Salt Cedar Council Demonstration Act

Mr. President, we are having a crisis in the West. Actually, we are having a crisis anywhere that there are people who raise livestock. The crisis comes about as a result of neither fair trade nor free trade--in fact, the elimination of both. This bill is designed to make a correction in that. It is a clarification. I do not think the clarification would be necessary if enforcement were done, but this bill will clearly set out that a part of the problem can be solved.

Part of the crisis that particularly the small farmers and ranchers who raise livestock have is the drought we are having in the West. We are in the fourth year of a drought right now. That is resulting in a lot of for sale and auction signs going up on ranches. This is partly because they are not getting the proper price for their product. It is a controlled market; it is not a free market.

To bring it to a level that more people would understand, imagine trying to sell a house where the U.S. tradition might have changed so that everybody worked through a realtor, or at least 80 percent of the people worked through a realtor, and the realtor did not really show the house to other people. The realtor bought the house and then put it on the market themselves. The realtor had the capability to set the market price because of the other houses they owned.

That is what is happening with captive supply. There are a lot of technicalities to it. I sincerely hope my colleagues will take a look at it and understand it a little bit. It is very difficult. It is very detailed. It is very complicated to understand, but it is very important to understand. It is important to understand on behalf of the ranchers and consumers.

Now, one would think that if the price were being driven down for the rancher, those of us buying meat at the supermarket would get it for less. But if one tracks the price the ranchers are getting and the price the consumers are paying when the price goes down for the rancher, everything stays level for the consumer. So where is the money going? It is staying in the middle somewhere. We know where it is staying, and we know why it is staying, and it is control of the market. We do not usually allow that in the United States, but in this instance we allow it.

So 80 percent of the market is controlled by four packers, and they set the price. They set it in a way that the rancher has no control over it whatsoever. So the ones suffering this drought and suffering all the risk are the ones receiving the least money from the entire process. We do not believe in that in America. My bill is designed to change that.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the current law, but this law is not being enforced. What we are left with is unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced, and the cost to enforcing the law on a case-by-case basis in the courts is expensive and time consuming, today I propose the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays attention to the sign unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying any attention to because the police are too busy doing something else.

The bill I am introducing today is not just another sign on the road, it is a speed bump. It does not just warn cars to go slower, it makes it more difficult for them to speed. Does it solve the whole problem? No, but it is one speed bump on the way to solving the problem.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong. Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. Now, in other businesses, that sounds like how we already operate. But it is not the way the packer operates. Producers are only given a contract that says they will get a certain dollar above the average at the time of the slaughter. And then if the person who controls the market drives the price down, the average can be well below what they ever anticipated it would be.

Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. This prevents packers from manipulating the base price after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality grade or other factors outside packer control. It prevents packers from changing the base price based on the factors they do control.

Contracts that are based on the futures market are also exempted from the bill's requirements. In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. That would be pretty unique if they knew what the prices were on the products, particularly when it is captive supply. Whether they take the opportunity to bid or not is their choice. The key is they have the access to do so.

I have worked on a number of bills and we have had success getting them through the Senate, and then the lobbying effort in conference knocks them out. That has sincerely convinced me there is a controlled market. Every attempt we make to provide a little speed bump is taken out and it is usually in conference. It usually passes the House, passes the Senate--not in identical form--but it has trouble in the conference committee. That is because there are a lot more lobbyists for the packers than there are for the small ranchers and livestock producers.

My bill also limits the size of the contracts to the rough equivalent of a load of livestock, meaning 40 cattle or

30 swine. It does not limit the number of contracts that will be offered by any individual. This key portion prevents small- and medium- sized livestock producers like those found in Wyoming from being shut out of deals containing thousands of livestock per contract. The more animals you have in the contract, the less likely it is that people can freely participate in the bidding process. It eliminates people.

We are sticking a small number of animals in each contract, but lots of contracts will help us to arrive at a more fair price for the livestock. Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation, and undue preferences, the things mentioned in that 1921 act.

These are not the only benefits in my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. He is not guessing what he will sell it for; he has an exact price. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic. We tried a number of things to get price discovery so that the producers out there would have an idea what the true market is, whether it is being bought from other producers or being bought out of the captive supply. Every attempt we have made has been thwarted. They have found ways to put little loopholes in regulations so they do not have to report prices. That is not fair. It does not provide an open market.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. I wish I had time to share some of the heartrending stories of the way they have been taken to the cleaners on these unique contracts they are forced to sign if they want to be able to sell their product.

The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business and protect the consumers. If there was a fluctuation out here on the other end where the consumer is, we might not have quite the same concern, but the consumer is not getting the benefit of this fixed market. So we need to change the fixed market.

We need to change captive supply. My bill removes one of the largest obstructions preventing livestock producers from competing, and that is formula price contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field. It will help the economy of the entire United States. I ask for your help on this bill. We will be circulating some letters and further explanations so that we can have cosponsors; and pass the bill unanimously, I hope. I know that is a little difficult to obtain around here, but this is a very important issue and every State has livestock producers. It is time we took care of the livestock producers in a way that did not cost us a lot through enforcement.

I would love to see improved enforcement. I know there are other priority issues on enforcement, particularly since September 11, so I have tried to bring a little speed bump to provide accurate pricing. I ask for your help on the bill.

To reiterate:

Whenever there is a crisis the media has always served to focus the Nation's attention on the problem and who has been affected by it. Then it has been up to us, in the Congress, to review the problem and determine whether or not there was anything we could do to ease the suffering and repair the damage to someone's property and their livelihood.

Most of the time, when the media spots a crisis it is of such a magnitude that the pictures we see of the suffering are devastating and powerful. The images clearly cry out to us to take action and do what we can to restore, as much as possible, the lives of these people to normalcy.

We have all seen in these past few days the pictures of the devastating tornadoes that have wreaked havoc wherever they have touched down. Story after story has appeared in print and on television showing property destroyed, places of business torn in pieces, jobs in jeopardy and lives forever changed by the fury of a few moments of severe weather. Tornadoes do not last a long time, but they leave a path of devastation in their wake that leaves those affected by it forever changed.

Our thoughts and prayers go out to all of those who have been so affected and our hopes that they will be able to put their lives back together and go on as difficult as that will be to do.

As we view the devastation of those tornadoes, there are those in my State who have seen their livelihoods drastically affected by weather and unfair market policy, but they have not been so visible to us because we have not seen their faces on the nightly news or read their stories in the national newspapers. That is because not everyone who has seen their livelihood so drastically affected can be portrayed with quite the same kind of powerful images that depict those who have been touched by the ravages of severe weather patterns. Some problems that destroy livelihoods and weaken industries are far more subtle and more difficult to track.

Instead of being destroyed by a single blow, the industry I am referring to is being slowly put to death by the cruelest of methods-- thousands of small cuts brought on by the lethal combination of several years of drought, ambiguous regulations that are too easily taken advantage of and the lax enforcement of existing law which has allowed for the manipulation of the system to one group's advantage.

Our Nation's ranching industry is in trouble, and, due to the slower pace with which it has been affected, the only stark images we will see of the intensity of the problem are the ``for sale'' or ``up for auction'' signs that acknowledge the closing of a family owned ranch and the end of a family's dream that lasted for generations as the land and the business was handed down for many, many years.

Right now, as I speak, if you are a rancher in the West, you have two major problems affecting your ability to earn a living and provide for your family. The first is the continuing drought which has made it so difficult for ranchers to tend their cattle and provide them with good, affordable grazing.

The second is a regulatory nightmare that has held livestock producers captive by the chains of unfair and manipulative contracts. It is this regulatory nightmare that must be addressed, and which brings me to the floor today as I offer legislation to break the chains and require livestock contracts to contain a fixed base price and be traded in open, public markets.

So, what is this regulation that is destroying the health of our family ranchers? It's a practice called ``captive supply,'' a business practice not well known to those outside of the industry, but a practice that has had a tremendous impact on the ranchers of the West.

If you have not heard about the problem, I must point out that our ranchers have tried to bring it to our attention, but we have not fully focused on their needs. Whenever I travel to Wyoming, or hold a town meeting, or go over the week's mail that I receive from my constituents, I hear the cries for help from our ranchers in Wyoming, and throughout the West. One by one, and without exception, they are all clamoring for attention and relief so they can continue the work that so many in their family have done for so many years.

I could bring a stack of letters that come from people all across my State

about the problems they face. But, in the interest of time, I will read a small excerpt from one that will give you an idea of how bad things are in the ranching industry as our ranchers try to deal with captive supply.

A letter I received from a rancher in Lingle said that the issue of captive supply needed to be reviewed and addressed because it was ``slowly but surely putting small farmers/feeders out of business.'' He then added:

Until the existing laws are enforced in this area of

illegal activities, all other plans or laws will be of very

little consequence.

So what is captive supply and how is it harming our Nation's ranchers to such an extent? Simply put, captive supply refers to the ownership by meat packers of cattle or the contracts they issue to purchase livestock. It is done to ensure that packers will always have a consistent supply of livestock for their slaughterlines.

The original goal of captive supply makes good business sense. All businesses want to maintain a steady supply of animals to ensure a constant stream of production and control costs.

But captive supply allows packers to go beyond good organization and business performance--to market manipulation--and this is where the problem lies.

The packing industry is highly concentrated. Four companies control more than half of all U.S. hog slaughter and more than 80 percent of U.S. fed cattle slaughter. Using captive supply and the market power of concentration, packers can purposefully drive down the prices by refusing to buy in the open market. This deflates all livestock prices and limits the market access of producers that have not aligned with specific packers.

We made an attempt to address the problem of captive supply on the Senate floor, but the amendment to ban packer ownership of livestock more than 14 days before slaughter did not survive the conference committee on the farm bill. However, the problems caused by captive supplies are alive and well, just as Wyoming producers have testified to me in the phone calls, letters, faxes and emails I receive from them. Although I supported the packer ban and still do, I do not think that banning packer ownership of livestock will solve the entire captive supply problem. Packers are using numerous methods beyond direct ownership to control cattle and other livestock.

Currently, packers maintain captive supply through various means including direct ownership, forward contracts, and marketing agreements. The difference between the three is subtle, so let me take a moment to describe how they differ. Direct ownership refers to livestock owned by the packer. In forward contracts, producers agree to the delivery of cattle one week or more before slaughter with the price determined before slaughter. Forward contracts are typically fixed, meaning the base price is set.

As with forward contracts, marketing agreements also call for the delivery of livestock more than one week before slaughter, but the price is determined at or after slaughter. A formula pricing method is commonly used for cattle sold under marketing agreements. In formula pricing, instead of a fixed base price, an external reference price, such as the average price paid for cattle at a certain packing plant during one week, is used to determine the base price of the cattle. I find this very disturbing because the packer has the ability to manipulate the weekly average at a packing plant by refusing to buy in the open market. Unfortunately, marketing agreements and formula pricing are much more common than forward contracts.

In fact, the data published by USDA's Agricultural Marketing Service indicates that in the first week of May 2003, 39,149 of the cattle slaughtered were sold through a forward contract. By comparison, 207,955 of the cattle slaughtered were marketed through formula pricing marketing agreements. Packers were using five times as many formula pricing marketing agreements as forward contracts to purchase their slaughter cattle. As we can see, packers use more marketing agreements because of the advantages those ambiguous contracts give them over producers.

In the same week, 36,899 of the cattle slaughtered were directly owned by packers. These numbers demonstrate that the problem of captive supply is far more extensive than just packer ownership. In the first week of May, packer owned cattle only comprised 13 percent of captive cattle slaughtered. This is why we must act to solve the entire captive supply problem.

I realize it may be difficult to grasp the seriousness of the situation if you are not familiar with the cattle market. Most of us have not signed a contract to sell a load of livestock, but many of us have sold a house. To illustrate the seriousness of the problem, let's explore how you would sell a house using a formula-priced contract in a market structured like the current livestock market.

It is May, and you know you will be selling your home in September. As a wise seller, you want to find a buyer for your home before that time. It turns out that other people do not really buy homes from each other anymore. In fact, four main companies have taken over 80 percent of all real estate transactions. You really have no choice but to deal with one of these companies.

One of them offers you a contract, stating you will receive $10,000 over the average price of what other, similar homes are selling for in your area in September. To manage your risk and ensure a buyer, you have just been practically forced to sign a contract that doesn't specify how much you will receive for your house.

That tingle of fear in the pit of your stomach becomes full-fledged panic when you close the deal in September. You see, the four real estate companies have been planning ahead. They decide to pull away from the market. All the homes selling in September that are not contracted to the companies flood the market and the price for homes in your area drops $12,000. By trying to manage your risk, you sold your home for $2,000 below average.

As a homeowner, you would be outraged, wouldn't you? You would want to know why anyone had the ability to legally take advantage of you. Livestock producers have the same questions when they lose to the market pressures applied by captive supply. Captive supply gives packers the ability to discriminate against some producers. And those producers pay for it with their bottom line. At the same time, packers use contracts and marketing agreements to give privileged access and premiums to other producers regardless of the quality of their product. These uses of captive supply should be illegal. In fact, they are.

Section 202 of the Packers and Stockyards Act states in (3) (a) and (b):

It shall be unlawful for any packer with respect to

livestock . . . to:

(a) Engage in or use any unfair, unjustly discriminatory,

or deceptive practice or device; or

(b) Make or give any undue or unreasonable preference or

advantage to any particular person or locality in any

respect, or subject any particular person or locality to any

undue or unreasonable prejudice or disadvantage in any

respect.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the law. But this law is not being enforced. So what we are left with are unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced and the cost of enforcing the law on a case-by-case basis in the courts is expensive and time-consuming, today I propose that the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays the sign any attention unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying attention to because the police are busy doing something else. The bill I am introducing today is not just another sign on the road. It is a speed bump. It does not just warn cars to go slower, it makes it much more difficult for them to speed.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong.

Under this bill, forward contracts and marketing agreements must contain a fixed, base price on the day the contract is signed. This prevents packers from manipulating the base price

after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality, grade or other factors outside packer control. It prevents packers from changing the base price based on factors that they do control. Contracts that are based on the futures market are also exempted from the bill's requirements.

In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. Whether they take the opportunity to bid or not is their choice, the key here is that they have access to do so.

My bill also limits the size of contracts to the rough equivalent of a load of livestock, meaning 40 cattle or 30 swine. It does not limit the number of contracts that can be offered by an individual. This key portion prevents small and medium-sized livestock producers, like those found in Wyoming, from being shut out of deals that contain thousands of livestock per contract.

Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation and undue preferences. These are not the only benefits of my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market, where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium-sized ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business.

My bill removes one of the largest obstructions preventing livestock producers from competing--formula-priced contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field.

I yield the floor.

Mr. President, I understand we are speaking as in morning business.

I ask unanimous consent to be able to proceed as if in morning business.

Mr. President, the health of the American economy has been deteriorating for more than 2 years and the patient's vital signs are getting steadily worse.

President Bush's response has been to prescribe sugar pills--tax cuts for the wealthy that may taste good for a moment but do nothing to cure the patient's illness. Like a quack doctor who knows only one remedy, while the patient keeps getting worse despite the treatment, the President just keeps prescribing larger and larger doses of sugar pills. The Bush administration's policies will never revive this sick economy.

I am deeply concerned about the continued stagnation of the economy. Unemployment is still on the rise. We climbed to 6 percent in April. There are now 8.8 million men and women unemployed across the Nation. The economy has lost more than a half million jobs in just the past 3 months, and there is no end in sight. In the absence of an effective stimulus from the Federal Government, the economy is not likely to improve quickly.

Behind such disturbing statistics are people who need our help. A strong economy allows working men and women to have greater control over their lives and more opportunity to pursue their personal dreams. A stagnant economy takes much of that control out of their hands, leaving families vulnerable to circumstances they cannot control.

Across America in the last 2 years, workers have lost their job security. As layoffs mount, they live in fear of being the next to be let go. There are 2.7 million fewer private sector jobs in America today than there were in January of 2001. Those looking for a job are finding it increasingly difficult to obtain one. The number of long- term unemployed has tripled.

The pain caused by this destructive wave of economic stagnation is not limited to those who have lost their jobs. Health insurance is becoming less and less affordable for workers and their families across the country. The Congressional Budget Office now estimates that over the course of a year, 60 million Americans go without health insurance. One in ten small businesses which offered their employees health insurance in 2000, no longer do so.

Nationally, the average cost of health insurance is rising at double digit rates, up by 11 percent in 2001, and another 12.7 percent in 2002 nearly 4 times the rate of inflation. The health care squeeze on working families is getting tighter and tighter.

Senior citizens who desperately need prescription drug coverage are suffering, too. While their incomes are stagnating because of low Social Security cost-of-living adjustments, the cost of prescription drugs is escalating at double digit rates, increasing an average of 16 percent each year. Children who are being asked to do more in school are receiving less support. School districts faced with declining tax receipts have increased class sizes, cut weeks from school calendars, and laid off teachers. Our economy's inability to support public education is setting up America's children to fail in the global marketplace.

There is a crisis in public higher education as well that has been created by a weak economy. States are being forced to sharply cut aid to public colleges. State and community colleges in turn have increased tuition to an unprecedented rate to cope with State budget cuts.

Nationally, the gap between the cost of college tuition and the tuition assistance provided by the Federal Government has grown by $1,900 in the last 2 years.

Millions of families have seen their retirement savings seriously eroded. The value of savings in 401(k) plans and other defined contribution plans has declined by $473 billion in the last 2 years.

These are the realities American families face today.

It is imperative that the National Government respond to the growing economic crisis. There is much the Government can do to stimulate economic growth in the near term without generating huge deficits that will undermine prosperity in the long term. Unfortunately, the Bush administration has consistently refused to follow such a course of action.

Historically, Republicans and Democrats have had fundamentally different views on how to strengthen the economy. Republicans believe if you give tax breaks to the wealthiest taxpayers, they will invest more and the economy will grow. It is called trickle-down economics. The problem with this theory is the wealthy may not immediately use the money to create jobs and expand production. If there is no demand because consumers are not buying, companies will not produce more. They will just wait until the economic climate improves.

Democrats believe that tax relief and public resources should go to America's working families. They are the ones who are struggling most in this brutal economy, and they will quickly spend the money. They will create the demand which is needed to get the economy moving again.

It is an old debate. We have very different approaches to stimulating the economy. Republicans keep making the same mistake. If trickle-down economics worked, the economy would not

be stagnating today. In 2001, at President Bush's insistence, Congress passed one of the largest tax cuts in history, and wealthy taxpayers got the lion's share of the tax benefits. America has lost more than 2.5 million jobs since the first Bush tax cut passed. The Republican response is more of the same. But the American people want a new approach.

The President has repeatedly rejected the pragmatic advice of mainstream economists and opted instead for an ideologically rigid and ineffective strategy. His single-minded commitment to ever larger tax cuts for the wealthy as the cure to every economic ailment has made a bad situation worse. The administration has ignored remedies that would provide a significant stimulus this year, while implementing policies that will undermine our future economic strength. As a result, the economy continues to stagnate, and the number of families facing hardships continue to grow. The budget presented to Congress by President Bush this year calls for over $1.6 trillion in new tax cuts, in addition to the massive tax cuts already enacted in 2001. According to the Congressional Budget Office, if the President's budget is accepted, the on-budget deficit will grow to $4 trillion by 2013. More than three-quarters of that amount would be directly attributable to the Bush tax cuts. A deficit that large would make it impossible for the Federal Government to meet its most basic obligations to the American people in national security, in health care, in education, and in retirement security.

While imposing this enormous long-term burden on the economy, the President's economic growth plan would not even provide the immediate stimulus the economy needs. The economy needs a real stimulus plan. A genuine economic stimulus must meet three criteria. It must have an immediate impact. It must be temporary. And it must be fair in bringing the recovery to all Americans and not just the wealthy few.

The Bush proposal fails on all three counts. Only $40 billion of the $726 billion cost of the administration's plan would reach the economy in 2003, when it is needed to stimulate growth. Most of the revenue will be spent long after the recession has ended. Eighty percent of that total amount would not be spent until 2005 or later. What we need is just the reverse. We need to put much more money into the economy in 2003 and keep the long-term costs low. Temporary tax cuts to stimulate the economy are affordable, but the President's large, permanent, new tax cuts are not.

The Republican plan will not provide the timely and targeted stimulus that the economy needs.

Under the President's so-called economic growth package, households with annual incomes over $1 million would receive an average tax cut of $90,000 each year. They are not the ones who are struggling to make ends meet in this faltering economy. They are not the ones who need our help. Nor are they the ones who will quickly spend the money they receive.

In contrast to this windfall for the richest taxpayers, households in the middle of the income spectrum would receive an average of less than $300 per year in tax benefits.

The Bush plan is simply not an effective stimulus. A recent analysis of the administration's economic growth plan by a respected independent financial research firm, Economy.Com, determined that elimination of the income tax on corporate dividends, the centerpiece of the President's plan, is one of the least effective forms of stimulus, generating less than a dime of stimulus for every dollar of Federal revenue lost. By comparison, extending unemployment benefits and providing aid to State and local governments would produce substantially more than a dollar of stimulus for every dollar of Federal revenue spent.

The plans announced by House and Senate Republicans in the past few days both contain the same fundamental flaws as the Bush plan. They put far too little money in the economy this year and cost far too much in the long term. Only $60 billion of the House's $550 billion tax cut would go into the economy this year, and even less, just $33 billion of the Senate's $420 billion tax cut, would reach the economy in 2003, when it is needed to create jobs.

The Senate Republican bill reported out of the Finance Committee last week would give taxpayers who earn more than $1 million a year an average annual tax cut of $64,400, while middle-income taxpayers would only receive an average tax cut of $233. Sixty percent of all the tax benefits in the legislation would go to the wealthiest 10 percent of taxpayers.

This chart I have in the Chamber reflects that. This chart is the result of an analysis by the Urban-Brookings Tax Policy Center. The average tax cut for middle-income families is $233 a year, and for the millionaires, $64,400 a year.

While the Senate Republican bill is not as extreme as the Bush administration proposal, it still fails the test of an effective and immediate stimulus. It does not maximize the economic impact in 2003. We can create many more jobs much sooner by better targeting the resources provided in the legislation. Senate Republicans are still proposing to spend $80 billion on a permanent dividend tax cut and $35 billion on lowering the tax rate on the highest incomes. These cuts, which constitute one-third of the entire cost of the bill, do not provide the needed effective stimulus, and they take resources away from proposals that would.

It is incredible that Republicans could not find the dollars to extend unemployment benefits and to provide tax relief for low-income workers but they could find the money to pay for these tax breaks benefitting the wealthiest taxpayers. These priorities are all wrong for America.

Let me just point out that in their Republican tax proposal, there are virtually no provisions for unemployment compensation for American workers--either the almost 3 million American workers who have lost their jobs over the period of the last 2 years or those who have already seen their unemployment compensation expire because of the downturn in the economy, let alone the hundreds of thousands of part- time workers and low-income workers, who are primarily women. There is no proposal whatsoever in the Republican tax proposal to have an extension of unemployment compensation in spite of the fact that the unemployment compensation fund is in heavy surplus. At this time, it is well able to afford it.

A well-designed stimulus plan could generate far more economic activity at a small fraction of the cost of the Republican proposals. The Senate Democratic plan would inject $125 billion into the economy this year and is designed to maximize the stimulus effect of each dollar. There is twice as much stimulus effect in 2003 as the House Republican plan and three times as much as the administration's plan and the Senate Republican plan.

Three widely respected economic models all show that the Democratic plan would generate substantially more growth in 2003 and create a half million more jobs this year than the Republican plan.

In the Democratic plan, half of the total amount would be used to provide immediate tax relief to working families. It would provide tax relief to all those who pay either income tax or payroll tax and would provide additional tax cuts to families with children. The tax cuts are directed to hard-working families who need them most and are most likely to spend the dollars quickly.

The current installment of Federal unemployment benefits runs out at the end of this month, and the Democratic plan would extend those benefits.

An effective stimulus plan also needs to provide immediate, targeted tax relief for businesses to stimulate new investment. Accelerating depreciation to 50 percent for this year and tripling the amount small businesses can expense this year makes sense. The goal is to provide businesses with strong tax incentives to invest in new plants and equipment now, rather than postponing those expenditures until future years.

To be credible, a stimulus plan must recognize the dire fiscal problems that State and local governments across America are facing. The current fiscal crisis in the States is the most severe in decades. Collectively, States are facing budget deficits of nearly $100 billion and making up for it by cutting education programs.

Last Congress we passed a good bill, a bipartisan bill, in the No Child Left

Behind Act, in order to ensure we had smaller classrooms, better trained teachers, improved curricula, and after school services. We had a whole range of commitments: improving literacy, and putting additional kinds of expectations on schools to perform. We did all of that.

But we have found now that the administration has backed out of that commitment at the same time we are finding the States are backing out. We have a golden opportunity to strengthen and enhance K through 12 education, but we are undermining that possibility with the cuts that are taking place at the State level as a result of the first Bush tax cut. And we know that this new tax request by this administration will permanently undermine our ability to fund these programs into the future.

It is important to remember that more people need to rely on State and local programs in an economic downturn. The number of people eligible for Medicaid grows substantially in times of recession, and many other costs rise as well. Without jobs and without health care, families have nowhere else to turn. They don't have the health insurance, so they have to go to the neighborhood health centers. Who do we think picks up the cost in terms of the neighborhood health centers? It is the local communities that are going to be required to do this. We should make certain that the needed resources are available for them.

Our stimulus plan would provide at least $40 billion to hard-pressed States and communities. It would provide additional dollars to maintain health care, education, and social services. It would also help with the substantial costs of dealing with the threat of terrorism. It is money well spent which will help stimulate the economy now. Unfortunately, the President's plan completely ignores this need.

We had the hearings in our human resources committee not long ago about the dangers associated with the outbreak of SARS and about how local, State, and public health services are so heavily burdened in responding to various kinds of inquiries and tension in local communities on this, and how they are stretched to the breaking point.

SARS is not the result of a terrorist activity, but if it had been or if we should have one now, we know our public health systems are stretched to their limit. And they are our first responders. We also know that the major hospitals now are overstretched because of the reductions in their budgets. They need to be ready to contain any kind of an outbreak of a major terrorist attack that is going to use chemical or biological agents. So we are talking about matters that involve the security of this Nation in terms of terrorism and the potential use of anthrax and other dangerous substances.

The best way to stimulate real economic growth is to make sound investments in our human capital and in our infrastructure.

That is what the Bush administration does not realize. That is the essential element missing from all their economic plans. If we deny the necessary resources now, we are jeopardizing the future well-being of our people. We are also jeopardizing our future prosperity. Today we need an economic growth plan that recognizes the real forces which drive our economy and invests in them. As President Kennedy said 43 years ago, at the time of another Republican recession: It is time to get America moving again.

As debate on the tax bill progresses, I intend to offer amendments to reverse the misguided priorities of the Republican bill. One of my amendments will eliminate the dividend tax cut and the accelerated reduction in the rate of the top brackets in order to provide the necessary funding for a Medicare prescription drug benefit that will effectively meet the needs of the elderly. The people's representatives will have a chance to say what is more important for the American people, a tax cut for the wealthy or a solid prescription drug program which was effectively left out of the Medicare program when we passed Medicare in 1965. We got the hospitalization. We got the physician services. But we left out prescription drugs. We made a commitment to American seniors: Work hard and your health care needs are taken care of. We didn't say they would be taken care of with the exception of prescription drugs, but that is exactly what has happened. Every day that we have Medicare without prescription drugs, it is a violation of that commitment.

We will have an opportunity tomorrow to make a decision whether we are going to as a nation place the funding of a good prescription drug program ahead of providing additional kinds of tax reductions for the wealthiest individuals in this country. It is an issue of choice. It is an issue of priorities. The Members of the Senate will be able to make that judgment and decision. One will take place; the other will not. Which way will the Senate go?

Too many of our elderly citizens choose between food on the table and the medicine their doctors prescribe. Too many elderly are taking half the drugs their doctors prescribe or none at all because they cannot afford them. The Republican budget shortchanges senior citizens who desperately need prescription drug coverage. Prescription drug spending for senior citizens will cost $1.8 trillion over the next decade, but the Republican budget allocates only $400 billion additional dollars for Medicare. This $400 billion is not even reserved just to pay for prescription drug coverage. The additional $115 billion my amendment provides will help us to enact a real drug benefit without coverage gaps and high deductibles and will meet the needs of all seniors. It is a statement by the Senate that mending the broken promise of Medicare and providing seniors with the lifesaving prescription drugs they need is far more important than additional tax breaks for millionaires.

The Republican budget also seriously underfunds education. I am planning to offer an amendment that would reduce the size of the tax cut and use the funds to make real the promise of No Child Left Behind.

We made a commitment to parents and children, with No Child Left Behind, that we were going to guarantee a well-qualified teacher in every classroom. We made a commitment that they would be in smaller classes. We made a commitment that parents would be informed as to the progress those children were making and the school was either making or not making. We made a commitment that we would hold schools accountable, and if the schools were not going to perform, they would be altered or changed. And if they still were not performing effectively, they would be completely reorganized. We made that commitment to parents. We made that commitment to the American people.

But we also made a commitment to the American people that we were going to do our share by providing the resources to get that done. We have failed them.

My amendment will also address the needs of college students caught up in the widening financial gulf between tuition assistance and the cost of higher education.

We make choices in the Senate. We are going to give the Members of the Senate the opportunity to make a choice about which is more important: Investing in our youngest children, and those children who are continuing their education into college as well who today are in many instances spending their time during the breaks, rather than talking about their books or the courses they are taking in school, are talking about when their next job will be and how much they will get paid and how much their student loan is going to take out of that. We know so many of the most talented and most gifted students come from hard-working, middle-income families and they turn down the opportunity to go on to school and college because they do not want to assume that debt or assume the debt for their families.

We are going to provide an opportunity for the Senate of the United States to make a choice. Do you want to provide more tax breaks for the wealthiest or do you want to invest in schools? They will have that chance tomorrow.

Unemployment benefits expire 2 weeks from now. My third amendment will extend the current program for 6 months and help the 1.1 million Americans who are long-term unemployed, and the hundreds of thousands of part-time, low-wage workers. These are men and women who have worked hard and paid into the fund. If they haven't paid

into the fund, they are not eligible. Make no mistake. These are men and women who, through no fault of their own, because of the downturn in the economy, are thrown out of work. They are able to collect some unemployment compensation. But then after a period of time, that compensation expires.

Historically, in a nonpartisan way, Republicans and Democrats together have said: We will provide a helping hand to you until we get the economy back. And then, when they are on their own feet, they repay back into that fund. That is the way it has worked historically. But not under this Republican proposal. There isn't 5 cents in here, not one nickel for these fellow Americans who are trying to pay a mortgage, educate their children, and put food on the table. We will have a chance tomorrow to vote on this issue and to find out the decision of the Members.

The debate will only last for 2 days because of the rules of the Senate. We are limited to 25 hours under the process that was accepted a number of years ago, with which I have great difficulty when we have a situation such as this.

We know that national economic policy has a most dramatic and important impact in terms of the national economic well-being and welfare. In the early 1960s, sound fiscal policy led to a long period of economic growth and price stability. We did see a reduction in taxes under President Kennedy at that time, when taxes were up to 90 percent of income. Imagine that. They went down to 70 percent.

The distribution in that tax bill, which eventually was signed into law in 1964, was for middle income and low income working families, and over $3 billion went to reduce and close tax loopholes. We don't have that now. There are some provisions in here that raise the taxes on Americans who are working overseas. But I wish we had a committee that would review the tax expenditures the same way that we review the expenditures in terms of spending.

We hear a great deal about reduced spending, and there are areas where it should be reduced. But what we don't see is any call for reducing the tax expenditures that have been building up over years and years and benefit just the few, the privileged, in the Tax Code. They have been growing and growing and growing.

Make no mistake about it, the working families make that up every time we see another tax loophole created. If we are going to get back to a balanced budget, somebody has to fill it in, and it turns out to be the working families who are the ones filling that in. That is wrong.

When we saw a strong tax program in the early 1960s, we saw, as a result, economic growth and price stability. It continued for a number of years until we found additional expenditures as a result of the Vietnam war. Then we saw the same thing as the result of President Clinton's economic program in 1993. After that we had the longest period of economic growth and price stability in this country in years, with the creation of millions of jobs as a result of the economic policy decided on the floor of the Senate.

We are going to be debating how to recreate this success this week in the Senate. I believe that is the most important question that will be decided by this Congress this year--outside of the particular assurance of our own national security and defense and the battle against terror.

The challenge the American people should give to us is to make sure, one, that the economic policy is going to be fair and, two, it is going to be a stimulus to the economy and, three, it is going to be temporary. If we do that, whatever the program, Democrat or Republican, we will have met our responsibilities.

We should put an emphasis on meeting the Nation's priorities with respect to education, health care and unemployment insurance.

America should be watching this debate and paying close attention because the decisions that are going to be made in the next 36 hours will have a profound impact on our economy and what kind of country we are going to be over the period of these next several years.

I suggest the absence of a quorum.

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, for the remainder of this week we are going to be discussing some very important fiscal policy issues dealing with increasing Federal debt limits and proposals to reduce taxes in our country. We will have a substantial amount of debate about both of those issues. Both of them relate to the question of whether our country's economy is growing or whether it is stagnant, whether it is producing jobs or losing jobs. I want to talk just a bit about that.

In the last couple of weeks, we have heard all of the discussions about our country having lost some 2 million jobs over the last 2\1/2\ years. In fact, in the last week or so even Michael Jordan got laid off. It tells you a little something about the state of our economy, I guess.

Some while ago, I was reading about an opening for the Oscar Mayer Wienermobile driving position. They had an opening for a driver for the Oscar Mayer Wienermobile. Most people remember what that is because they have seen it in parades or on television. So they posted this in the newspaper: We have an opening for a driver for the Oscar Mayer Wienermobile. Eight hundred college graduates applied to be the driver for the Wienermobile. That also says a little something about the state of our economy and the state of jobs.

As we discuss these issues of jobs and economic expansion, I think the first place to start is with this understanding: Both political parties in the Senate want the same thing for our country. We want an economy that expands, that provides opportunity and jobs and growth and hope for the American people. That is what we all want. There is no disagreement about the goal here. The question is, What is the menu of policies we can implement in the Congress that might help achieve this goal?

I recall, going back 10 years to the year 1993, when our economy was at that point stagnant, in deep trouble. We had the largest deficits in this country's history at that point.

President Clinton came to office, and he said: I want to put this economy of ours on a different track. I want to change some policies. And they were controversial. They passed the Senate by one vote, and passed the House by one vote, were signed into law by the President, and put this country on a different track altogether. They were not easy to vote for. I voted for them. But the easiest vote was simply to say no.

In the 1990s--as a result of fiscal policy that the American people, that Wall Street, that Main Street, that the

bond market could look at and say: This is a sound policy. It puts the country on the right track. It gets rid of these Federal budget deficits. It makes tough choices--but people had confidence, and that confidence was manifested by doing the things you might not otherwise do.

If you are confident about your job, about your family, about the future, about your security, then you buy a home, buy a car, take a trip, make a purchase, and do the kinds of things that manifest that confidence you have in the future for yourself and your family and your country. And that is the expansion side of the American economy.

In the 1990s, this economy grew and grew and grew. Millions and millions of new jobs were created in the private sector in this economy. But things have changed. We have run into some tough sledding these days. Let me describe some of the circumstances that occurred.

We began to run into an economic slowdown which then became a recession. On top of that recession, we had the terrorist attack in this country on 9/11. We had the bursting of the technology bubble and the pancaking of values in the stock market. We had the largest corporate scandals in American history. Companies such as Enron, Arthur Andersen, Tyco, and others were splashed across the front pages of America's newspapers. We saw some of America's best known executives led away in handcuffs. And we had a range of other circumstances that caused great uncertainty in this country.

As a result, instead of gaining jobs, in the last couple of years we have lost jobs. At the start of this period, President Bush was elected and came to town and said: My policy is, I want a $1.7 trillion tax cut over 10 years. And the reason I want that tax cut, he said, is because I can see surpluses as far as the eye can see. This money belongs to the American people, and we ought to give it back. If we are going to have surpluses for 10 years, let's put in place permanent, deep tax cuts for 10 years.

Some of us said: Well, we support tax cuts, but perhaps we ought to be a bit conservative. What if something happens? What if we run into some tough times? What if we find some white water on these economic waters of ours? What if we find some difficult circumstances?

No, never mind about that, they said. This is about tax cuts right now that are permanent. And they won--by one vote. And the result is long-term, permanent tax cuts. Very shortly thereafter we discovered that we had a recession, and then the terrorist attack, then the war on terrorism, and corporate scandals. And guess what happened. Very quickly, those long-term, big-budget surpluses turned into large projected Federal budget deficits as far as the eye can see.

So things have changed dramatically. What do we do about that? The American people are concerned about the future. They lack the confidence that is necessary to provide a boost for the expansionary phase of the economy. What do we do about that? The President says: I have a recipe. My menu is, let's cut taxes once again.

Let me describe in economic terms where we find ourselves. In fiscal policy, we have this year a budget deficit of over $1 billion a day that we spend more than we take in--over $1 billion a day. That is our deficit, every day, 7 days a week, 365 days in the coming year. It is pretty hard to be more stimulative to the economy than that. You talk about Keynesian; that is Keynesian economics. Those are very large deficits. How can you be more stimulative than that to the economy? That is a huge fiscal policy stimulus.

Monetary policy: The Federal Reserve Board has driven short-term interest rates down about as far as they can go, a percent and a quarter. It is hard to see a monetary policy that is more stimulative than that.

So we have policies in place, both monetary and fiscal policies, that are stimulative. Yet our economy is barely moving. It is not producing new jobs; it is losing jobs. So what do we do about that? The President says: Let's cut taxes again.

What the President has said is that he wants to cut taxes at this moment. I want to show the consequences of that. On page 4 of the Budget Act, the concurrent resolution passed by both the House and the Senate, it says: Debt subject to limit. This is the Federal debt. It says, in fiscal year 2003, it will be $6.7 trillion.

The President says: If I get all that I want from you, Members of Congress, I propose we grow the Federal debt from just over $6 trillion to $12 trillion.

What he is saying is: Adopt my plan and double the Federal debt in 10 years.

I don't know, I come from a really small town, but that doesn't seem to me like it is moving forward. It seems to me like this is losing ground. We have lost 2 million jobs. We are proposing to double the Federal debt in the next 10 years. I just don't understand how this inspires confidence in the American people that we somehow have our fiscal house in order.

I don't understand where conservatives are hiding. I thought being a conservative was to say: Let's be a bit conservative in the way we deal with this. Let's make sure we will have a sound dollar in the future. Let's make sure we have our fundamentals right. Let's make sure we are moving towards some balance in the budget. And let's make sure we are investing in things that produce big dividends for the people.

Let me say what the President has talked about. He says his dividend for the American people is to cut taxes. That all sounds good. The easiest lifting in American politics by far is for any politician to say: My proposal is to cut taxes.

I guarantee you, that makes you popular.

How about the alternative that says: My proposal is to double the Federal debt? The President is not going to say that, but that is what he is proposing. He won't get on Air Force One and go to Indianapolis to say: I have a great proposal for the people; I propose we double the Federal debt to $12 trillion.

I would just like to hear it once because here it is. It is in black and white. It is not me saying it. It is the President proposing it here on this document. That is the end result of this fiscal policy. Will that inspire confidence about the future? It will not.

So we will have a debate this week on these proposals, and these proposals will be to increase the Federal debt limit by nearly $1 trillion. Let's make sure we understand that. It is actually just $984 billion. It is hard to keep billions and trillions separate in the Congress some days. They have constructed this debt ceiling increase so that it is just under $1 trillion.

So let's understand what this means. We will vote this week to increase the debt ceiling by nearly $1 trillion. I want to tell you how many times we will do that again in order to meet what the President proposes to happen with this fiscal policy. We will increase it $1 trillion now, $1 trillion later, $1 trillion after that, another $1 trillion later, another $1 trillion, and finally another $1 trillion. Those debt ceiling increases will all be necessary in order to meet the President's objective with a fiscal policy that results in doubling the Federal debt from $6 trillion to $12 trillion.

Is that putting this country on track? Is that making tough choices? In McCullough's book I have mentioned previously, John Adams writes to Abigail frequently, as he is serving his country in France and England. He writes to Abigail plaintively asking, in different words: Where is the leadership going to come from? Where on Earth, he asks 200 years ago, will the leadership come from to help create this new country of ours? Who will provide it?

He laments: There is only us. There is myself, George Washington, Ben Franklin, Mason, Madison, Thomas Jefferson. There is only us.

Of course, we understand now, with the hindsight of two centuries, we had some of the greatest talent in human history thinking through how to put this country of ours together. But it seems to me that it is important to constantly ask the question: Where is the leadership going to come from?--in this case on fiscal policy.

We have good people on all sides of the political aisle. The President is a good person. Members of the Senate, Republican and Democrat, come here because they have a passion in their heart to want to do good things for the country. They all share the same goal. They want this country to expand and provide opportunity and jobs and prosperity.

The fact is, they have different visions about how to approach the goal. Some believe this economic engine runs because you put something in at the top and somehow it trickles down; that which is put in at the top one day will benefit everyone. There are others who believe you give everyone a little something to work with, jobs, especially for working people, and things percolate up, and this engine runs best that way. We have had plenty of opportunities to test those theories.

Let me submit that the test in recent years has been quite clear: Put your economic house in order. Give people some confidence that you are making tough choices, that you will carve out a future for their children and grandchildren that is one we can be proud of, and have them inherit a growing economy rather than be saddled with the burden of debt. If we do that, it is quite clear that people will do what is necessary to expand this economy. If we don't, the economy languishes and contracts.

I will offer some amendments to the tax bill. I don't intend to vote for a large permanent tax cut on top of what we did in 2001. I don't intend to vote for it because every single dollar that is used for this tax cut--most of which will go to upper income people--is going to come from the Social Security trust funds. Let me use Donald Trump's name because he doesn't mind. Donald Trump puts his name on everything, and I am sure he doesn't mind. He is a very successful American businessman. Assume that a successful American businessman makes $1 million a year in net income. My assumption is that Donald Trump does much better than that. But assume he made $1 million a year in income. Under the President's plan, he will get a $90,000-a-year tax cut. Now, I have just described to you that this process is going to double the Federal debt. You know and I know and everyone in the Chamber knows it is going to make it much more difficult to fund Medicare and Social Security. This plan is going to use the trust funds that we were supposed to save for Social Security. My Aunt Blanche is dependent upon Social Security. And Aunt Blanche is not going to like it when she discovers that Congress has decided to use the trust fund surpluses to provide a tax cut to people at the top of the income ladder. That is just not something she and many other senior citizens want to have happen in this country. It is not something they expect the Congress or the Government to do; yet, we are just hours away from making that mistake.

Let me try to describe a couple of amendments I am going to offer as we go through this process. There is a $323 million expenditure included in the large tax cut legislation that will be coming to us from the Senate Finance Committee that is interesting and troubling to me as well. Do you know what it is for? It is to have the IRS go out and hire private collection companies to collect Federal tax bills. I will say that again. In this bill is $323 million, I believe, to have the Internal Revenue Service go out and hire private collection agencies to collect taxes. That is quite a departure. We spend a lot of money on the IRS. They want to hire--the Finance Committee and those in Congress who support this--private collection agencies.

Let me give you an example of what happened. They did a pilot project of this in 1996, a test. I didn't support it then and I don't support it now. I will offer an amendment to strike this. They did a little test in which they hired private collection agencies to collect tax debt. The test was a failure. Among other things, an IRS internal audit found some collectors violated their contracts with the IRS by placing telephone calls outside the time frames specified by the Fair Debt Collection Practices Act. In this little test, there were 294 calls placed before 8 a.m., or after 9 p.m. The earliest call was received at 4:19 a.m. How would you like to get a call from a debt collection agency at 4:19 in the morning about a tax bill?

I don't support that at all. The IRS ought to collect their own receivables. They ought not turn them over to private collection agencies. This is, after all, the most sensitive of people's financial information. That test also discovered problems with the safeguarding of that information. I am going to offer an amendment that will strike that provision. I don't know whether it will prevail, but it is a terrible idea to suggest we ought to spend hundreds of millions of dollars turning some of the Internal Revenue Service collection rolls over to private collection agencies.

I will, with my colleague, Senator Reid, offer an amendment dealing with the issue of concurrent receipt for retired military personnel. At the moment, as most in this Chamber know, if somebody served our country for 20 years in the armed services and they were disabled during that period, they cannot receive both their full military retirement pension as well as veterans' disability compensation. That is outrageous and that ought to be changed. Of all the things to do to disabled veterans, this makes no sense at all. We tried to fix this last year and the President blocked it by threatening to veto the Defense Authorization bill. I hope to offer an amendment with Senator Reid to solve this problem..

I also intend to offer an amendment that will provide a trigger, and perhaps some other colleagues will. If they do, I will probably not offer this. But there needs to be an amendment that decides that we will have these tax cuts, provided we have the capability to offer them. If the on-budget deficit exceeds a certain amount, or the Secretary of the Treasury cannot certify that it such deficit doesn't exceed a certain amount, two things would happen: One, we would freeze some of the tax cuts and, two, we would identify the spending in Federal agencies that represents overhead burden and cut that spending by 5 percent at the same time. So you have a combination of both delaying a tax cut and also cutting some Federal spending.

I believe also the income tax increase on Social Security benefits that occurred in 1993 should be repealed. It seems to me the question is, what has more priority, dividend exclusion for those at the upper income level, or dealing with this Social Security tax increase? I will submit an amendment to repeal the 1993 income tax increase on Social Security payments. These and other things, I think, represent a number of approaches we ought to take.

Also, this week when we deal with the increase in the debt limit, we are going to increase that by nearly $1 trillion--but not with my vote, because I didn't vote for the fiscal policy that creates this. But for those who support it, have at it. You really ought to vote for this increased debt limit.

I am going to also propose an trade deficit amendment. The structure is not complete, but I will make this point. We have a debt limit with respect to fiscal policy in this country. When you reach that limit, bump up against it, you either have to extend it, or cut back in certain areas, or freeze spending. The fact is, there is no similar limit with respect to the trade debt.

The trade deficit on an annual basis is $470 billion at the moment and growing rapidly. It is Katie bar the door, whatever it is, it is; nobody has to approve it, nobody has to do anything about it. The President and the trade ambassador and the Congress can sleep through it and never utter a sentence, knowing that all their newspaper friends--the major daily newspapers, friends of the Republicans and Democrats who support this trade policy--will never say a critical word about the trade deficit threatening to undermine this country's economy as well. I will offer an amendment that deals with that.

I will finish by saying this. What most American families want from their Government is pretty simple. It is what they sit around the supper table and talk about. There are very simple questions they ask each other. The questions are: Do I have a decent job? Does my job pay well? Do I have job security? Do I have decent benefits on my job? Are we sending our kids to schools we are proud of? Do we live in a safe neighborhood? Do Grandpa and Grandma have access to good health care when they reach their limited income years? Are we treating our two uncles who served this country in the Second World War fairly on veterans' health care? All of these are issues families ask about every day. It is what matters to them. It is what makes a difference in their lives.

The answers to these questions, in many cases, are what has made this a

great country. Just go around the globe and you will see the same green places where there are trees and grass, and you will see the same ground where there is sand and you will see a world that looks pretty much the same. But there is one spot that is dramatically different, and that is this great country of ours. We are lucky to be Americans and lucky to be alive now. We have inherited an obligation for us not to just think about today, but to think about our kids and about tomorrow. The one thing that has made this country, I think, really a remarkable, unique country is that we decided two centuries ago that every child in the country shall be able to become whatever their God- given talents allow them to become. We are not going to separate kids in the education process and say you are going to go to this school, or you will go to trade school and you will go to college. We don't do that. We say every kid who enters a classroom has the opportunity to be whatever their God-given talent allows. It is a wonderful thing. This notion of universal education is a wonderful thing for our country.

I told this story before. I will do it again. When I came to Congress, the oldest member was Claude Pepper from the State of Florida. He had, behind his desk, above his chair, two pictures I have never forgotten that were autographed to him. One picture was of Orville and Wilbur Wright making the first airplane flight. It was autographed to Congressman Claude Pepper with admiration from Orville Wright. Before he died, he apparently autographed a picture for Claude Pepper. And Claude Pepper had an autographed picture of Neil Armstrong setting foot on the Moon. One human being in a picture of the first person to fly and leave the Earth, and the first person to walk on the Moon.

What is the difference between those two autographed pictures in one person's lifetime? The distance is education--the science, the math, and the learning that allows us as a country to produce men and women who learned to fly and then take off and fly to the Moon. That is how important education is. It is about progress in this country.

The question for us, it seems to me, as we consider this issue of fiscal policy and tax cuts, is about choices. What is it in the choices we make in public policy in America that strengthens our country? What produces dividends, growth, opportunity, and hope in our country? What makes our country unique?

Those are the choices we have to make, and part of that, in my judgment, has always been we have been willing to choose the kinds of things that give people an opportunity. Education is about opportunity. Education, health care--one can think of a whole series of these policies that we have over many years said: Let's set these policies in place to give people opportunity.

The policies we see today coming from the Finance Committee and from the White House are to say the choice for us in every circumstance, whether it is tax cuts versus Medicare for the elderly, tax cuts versus Social Security, tax cuts versus education, tax cuts versus veterans' health care, you name it, the choice for us is tax cuts.

I know there are some in this country who say that is a pretty logical choice because, frankly, we pay too much in taxes. The fact is, with these tax cuts, we will inherit a deficit that will burden our children and their children.

The President often says: This is your money; people should be able to keep more of their money. That is certainly true. It is also the case that this is your debt, and when this $6 trillion debt turns to a $12 trillion debt, the question is, Isn't this debt something with which we are saddling America's children and grandchildren, and is that sound public policy? Is that the seedbed for economic growth? Does that produce and inspire confidence in the American people about the future of this economy?

The answer clearly is no. That is why my hope would be, in the coming days at least, that we could find some common ground. Perhaps there is an appetite for tax cuts that says we have to do this unabated under any circumstance, but there is perhaps another appetite by people who say: Let's do a series of things. Let's together both deal with Federal spending and Federal taxes and also the choices of investment in education, health care, and other issues. Let's do it in a way that represents sound thinking, sober thinking; in a way that gives people confidence and inspires them that we are going to have a better future.

I do not know how this is going to come out this week. I worry a great deal that we have a viewpoint that has been expressed that says: There is only one way and that is our way. It is tax cuts, tax cuts, tax cuts. You have big surpluses, then tax cuts. Big deficits, tax cuts. The economy is doing well, tax cuts. The economy is in the tank, tax cuts.

It seems to me that for every politician who ever has run for public office, the instinctive reaction to understanding how to be popular is to propose tax cuts. The American people, in my judgment, deserve better than that. They deserve an answer to the question John Adams kept asking: Where is the leadership going to come from to make tough choices; choices that may not be so popular, not so attractive in the short run but, in the long run, will produce opportunity, economic growth, and new jobs?

Those sometimes are choices that we are required to make in public service. I think this is one of those times.

Madam President, I yield the floor and suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, this past weekend my wife and I met up with some life-long friends from my home area of East Saint Louis, IL. We had a good time together. We sat around and talked about our lives and some of the challenges we face.

My friends own a small business. It is a trucking company with about six or eight employees, and about the same number of trucks. It has been in their family for decades. They are very proud of it. They put their life work into it. We talk about business every time I see them. This time the conversation was not so much about business; it was about an issue which was clearly on their minds, and I believe the minds of small and large businessmen across America. The issue was health insurance.

Something they had taken for granted for so many years has now become a challenge not only to their business but to their personal lives. A few years ago, one of their employees' wives had a baby with some serious medical problems. As a result of that, when the health insurance for their small company came up for renewal the next year, they saw their premiums double.

This small company struggling to get by was faced with an impossible burden, how to continue to provide health insurance for the families and the workers in their employ at costs that were now out of reach. They tried for a year. When the rates continued to go up, in desperation they made a desperate decision. They called their employees in and said: We can no longer offer health insurance to you as an employee of this company. We will give you the amount of money we were paying monthly as a premium as an increase in your pay, but you have to go out in the open market and find health insurance.

The sad reality is one of the families, the one with the sick child, could not find health insurance, and still has not. The others found it with costs going up every year. But that was not the end of the story. They went on to tell me the insurance they now have to buy in the open market is almost worthless. If they should ever turn in a claim during the course of the year for any medical problem, they can count in the next year that that will be excluded from coverage and protection. If you have a problem with your foot, of any kind, in the next year the health insurance policy offered to you will exclude anything to deal with feet, either one of them, any condition.

The woman told me at this get-together: When I go to get a mammogram now and they ask me who my doctor is, I tell them I do not have one. Send the results to me personally. She said: I try to decide whether or not something serious has been found. I cannot let this get into my medical records because, frankly, I will find an exclusion to coverage if any question is raised.

This was a very startling conversation for me. It was an eye opener. What troubled me the most about this, I do this for a living. I am a Senator, and I am proud of it. I have devoted my life to public service and I hope I have done some good, but when my friends, family members, and businesses across my State all come to me with the same concern over and over again, I cannot explain the feeling of helplessness and frustration I have.

I think about that in the context of the debate in which we are engaged. Of all the debate in the last several years in Washington, DC, of all of the proposals from this administration and from the leaders in this Congress, why is it we can never get close to the issues that really count, the issues that are tearing families and businesses apart? The cost of health insurance is one of those issues. As a nation, is it expensive for us to try to come up with a new approach which says that every American, regardless of their wealth or poverty, will have a basic level of protection of health insurance? That cannot be beyond us.

This is a country and a society which took a look at its impoverished parents and grandparents over 50 years ago and said, we are going to create Social Security. We want these people whom we love to live in dignity. This is the same country and society which in the 1960s took a look at the same parents and grandparents and said, for goodness sakes, they ought to have basic health insurance. If they have retired, we are going to create Medicare. And we did. This is a country which stepped back and said we are no longer going to discriminate against people because of their disabilities or handicaps. We are going to provide them protection, and we did.

Time and time again, we have risen to the challenge. But what do we have before us now? A debate on the floor of the Senate about a tax cut, the range of the cost of this tax cut over a 10-year period, $420 billion to $550 billion, a significant sum of money, on top of a tax cut we just passed 2 years ago.

How will this tax cut benefit my friends who are struggling with the cost of health insurance? How will it benefit families across America who cannot find health insurance and cannot find work? The answer, sadly, is that it is not designed to help them at all.

President Bush comes before us with a tax cut proposal that is a nonstarter. It serves his political philosophy, which is to propose a tax cut whether we are in good times or bad, but it does not serve America and its needs. Our fear of government, our fear of working collectively to solve problems, has driven this Senate and this Congress away from the reality of the challenges of life in America.

We passed a bill called No Child Left Behind. The President said: This is my answer to education in America. And then the President comes back and refuses to fund it. It is an unfunded mandate on the schools of Illinois, Ohio, New Mexico, and Nevada, when these States are facing deficits.

When it comes to health care, this administration has no proposals or suggestions to help the families and businesses struggling to provide health insurance to cover their kids.

When it comes to prescription drugs, there is lip service--nothing that will provide real and meaningful relief from the cost of prescription drugs, particularly for senior citizens and disabled people.

Instead, what are we suggesting? We are discussing a tax cut with the Bush approach, a tax cut that will say to people making over a million dollars in income a year, this elite class will receive about $90,000 more in breaks from the Federal Government.

What is wrong with this picture? I will tell my colleagues what is wrong, from my point of view. It depends on one's outlook on the future of America. If they believe the future of America is driven and controlled by elite investors, the highest-income people in America, then they should sign on quickly to the Bush tax cut. That is what it is designed to do, to provide to those elite investors, those dividend earners, extra benefits so they can have a more comfortable life and perhaps spend their money in ways to help the economy. That is the Bush approach. For most Republicans--not all,

but for most Republicans--that is their approach.

There are others, such as myself, who take a different approach. We believe the future of this country has always been based on hard- working families, those middle income working families which have made this country great. They have played by the rules. They paid their taxes. They have raised their families. They have been conscientious in making certain their schools and neighborhoods are strong and safe.

What do we give them in this tax cut? Not $90,000 a year, like the millionaires in the Bush tax cut, but around $400 or $500 a year. That is not fair and it is not right. It is what we face time and time again when it comes to dealing with the problems across America.

This week, the Senate will consider amendments to this tax bill. Republicans and Democrats will be given choices as to whether they want to cut taxes at the highest levels in the highest brackets or whether they want to provide real tax relief to working families and small businesses across America. The choices will be stark. They will contrast our attitude toward life and our attitude toward America's future.

Is it worth it to reduce the tax cuts of people making over $300,000 a year or give a tax credit to small businesses that offer health insurance to their employees? I would like to take that issue back to Illinois. In fact, I will take it back to any State, and I know what I will hear from small businesspeople and their workers: For goodness sakes, it does not make any sense to give a tax cut to people making over $300,000 a year. Give a helping hand to the families struggling to get by.

Senator Schumer of New York is going to offer his amendment, which goes to the heart of the future of America. It goes to the cost of education.

We now know what happens to young men and women, accepted to the best schools, finally graduate and find themselves deep in debt. Senator Schumer and others and I have joined to offer an amendment that says the cost of college education should be deductible so families wanting to give their kids the best, wanting their kids to achieve the most in their lives, will have a helping hand from this Government.

What makes more sense, a tax break for an individual already successful in America making over $300,000 a year or a tax deduction for a working family whose son or daughter has been accepted to the college of their dreams, the best school possible, who just need a helping hand from this country so they can be all that they can be, achieve greatness?

That is an easy call, too. I will take that home to Illinois, and I invite President Bush to come to Illinois and debate that. Pick the town, Mr. President. Whether he is going to be visiting Nebraska or Indiana, I would like the people in those environs to have the choice the Senate will face this week, choices that are meaningful.

I close on this point. We have lost more jobs under this President than anyone ever imagined. In the Clinton 8 years, 22 million new jobs were created in America. Under the Bush administration, with this recession, we have lost more than 2 million jobs. In fact, we have lost more than 2 million jobs since the President's last tax cut, that failed policy which took more than $1 trillion from the Treasury and did not create jobs in America. It was a failure then and this replacement, even if it is smaller, will fail as well.

Sadly, the unemployed people across America are reaching a level of desperation. They cannot find jobs in this economy with this recession.

My home State of Illinois announced last week an unemployment rate of 6.3 percent. We are in the top four States of unemployment across America.

I met some of the workers while I was back this weekend. One man who was in the communications industry lost his job last December after working more than 30 years. He is desperately looking for a job and does not know which way to turn.

Unemployed people like him across America, victims of this recession, cannot get a helping hand from this Bush administration. The helping hand is extended to the wealthy, to the millionaires, to those with all the dividends who want all the tax breaks, but no helping hand to the poor unemployed family member trying to keep it going.

During President Bush's father's recession in the early 1990s, we extended unemployment benefits five different times; three times under President Bush senior, twice under President Clinton. In this administration, with this terrible recession, we have extended them only twice. Individuals are falling off eligibility. What happens to a person unemployed, no longer eligible for unemployment compensation?

You can count on the following: First, they will find it difficult to pay their utility bills. Second, they will find they have to make real sacrifices on the basis of family, food, clothing. You will find many of them moving in with family and friends. You can count on one of the first items to go being health insurance. They have just enough money not to qualify for Medicaid for the poor but sadly not enough money to provide health insurance for their family.

Over the weekend, my friends talked about health insurance and said, we feel very badly for people who are poor, those who are unemployed, but it is the working families of America who are losing today. This tax break, this $400 to $500 billion tax bill, ignores those families, ignores that reality, and in ignoring that reality, it calls into question whether those who have dedicated our time to public service are really listening to the people we represent.

I hope during the course of this week as we debate this bill and we debate the debt limit, as we get into these important issues, some of my friends on both sides of the aisle will reflect on what they have heard at home from the real working families of America. They need help. The Bush tax program does not help. It is irresponsible. It is unfair. It will not move this economy forward.

I yield the floor.

I ask unanimous consent to speak as in morning business.

Madam President, I rise to talk about the legislation we are scheduled to deal with this week, the debt limit extension bill and the tax cut.

The debate over the debt ceiling may seem esoteric to the folks back home, but it is actually a fairly simple issue. The President has decided to borrow more money on our Nation's credit card and now he is asking his credit be enlarged. The President's credit card is very clearly over the limit. He is asking the bankers in this room to approve his credit expansion.

So we are going to talk about it because we want to be sure he can afford to take on this much debt based on the fiscal management he is directing. By the end of this month, the President's card will be revoked because his balance will far exceed the credit card limit. What is that limit? The limit the President cannot comply with is $6.4 trillion. That is the amount of indebtedness we are currently permitted to have.

Now he is asking us, the bankers in this case, the 100 Senators, to extend his limit by another $984 billion. But the President does not have to pay that back. That debt is going to be deferred to future generations, about $3,400 for every man, woman, and child in America.

Right after he gets the extension of the debt limit, the President wants to charge at least another $350 billion on the credit card for a tax cut that goes primarily to the wealthy among us. The best part for the President is that he doesn't have to worry about paying the balance. He will hand the credit card off to someone else in a few years and say: You deal with this. All of us will be stuck with the bill--all of our children, all of our grandchildren. I personally was blessed with the birth of a ninth grandchild last Monday. I did not want to greet him with the news he might be inheriting a debt of $3,400 as he starts life. That will be his part of the deficit we are facing. At the rate President Bush is going, maybe our great grandchildren will participate as well.

The flawed economic budget policies have been nothing short of a disaster. It is a disaster of the administration's own making. Now the President wants to make the situation worse with another bloated, irresponsible tax cut.

I thought it was common knowledge when trapped in a hole you stop digging. Our President wants us to keep on digging and digging until we are in a budgetary canyon.

This chart tells a tale of three administrations and fiscal discipline, between the growing deficits of the two President Bushes, then the Clinton administration. We see the bars go from red deficit to a white surplus in the Clinton administration. And now we are headed back for deep deficits.

We see what has been happening with our fiscal conditioning in the last years. Under the first President Bush we had a fairly rapidly growing mass deficit. And then we had a new President come in with a different view of how we ought to manage our financial affairs. In 8 years, we see an amazing change. From 1992-1993 when President Clinton took over, we see it going rapidly into a surplus.

As a coauthor of the 1997 balanced budget agreement, I was proud to work with President Clinton to attain that surplus. At the signing of the agreement as the official Senate representative, I escorted President Clinton, along with Vice President Gore and Speaker Gingrich, across the White House lawn to permit the entire country to see this historic agreement put into effect--a balanced budget agreement. We made tough choices and they paid off and we put the country's fiscal health back on track.

But shortly after President George W. Bush took over, we saw the downward slide to fiscal irresponsibility. President Bush inherited Bill Clinton's surplus and it was squandered in short order. While there are many factors in such a slide, President Bush's irresponsible 2001 tax cut undid any hope of staying in surplus. Now the President-- and this is just an honest policy disagreement--now the President's answer is to borrow more and more. That is why we are talking about expanding the debt with yet another tax cut.

We already passed an irresponsible, bloated tax cut in the last Congress and it has not helped the economy. Circumstances have gotten worse and worse.

Just look at the job situation in America: How people earn their living, pay their bills, take care of their families. Those folks get a heck of a tax cut. Half of the taxpayers of middle income get about $100 a year--basically nothing. If they should lose their jobs, heaven forbid, they will be darned lucky to find new work, and this administration is unwilling to expand their unemployment benefits.

I recently saw President Bush talking about this tax cut plan in front of a board that had written on it: Jobs, growth, jobs, growth-- all over it. The White House staff made sure those words would be in every television image, every photograph of the President at that event. But simply printing the words ``jobs'' and ``growth'' on a board will not turn the President's irresponsible tax cut plan into a job creation plan.

No one seriously believes this program will do anything to create jobs anytime soon. Beyond the slogans, the reality is this administration has, unwittingly or otherwise, been a job eliminator. They have done nothing to

stimulate the economy or create jobs. They say, ``Trust us, and if we get more tax cuts, some will surely dribble down to the job market.''

Look at this chart:

If You Want to Keep Your Job, Stay Out of the Bushes.

Unemployment rate grows rapidly under the Presidents Bush. The higher the bars go, the worse the situation is for thousands of working people. After the high unemployment rates of the first President Bush, we saw President Clinton bring the unemployment rate steadily down, all the way to 4 percent. Virtually no economist thought we could get to 4 percent, but we did. Now we look at how President Bush, George W. Bush, has handled employment. We see unemployment rising again. Just this month we hit 6 percent.

The first Bush tax cut was supposed to create jobs, but we haven't seen any. Since January of 2001, the number of unemployed has increased over 45 percent, with 8.8 million Americans out of work. Since the beginning of the Bush administration, 2.7 million private sector jobs have been lost--over 500,000 jobs have been lost in the last 3 months, with 48,000 lost in the month of April just past.

On top of that, the administration has indicated it would like to eliminate 850,000 Federal employee jobs. In historical context, President George W. Bush has had a rather grim picture, the worst job growth record since the Great Depression. What is growing is unemployment.

Just look at this chart: From the highest job growth to the worst job growth in 58 years. That is terrible.

The chart has a certain attractiveness about it. But if you look beyond the colors, you see a very grim picture. All of these people who are presently out of work are struggling--this shows it very graphically--with an almost impossible situation.

The chart shows President Truman on the left. We see job growth in all the administrations except one. That administration is the current Bush administration. This administration is in the red. It is not creating jobs. We are losing 74,000 jobs on average each month.

Compare this administration with either of the two terms of the Clinton administration. We averaged over 200,000 new jobs throughout the Clinton administration. We are losing jobs in this country. But President Bush's preference is to give more huge tax breaks that go primarily to the wealthiest among us. He is addressing the problem with symbols and signs that suggest a rosier future, but it does not happen, and that adds outrage to neglect. In almost every category, these economic policies are failing.

Real GDP growth is another example. Look at this chart. It shows the average annual percent change in real GDP in Clinton's two terms and so far in President Bush's tenure. It is a stark contrast, as you see--the Clinton first and second terms here and the present George W. Bush term. President Clinton had us above 4 percent real GDP growth, and President Bush's average is barely above 1 percent.

President Clinton practiced fiscal discipline and it paid off. Under President Clinton, we attained a budget surplus. Under President Bush, we are back in deficits as far as the eye can see. Just as a reminder, when President Clinton left office we were looking at the prospect of a $5 trillion surplus over a 10-year period. Now it is expected we will have a $2.2 trillion deficit. Look at the change--$7.2 trillion in a period of 10 years. Under President Clinton, tremendous job growth; under President Bush, losing jobs at a record pace.

President Bush's economic policies are not working the way we would like them. I am sure they are not working the way he would like them to either. Our economy and the Federal budget are in real trouble and it is my hope there will be a reexamination of the tax cut plan in front of us. The first Bush tax cut didn't stimulate anything except the wallets of some of the most wealthy among us. Are we going to make the same mistake twice? It seems as if we are on the verge of doing just that.

We should not have to increase our Nation's debt limit. We should not have to pass the irresponsible tax bill we are considering. But the reason we are going to have to increase that debt limit $984 billion is to accommodate another tax cut, a tax cut that will not stimulate the economy, will not reward those who are working hard to make a living, taking care of their families, providing for education and a roof over their heads, health care, all that is essential in this day and age to provide good, responsible leadership for a family. It will not help.

It is alleged that the tax cut will produce something like $2,000 for the middle class, but it is untrue. It is more like $100 or $200. When you get rid of or reduce the tax obligation for the wealthiest among us, there is not enough left to do more than $100, on average, for half of the taxpayers in the country.

So I hope we will take a second look at what we are doing and curb the expansion of debt that this country is going to have to suffer for many years, maybe decades, to come and not proceed with a tax cut that extends, again, the best benefits to the wealthiest among us, people who need it the least.

I have had many conversations with people, and we have heard from distinguished entrepreneurs such as Warren Buffett, who said he would rather not have a tax cut because he knows that if he pays more taxes, he is left with a higher result in his pocket. I think we have to look at it realistically.

With that, Madam President, I yield the floor and suggest the absence of a quorum.