-9373]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               THE BUDGET

  Mr. CARPER. Mr. President, I rise this evening to address, as others 
have today, the fiscal year 2010 budget resolution that is currently 
being considered by this body. We take up this budget under the specter 
of--some would say gloomy, some would say perilous--economic conditions 
amidst a credit crisis that threatens long-term damage to our economy--
not just to the economy in our country but to economies all over the 
world. As a result, this budget is very likely probably not the most 
important vote we cast in the time we serve here but certainly one of 
the most important we will vote on this year, and maybe in this 
Congress.
  I wish to begin this evening by reminding my colleagues--I know we 
have been reminded already today and we will be reminded tomorrow--that 
our friend, former colleague, Barack Obama, took office just 70 days or 
so ago. Not since the inauguration of Franklin Delano Roosevelt has an 
American President inherited such far-reaching economic turmoil and 
been asked to do so much in such a short period of time.
  Over these last 10 weeks, President Obama has become very well 
acquainted with the economic mess he inherited from the previous 
administration. On the day his predecessor took office--this was about 
8 years ago--our Federal Government enjoyed multibillion-dollar 
surpluses as far as the eye could see. We were on track, believe it or 
not, if you recall, on track to actually pay down our national debt, 
which at the time was a little under $6 trillion. Since then, sadly, we 
have seen those surpluses disappear, and they have been replaced 
instead by the largest budget deficits I think we have witnessed in our 
country's history. In fact, we ran up as much new debt in the last 28 
years as I think we did in the first 220 years of our Nation's history.
  When President Bush left office earlier this year, our Nation and the 
new President were left--and us, here in the Senate and the House--to 
bear the cost of two wars, tax cuts that tend to favor the wealthiest 
among us, an increase of more than 50 percent in Government spending, 
and $10.6 trillion in debt. Again, that is roughly twice what former 
President Bush inherited on his first day on the job.
  The fact is that our badly damaged credit system, our banking system, 
along with rising unemployment numbers and a contracting economy, have 
threatened to reduce future revenues to the point where the burgeoning 
budget deficits of the last 8 years could become a permanent fixture if 
we are not careful.
  The damage of these potential deficits cannot be overlooked. I 
believe the deficits matter. I think our Presiding Officer knows the 
deficit matters--it matters for all of us.
  Last year, American taxpayers paid some quarter of a trillion 
dollars, $250 billion, in interest payments--not principal, just 
interest payments--to creditors at home and around the world. I am told 
each citizen's share of today's debt amounts to more than $36,000 per 
person. Beyond our own borders, we now owe some $740 billion to China. 
That is almost three-quarters of a trillion dollars. We owe about $635 
billion to Japan. We owe $133 billion to Brazil. The list goes on and 
on.
  In all likelihood, the large deficits will eventually drive up 
interest rates for consumers. They will raise prices for goods and 
services, and they will combine to weaken America's financial 
competitiveness.
  The bigger our deficits become, the fewer resources we have for 
investments in energy, education and health care, and we will have 
fewer resources to help provide tax relief for the middle class and for 
small businesses that need it the most.
  Thankfully, both this President's budget and the Senate Budget 
Committee's proposed budget for fiscal year 2010, the year that begins 
this October 1, seek to reverse the trend set in motion by the previous 
administration. Under both plans, annual deficits will be cut in half 
over the next 4 years, by 2012.
  During his Fiscal Responsibility Summit, which I was fortunate to be 
able to attend along with Democratic and Republican colleagues, the 
President said these words:

       This will not be easy. It will require us to make difficult 
     decisions.

  There is an understatement.
  He went on to say we will:

       . . . face challenges we have long neglected.

  He went on to add:

       But I refuse to leave our children with a debt they cannot 
     repay--and that means taking responsibility right now, in 
     this administration--

  And, I might add, in this Congress--

     for getting our spending under control.

  The President is right. Meeting this budget goal will not be easy and 
will require tough choices and discipline by all of us. Some of these 
tough choices will come from the spending side, and in a difficult 
economic times, we have to make sure every dollar we collect from the 
taxpayers is spent wisely and effectively.
  As chairman of the Federal Financial Management Subcommittee of the 
Homeland Security and Governmental Affairs Committee, I have worked 
with Senate and House colleagues, including the Presiding Officer, to 
identify areas of Government spending that are wasteful and in many 
cases inefficient. One of these areas involves something called 
improper payments.
  According to data reported to the Office of Management and Budget by 
Federal agencies in their most recent financial statements, the Federal 
Government made something like $72 billion last fiscal year in 
overpayments--actually, improper payments, mostly overpayments. During 
a series of hearings held by my subcommittee, my colleagues and I 
learned from GAO that some agencies are not taking seriously their 
responsibility to properly account for Federal dollars they spend. We 
also learned that others may not have the resources they need to 
address their improper payments problem.
  Just think about this. This is a big budget. This is a budget that is 
hundreds of billions of dollars. But $72 billion was improperly paid, 
mostly overpayments.
  I plan to introduce legislation in the near future that will direct 
agencies to

[[Page 9372]]

focus more of their time and more of their resources on eliminating 
improper payments--and not just that, but to develop better improper 
payments remediation plans so they don't continue to make the same 
mistakes--and finally becoming more aggressive in the use of recovery 
auditing.
  I say to my sons, who are now 19 and 20, there is nothing wrong with 
making mistakes. We all make mistakes. The only people who don't make 
mistakes are the people who don't do anything. And if we are doing 
anything important, a lot of times we make mistakes. But the key here, 
on improper payments, is to figure out why we are making these mistakes 
on the improper payments and figure out how not to continue to make the 
same mistakes and, third, if we made overpayments, to figure out how to 
go out and recover taxpayers' moneys that have been overpaid.
  The proposal we will be introducing with bipartisan support will 
increase the use of recovery auditing, and the positive impact that 
recovery auditing will have on Government spending will be measured in 
billions of dollars.
  Even in a day and age where we are looking at a trillion-dollar-plus 
deficit, billions of dollars still count. A recent test of recovery 
auditing in just three States' Medicare Programs led to the recovery of 
$1 billion.
  The Presiding Officer heard me talk about this a time or two, along 
with the President, when he came to our luncheon last Wednesday here in 
the Capitol. Three years ago, we started doing I call postaudit 
recoveries in Medicare to try to identify moneys overpaid in Medicare. 
We went to three States--California, Texas, Florida--and began to try 
to recover moneys that were overpaid. The first year, we didn't get 
much of anything. The second year, we captured a little bit of money. 
Last year, it was close to $1 billion in just three States. What I 
suggested to the President and my colleagues: We should not just be 
doing this in three States; we should do it in all 50 States and 
recover real money. The other thing we ought to do is consider the 
Medicaid Program and see whether there is some way we can do with 
Medicaid, in terms of recovering misspent moneys, overpayments--we do 
that, take the same lessons from Medicare and apply them to Medicaid.
  I am pleased to see that the Senate budget makes a number of tough 
choices when it comes to Federal spending. Senator Conrad has shown 
great leadership and fiscal discipline in his drafting of this Senate 
resolution, and his counterpart over in the House, our old friend 
Congressman John Spratt from South Carolina, has managed to do the same 
in the House. The Senate Budget Committee has sent us a lean budget 
this year, relatively speaking, that increases discretionary spending, 
I am told, by about 5 percent over the fiscal 2009 level, despite calls 
to do much more. Frankly, that is a bit less than was asked for by our 
President.
  While making sure the taxpayer funds are spent wisely is crucial, I 
would just add that I, for one, reject the philosophy held by some that 
discretionary spending is the culprit--maybe the major or even the only 
culprit for our fiscal mess.
  Balanced budgets will not come just from reductions in discretionary 
spending. Fundamental reform of our major entitlement programs, coupled 
with some changes in our tax codes, must occur if we are to restore 
fiscal sanity to our Federal budget.
  On the entitlement side, the Presiding Officer, among a number of 
centrist Democrats, met today with our budget director OMB Director 
Peter Orszag. Among the things we talked about were entitlement 
programs and entitlement spending.
  The entitlement spending on health care consumes an ever-increasing 
percentage of our GDP, with the U.S. currently spending over $2 
trillion a year on health care. That is about 17 percent of GDP, and we 
are on a track to get up to about 20 percent in the next several 
years--20 percent of GDP just for health care.
  I am told that if you look at three programs now, three entitlement 
programs, Social Security, Medicare and Medicaid, if you gather the 
amounts, they are about 10 percent of our GDP. And we are on a track 
that in about 25 years, those three programs alone will amount to 25 
percent of GDP, and 20 percent of GDP is historically our whole 
budget--in just three programs. That is obviously not sustainable.
  And while we spend a whole ton of money, $2 trillion a year on health 
care, a number of folks suggest that about $700 billion, $700 billion 
of that money, that is about 35 percent of it, does not really improve 
our health outcomes.
  We spend more money than any other developed nation for health care 
and we certainly do not get better results. This cost growth raises the 
pricetag associated, as I said, with entitlement programs such as 
Medicaid as well.
  And I repeat myself that the current path we are on is clearly not 
sustainable, both for our fiscal health and for our medical health, and 
it is not sustainable as far as our being competitive with the rest of 
the world and our businesses trying to compete, whether building cars 
or windmills or building electronic equipment. It makes us 
uncompetitive around the world.
  America must reform its health care system. We have responsibility to 
help do that so we can reverse the rise in health care costs, while we 
improve the quality of care. We simply cannot afford to continue on 
this trajectory. As I have said, and I am sure my colleague presiding 
has, doing nothing is not an option.
  I wanted to commend tonight not only Senator Conrad, but I wanted to 
commend the Senate Budget Committee for including a deficit-neutral 
reserve fund in the Senate budget that will enable us to advance a 
health care reform bill and reduce Medicare and Medicaid's contribution 
to our budget deficit.
  Now, on the tax side, I am pleased the Senate budget provides middle-
class taxpayers with a measure of tax relief. They still have to pay 
taxes, but in this budget package and this spending plan they receive a 
measure of tax relief, something of which this President is a champion.
  Taxpayers need certainty, though, when it comes to making middle-
class tax provisions permanent. Taxpayers need certainty when it comes 
to the alternative minimum tax. And taxpayers certainly need certainty 
when it comes to the estate tax.
  The idea that we are going to have an estate tax this year, we are 
not going to have one next year, and then a year later after that we 
are going to go back to the same estate tax we had in 2001 does not 
make a whole lot of sense to us and to our constituents. But this 
budget begins the process of addressing those issues, and I look 
forward to working with my colleagues, both in the Finance Committee 
and on the Senate floor, in addressing them.
  On the estate tax, this budget includes a proposal that looks a lot 
like one I introduced a year or two ago. And it would permanently 
extend the 2009 rate of 45 percent, and an exemption of $7 million per 
couple. It would index that amount, that is exempted from taxes by the 
rate of inflation each year. So it is not going to be $7 million that 
is the exempt number forever; it will go up each year by the rate of 
inflation. And that which is not covered within that exemption is taxed 
at the rate of 45 percent, which is really right about where we are 
this year. I think this proposal represents a sensible way to balance 
our two critical goals, and seems fair and reasonable, is what Fox 
says.
  It helps us to avoid hitting middle-class taxpayers and small 
businesses. It helps us to avoid the problems we have had with the 
alternative minimum tax, where we have not indexed it in over 30 years.
  Finally middle-class families are finding out they are subject to the 
alternative minimum tax. And someday the same thing will happen to the 
estate tax if we do not index it.
  In addition to the estate tax provision, this budget extends the 
previous administration's 2001 and 2003 tax cuts for the middle class. 
We are not throwing out everything we have done in 2001 and 2003 in the 
Bush administration if

[[Page 9373]]

it is meritorious. And that is an example--those are examples of things 
we want to preserve. We think that preserving tax relief for the middle 
class is a high-yield, low-risk investment. It will be the middle 
class, we think, who lifts the economy out of the recession and ushers 
us through the decade of innovation and hopefully to prosperity. I 
believe this extension of these tax cuts will go a long way toward 
bolstering a resurgence.
  While many of these provisions seek to help stimulate growth through 
revenue modifications, we also need to make some other changes to our 
current tax policy in order to help increase revenues that will pay 
down our budget deficit. One way to do this is to close something we 
call the tax gap, which I am pleased to say is a high priority of this 
budget resolution. Most Americans, if they knew that something like 
$400 billion of taxes that are owed to the Federal Government are not 
being collected--and most people in this country pay their fair share 
of taxes--the idea that, gosh, almost a half a trillion is not being 
collected on an annual basis makes my blood boil, and I suspect makes 
it boil for a lot of other people.
  As it turns out, there are a number of things that we can do to 
address the tax gap. I am delighted in the budget document that we are 
seeing, it reflects a whole lot of steps we can take. Through my 
subcommittee that I chair on the Homeland Security and Governmental 
Affairs and through my work on the Finance Committee, I have been 
helped by a bunch of people to enable us to craft legislation--I will 
be introducing it soon--that helps close the tax gap, and we do it by 
focusing on improving compliance.
  I would say this. You and I, most people, if taxes are withheld from 
our income, we comply. We have a compliance rate of about 99 percent of 
paying our fair share of taxes. When our income is reported to the IRS 
on, say, a 1099, there is about a 90-percent, maybe 95 percent, 
compliance with paying our fair share of taxes.
  When there is not withholding of taxes, where there is not reporting 
of income, the rate of compliance drops way down--as low as 50 percent, 
even lower than that.
  I am looking forward to working with our new President and my 
colleagues, Democrats and Republicans, in a nonpartisan way, of putting 
together a package of proposals to meet the goals that are laid out in 
this budget, particularly with respect to making sure people pay their 
fair share of taxes.
  While the Senate budget does extend the Bush tax cuts for the middle 
class beyond fiscal year 2010, it does not do the same for some of our 
most affluent Americans. During the previous administration, some of 
the wealthiest Americans shouldered disproportionately less tax burden 
than do many members of the middle class.
  The budget before us seeks to restore a fairer balance while also 
providing the revenue needed to close our budget deficits over the next 
several fiscal years.
  Finally, I commend Senator Conrad and the President for acknowledging 
that we have to do more to address climate change in this budget--
something with which I know our Presiding Officer agrees--keeping open 
all of our options, including a cap-and-trade system which I have 
worked on for a number of years for reducing greenhouse gas emissions.
  Unfortunately, some of my colleagues have likened a climate cap-and-
trade program to a carbon tax. I always find it interesting that people 
around here seem to embrace the idea or propose the idea of a carbon 
tax instead of a cap-and-trade approach on climate change. Most of the 
people that seem to propose and embrace a carbon tax would not vote for 
one if they had the chance to, which is kind of ironic.
  Let me be clear. On a cap-and-trade system--and where we basically 
say for carbon dioxide emissions, we are going to put a cap on how much 
can be emitted--over time we are going to bring that cap down, and we 
are going to give folks, the emitters, the chance to trade as they 
reduce their emissions, to have an opportunity to trade with other 
emitters, and find ways to harness economic forces to reduce, in an 
effective way, an efficient way, our emissions of CO2.
  But among the advantages of a cap-and-trade system, it is flexible 
within our economy. It interacts with folks like in Europe who have 
been doing this cap-and-trade stuff for a while. It ensures that we get 
the needed pollution reductions.
  A great example of a cap-and-trade program is the Acid Rain Program. 
It was not set up by a Democrat. It was not set up by Bill Clinton. It 
was set up by former President Bush. George Herbert Walker Bush set it 
up in 1990.
  That cap-and-trade program, the Acid Rain Program, has reduced sulfur 
dioxide emissions at half the estimated cost and quicker than expected, 
making it one of the most successful environmental programs in our 
Nation's history.
  I hope my friends here will not forget that cap and trade is a 
valuable market tool that has been proven to secure air quality 
improvements at half the cost. It is not a tax.
  We have a chance to test this baby, see how it works. We have seen it 
work very well.
  Let me add in closing that this budget resolution puts the brakes on 
some of the budgetary tactics used in recent budgets and puts our 
Nation back on a path toward fiscal discipline. While we can't solve 
all our budget problems in 1 year, this bill represents the opening 
salvo in a multiyear battle to reduce our deficits and prevent our 
children from bearing the cost of ever greater deficits.
  At the President's first fiscal summit a month or so ago, he noted:

       While we are making important progress toward fiscal 
     responsibility this year, in this budget, this is just the 
     beginning. In the coming years, we'll be forced to make more 
     tough choices and do much to address our long-term 
     challenges.

  He is right. To paraphrase Robert Frost, we have miles to go before 
we sleep.
  I stand ready to help this President, to work with my colleagues, 
Republican and Democrat, House and Senate, to make some of those tough 
choices and to tackle the challenges in the years to come.
  I yield the floor.

                          ____________________