Railroad Competition Act of 2003

Madam President, I rise in support of the amendment of the Senator from Texas, and I will explain a couple of reasons for that. First, there has been a suggestion to the States that did not receive their full share of funding, the fast growing States--California, Texas, Florida, Arizona, Colorado primarily--that there just was not enough money to be able to bring those States up to the same level as the other States.

There is an acknowledgment that a lot of other States get to the 95- cent level long before these five States do. That is the primary reason for the deficiency. In fact, as my colleagues can see from this chart, Arizona is in the dark blue, and we have simply selected a State--and I do not mean to pick on my colleagues from this particular State because there are others that reveal the same kind of thing--this happens to be the State of Missouri. We can see that beginning in the very first year, Missouri is returned 95 cents for every dollar. That is guaranteed to the State of Missouri all the way across from the very beginning. Whereas in my home State of Arizona, we are stuck at the current level of 90.5 cents in 2004, 2005, 2006, and 2007. It goes up one- or two-tenths of a percent in 2008. It is not until the sixth year, if the funding is available, that Arizona, as well as these other donor States that I mentioned, would be brought up to the same level that all the other States have been at all this time.

In the case of Arizona, the lost revenue during this period of time is about $160 million. So that is money Arizona would have received had it been treated the same as Missouri in terms of the 95 cents received per dollar.

The Senator from Oklahoma is quite right that when there are States that need more than a dollar, then there are going to be States that do not get a dollar for every dollar in taxes that they send in. That is, of course, true. Under the Federal system I think there is an acknowledgment that it is not totally unfair that some States are going to send more in in gasoline taxes than other States. When it is way out of balance and the balance can be corrected, it ought to be corrected.

The argument has been that it would simply have cost too much money to bring States such as Arizona up to this level. I think it would only cost $2 billion. In any event, the Senator from Texas distributes $9 billion over this period of time and makes these States whole.

One place that the $9 billion could have come from, had they wanted to, is the set-aside program in the committee-reported bill for something called the Infrastructure Performance and Management Program. The IPAM is a--I do not want to call it a slush fund but it is a source of funding that is very unclear about where it is going to be spent.

Very little is known about the purpose of such a program, although there are some who believe that it basically will be used to distribute to folks who vote for the bill and whose vote is needed for the bill and that the money, therefore, needs to be held in reserve in order to ensure that in the end they will have enough money to do all that they want to do. Why not use that money to bring the States such as Arizona, California, Texas, and those other States up to this 95-cent level? It is more than enough to do that.

So when they say there is not enough money to do what we are complaining needs to be done, that is simply incorrect. There is enough money. It just needs to be moved from this one program, which does not seem to have a very clear or fair purpose, and move it over to fund this deficiency.

I have just used the State of Arizona with another State that is somewhat comparable, in terms of size and so on, to illustrate the point, but I think the same can be demonstrated for the other States involved. That is why I support the amendment of the Senator from Texas because what it would do is restore this funding level so that from the very beginning all of the States would be treated the same.

Now, that can be done at whatever level of spending one wants to do it. I believe that the level of spending should be much less than the level in the bill. The President believes it should be much less than is in the bill. The President believes that the total amount should be $256 billion. That ought to be enough. That is a 21-percent increase. That is what I think. Whatever the level of spending in the bill, it should be fair as between the States.

Not all States can be treated exactly the same. We understand that. At least it is fair to have a base level. I will give credit to the chairman of the committee and others; they wanted to get this base level at 95 cents and they got there for most of the States but they did not get there for five or six of the States. My State happens to be one of them. It is not fair to the citizens of Arizona.

As a result, I support the amendment because it would bring this level up to 95 cents for the entire period of time we are talking about, not only in the very last year. I urge my colleagues to support fairness and to support the amendment of the Senator from Texas.

Mr. President, I think my colleague from Arizona makes a valid point of order. And as the Senator from New Hampshire has just pointed out, the bill clearly exceeds the budget; therefore, a budget point of order is valid and should be supported by the Members of this body. For those who would vote against the budget point of order, they are in effect saying: Throw the budget to the wind; we want to spend more money than is authorized; and we are going to do that.

The response from our side, those people who wish we would stick with the budget, is to vote to sustain the budget point of order so that we can at least try to keep within the bounds we ourselves have set.

The rejoinder of our colleagues who oppose sticking to the budget is: We will fix the bill in conference. But they are never willing to commit they will bring a bill out of conference that does not violate the budget.

That is our problem. That is why we cannot accept the proposition from our colleagues that we will just pass this bill, that it is all going to somehow magically get fixed in the conference. There have been no commitments made that the bill that comes out of conference will be consistent with the budget. This is why the President has also expressed concerns.

In the Statement of Administration Policy, after noting the fact that the bill pending before us is $62 billion above the President's request--which was for $256 billion--the letter reads as follows:

The Administration's proposed authorization level of $256

billion over six years is consistent with the three

principles listed above.

And those are the principles that have been read before that called for a bill which does not raise taxes, which does not use smoke and mirrors, and which does not take money from the general fund to pay for the highways.

The letter goes on to say:

We support a reasonable [responsible] six-year bill and

support many of the provisions contained in this legislation.

However, we oppose S. 1072 and the pending substitute because

their spending levels are too high and they violate these

principles discussed above. Accordingly, if legislation that

violates these principles (such as this legislation, which

authorizes $318 billion) were presented to the President, his

senior advisors would recommend that he veto the bill.

If we sustain the budget point of order that has been raised by my colleague from Arizona, we will go a long way toward meeting what the President has asked us to do: to stick within the limits that he set and that we set. If, on the other hand, we support the motion to waive the Budget Act of the Senator from Missouri, we have basically said we are not yet prepared to face up to fiscal realities. We are not prepared to show we are going to be fiscally responsible. But trust us, when we get to conference, we might or might not be doing something to bring us back into fiscal balance.

For those reasons, I urge my colleagues to support the budget point of order raised by the Senator from Arizona and to oppose the motion to waive all budget points of order offered by the Senator from Missouri.

Mr. President, I cannot tell you how much I appreciate the words of my colleague from Nevada. I would like to make two points. First of all, when my staff showed me this morning the words of the Senator from Nevada--and they seemed to be very concerned about it-- they probably were a little astonished that my reaction was not particularly negative. I said: Look, people say things on the floor not exactly the way they meant to express them, and I simply attribute it to that. Then I chuckled. The Senator from Nevada and I talked a bit about it, because I said: My friends at the White House might wonder what on Earth the Senator from Nevada was talking about when they appreciate the fact that I don't support the amount of funding in the highway bill even that the President supports, that I don't support the amount of the funding in the energy bill, and in some cases I have been kind of a royal pain for folks in the administration.

I try to support the President all I can, and I do support the President a lot, but we all find ourselves sometimes in opposition to the administration, sometimes in support of the administration. But I do appreciate the sentiment of the Senator from Nevada. He certainly did not mean to suggest, I know, that I only do things if the President wishes them. I appreciate his comments just now.

I also appreciate what else he said, which is the debate has been constructive, that there has been a process to try to get amendments to votes. Just to reiterate that, and describe what I think might happen here next, the budget point of order my colleague from Arizona raised a moment ago has been amended by the Senator from Missouri. I checked with the staff for Senator McCain, and he has no objection to having that vote at or about 2 o'clock, depending upon what the managers of the bill wish to do in that regard. He would be prepared, as I understand it, to come to the floor just before then to make closing comments about that point of order.

I also know Senator Graham is here and wishes to speak. Rather than lay aside the pending business, my suggestion would be to go ahead with that, have any other people speak on it who wish. The managers should certainly be the ones who determine what time the vote is. I will simply express what Senator McCain's staff has told me, which is that he has no objection to voting at or about 2 o'clock and would presume to be here for a few minutes ahead of that time to speak on this budget point of order.

Then presumably following that, if there is not a Democrat who wishes to offer an amendment at that time, I would like to offer an amendment which should not take very long to debate and would be happy to have a vote on that amendment as soon as debate time is concluded. I mean perhaps half an hour or something in that timeframe. I don't know who all might want to speak on it, but I don't have that much time left, and I want to save a little bit of time to speak on other business as well.

Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, let me briefly describe for my colleagues what this amendment does. In simple terms, it reduces the funding we have provided for the transit and highway purposes of this bill from the amount in the substitute offered by the Senator from Oklahoma to the amount requested by the President; namely, $256 billion over the 6- year period.

That is the amendment. There are some features of it we could discuss, if you like, and I would be happy to answer questions from my colleagues. But the gist of this amendment is simply to say, we understand the bill before us is too expensive. The President has said he supports a $256 billion number. The statement of position by the administration would recommend a veto if the bill violates the principles set forth by the President, including specific reference to the substitute that we are considering.

So it seems to me if we want to ensure the bill will not be vetoed, if we want to demonstrate that we are going to begin to spend money wisely here, then we should be willing to support the level requested by the President over 6 years, which is $256 billion.

Now, we have quoted before from the Statement of Administration Policy. What I would like to do is quote from the President's press officer, Scott McClellan, on board Air Force One this morning at just a little after 10 o'clock. After talking about some other things, he had this to say about the question of the highway bill before the Congress. He said:

This is the first test for the Congress when it comes to

spending restraint. And the President's proposal is at $256

billion.

I am reading from the comments this morning of the President's press secretary. He said:

This is the first test for the Congress when it comes to

spending restraint. The President's proposal is at $256

billion. This is for the next 6 years. It's a 21 percent

increase above the previous 6 years, and we urge Congress to

show spending restraint in moving forward on this

legislation.

That is the basis for this amendment, to limit our funding for highway transit purposes for the next 6 years to this level, $256 billion.

Let me get into a little bit of detail about what the Finance Committee did to come up with a larger number. One of the reasons it is important for us to focus on this number is because in all three respects that the President's advisers laid out in the statement of position of the White House, the bill before us violates the principles laid down by the President. Those three principles which caused the advisers to the President to recommend a veto if any of them were violated are as follows: That the transportation infrastructure spending should only rely on gas tax revenues and that there not be any increase in gas tax or other Federal taxes.

This bill raises other Federal taxes. This bill provides new spending that doesn't come out of the highway trust fund but, rather, results from work the Finance Committee has done to close a variety of corporate loopholes. We are familiar with some of the corporate loopholes the Enron executives were able to take advantage of, for example. There are some other provisions we were able to close which represent tax increases for the people who otherwise would have been able to take advantage of those loopholes.

Those tax increases will produce revenue--I have forgotten the exact amount, but in the neighborhood of $50 billion or thereabouts. That was revenue we counted on to use in providing relief to our manufacturing facilities because we are going to be taking away from that some special tax treatment the World Trade Organization held to be impermissible under the WTO principles. Our European trade competitors brought a case against us in the WTO, and we lost that case.

The way in which we gave tax advantages to our manufacturing companies can no longer exist. We have committed to the WTO we will change our tax laws so those advantages no longer exist. However, we recognize we have lost a lot of manufacturing jobs over the last several years. We don't want to simply reduce for those companies the offending provisions. We want to substitute something else so our manufacturing corporations and other corporations will have the tax structure to continue to grow economically, to continue to produce jobs and hopefully create new jobs.

If we use the revenue the Finance Committee came up with for this purpose--and it is called the FSC ETA reforms--if we use those revenues instead to build highways, I don't know where we are going to come up with the money to aid our manufacturing firms. I mean this with all sincerity. It is fine to respond to our general contractors who are great people back in our home States; we are going to be spending a lot of money on highways. We are going to be increasing spending by 21 percent if we just adopt the amendment I have laid forth and the number the President has requested. But I don't know how we are going to look our manufacturing constituents in the eye, and particularly the people who work for them, and say: Gee, we are sorry. We spent the money we would have provided to you on building highways.

I don't know where we are going to get the money to support the tax relief to these manufacturing corporations if we use all of that money for this purpose.

That is exactly what the Finance Committee bill does. The chairman of the committee has said the bill is paid for. This is how the bill is paid for. So we have increased taxes, and we are going to be transferring that revenue from a project we all committed to, and we have to move this forward by March or there will be retaliation by our trading partners in Europe. They have waited patiently for a year and a half or 2 years now. We have to do that. But now we are going to apply those revenues to this bill. Why? Because the chairman of the Finance Committee felt he had an obligation, in view of the Bond amendment that passed last year, to find some way to fund the level the Senate had passed.

It raises taxes. It violates the President's principle. On that alone the President's people would recommend a veto. We should not do it.

Secondly, the President's principle was the bill should not be funded by mechanisms that conceal the true cost to taxpayers. This bill obviously conceals the true cost to taxpayers because it doesn't limit highway and transit spending to revenues we collect in taxes from those revenue sources. The gas tax produces $196 billion in revenue over 6 years. But we don't limit the spending on highways to $196 billion. Instead, we have found other ways to increase that amount of money.

In the Finance Committee we went over all of these various options, and there are some of them that make enough sense that I am willing to support them and say: All right. You could go above the gas tax revenues of 196. You can get up to about 210 to $214 billion and argue with a straight face this is money that is real money and could, in fact, be attributed to the highway trust fund.

But beyond that, we are in fact concealing what we are really doing. That gets into the third principle, which is we should not be funding from the general fund; that we should fund from the revenues we derive from the gas tax and should not take money from the general fund for this purpose. This substitute violates that principle that until now has guided our spending for

highway projects. It is there both to protect highway users to make sure the money in the fund will be used for highway purposes--a point that was eloquently spoken to by the chairman of the committee, the Senator from Oklahoma, a day or so ago.

It also protects those people who don't pay a great deal into the fund because they don't drive very much and they don't buy very much gas. It protects them from having to pay income taxes to support roads they never use. We have always had the principle that we are not going to dip into general revenues, because once you begin doing that, there is literally no constraint, up until now. Now for the first time we are going to dip into general revenues.

How does this bill violate that principle and the second principle of concealing from the American people exactly how these revenues are going to be spent? It pretends money is in the trust fund that is not there. By saying that, I don't mean to denigrate the purposes or motives of my colleagues who created this mechanism. But the fact is, no new revenue is being created by the collection of gas tax revenues to be put into the trust fund. We are simply going to deem that money was put there without it ever having been put there through the gas tax.

For example, there is an exemption for schools and churches and States and towns. So when your local school bus drives around and has to refill the gas tank with gas, we don't charge them the Federal gas tax for that. What we are going to do now is pretend as though we did. We are going to say, there is $9 billion that would have been collected if we had done that, so we are going to pretend as though there is $9 billion in the highway trust fund.

The other thing we are going to do is, if you buy ethanol, you get a 5.2 cent exemption. You don't pay the full 18.3 cents. You pay 18.3 minus 5.2. We are going to pretend as though that 5.2 cents was collected and transferred to the highway user fund. When I say that, the mechanism is we are going to actually collect that tax, but then we will rebate it to the taxpayer. So it actually was collected once, but it has also been rebated. So again, no net new money.

Since you have to pay highway contractors in real dollars--they don't pave these highways for nothing, with fake money--how do you do it? That is where this corporate tax increase money comes in. The Finance Committee closed these tax loopholes, raised taxes on these corporations, and produced--again, the number is roughly 50 billion. If one of my colleagues wishes to correct me, I am happy to be corrected, but say it is $50 billion.

That new tax increase from corporations is going to then be taken from the general fund and transferred over to the highway trust fund. That is general revenues.

So all three of the principles that the President laid down will have been violated. We have increased taxes on corporations, we have obscured the fact that the highway trust fund doesn't pay for all of what we are spending here, and we have transferred money from the general fund into the highway trust fund in order to pay for the bill on which we are about to vote.

In all three respects, we have violated the principles that the President's statement of policy laid down. Given the fact that the advisers to the President said they would recommend a veto if we do that, and if we move forward with legislation--I will cite the sentence from the Statement of Administration Policy:

Accordingly, if legislation that violates these principles,

such as this legislation--

These people are saying ``this legislation'' violates those principles--

Accordingly, if legislation that violates these principles,

such as this legislation, which authorizes $318 billion, were

presented to the President, his senior advisers would

recommend that he veto the bill.

As that letter says, and as Scott McClellan confirmed, the President's proposal is $256 billion, a 21-percent increase over the previous 6 years. That ought to be enough. That is why I offered as an amendment for colleagues to vote on here the opportunity to support the President and say, enough is enough, a 21-percent increase is enough-- we don't need to spend more--and, as a result, we are going to exercise fiscal restraint and pass a bill that is funded at the $256 billion level.

I would like to yield the floor now to any of my colleagues.

Madam President, I rise to speak about the subject of taxation from a little different perspective, a legislative proposal which, if adopted, would add very considerably to productivity in America, and that is a proposal for a flat tax. In the fall of 1994, Richard Armey of the House of Representatives introduced a flat tax. I studied it, then in the spring of 1995, I introduced a flat tax for the Senate. That was the first one introduced. I have introduced it in successive years.

I usually pick April 15, because April 15 is tax filing day. But this year we are going to be in recess for the spring break. I had thought today would be the last day we would be in session. That is open to debate at this point. I just came from a conference of the Appropriations Committee, and there are a great many unresolved issues. I posed the question to my colleagues on the Appropriations Committee: What time do we vote on Sunday?

Some of my colleagues may be listening on C-SPAN2, and that will give them a jolt: What time do we vote on Sunday? Or we might not vote as early as Sunday. We might pick a time on Monday.

I got the attention of the clerks, too, by talking about something important: When are we going to finish the business of the Senate? The distinguished Parliamentarian is nodding his head in chagrin as to what is happening here.

Some suggestions have been floated around the Appropriations Committee of a way to solve this impasse between the House and the Senate on appropriations, the impasse between the House and the Senate on the budget, and that is a constitutional amendment for a unicameral legislature. That would be a shocker. For anybody watching C-SPAN2, that means one chamber. Then the question would come up: Which chamber will it be?

Nobody is going to go to a unicameral legislature, and I do not know when we are going to conclude the business of the Senate. I may be offering this flat tax legislation on the wrong day. Perhaps I ought to wait, because we may still be here on April 15, which would be next Tuesday.

In all seriousness, we have the most extraordinarily complex system for filing taxes ever devised. In the midst of an overwhelming bureaucracy and a regulatory system in Washington, DC, nothing compares to the Federal tax code.

The Federal tax code has grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages at the present time. A study showed that more than 13 hours are consumed by the average American--rather, more than 13 hours are consumed on average--there is no such thing as an average American--on average by taxpayers in filling out the principal Form 1040. And if one goes to the various schedules, it can be another 5\1/2\ hours or 7\1/2\ hours.

I just finished filling out my tax return, and it is inordinately complicated. It is insufficient to be a Philadelphia lawyer to understand the Federal tax code, and then the State taxes, and then city taxes, the wage tax, the property tax, and the real estate tax. It is a nightmare.

It is possible to change all of that by going to a flat tax, and then the tax return would be on a postcard. The wonders of television. People can see the postcard. It will take about 15 minutes to fill out a postcard, which would identify the individual, specify the total compensation, specify the allowance, the number of dependents, and in the course of 15 minutes it would be finished.

This tax would be calculated on a flat rate of 20 percent. It would be very beneficial to people at all levels of the income strata except for those who engage in tax shelters. The average American today, or in the middle income, a family of four, which does not itemize deductions, pays taxes on all income over $19,850. Under this flat tax, there would be a personal exemption of $27,500 for a family of four, and taxes would be paid only over that amount.

After having just criticized charts, my staff has brought me a chart which they prepared. I certainly would not want to omit the showing of this chart. The writing is too small for reading on C-SPAN2, but it specifies the identity of the person, the total compensation, the personal allowance, and it can be filled out in the course of 15 minutes.

A superior depiction, in my opinion, is the postcard. People can deal more easily with postcards than they can with charts.

I have provided for two deductions which I am maintaining, deductions on interest and charitable contributions. It may be that ultimately we will have a totally flat tax, which would reduce another percent down to 19 percent. I have included interest on home mortgages because it is so prevalent, and I believe Americans might be very surprised not to be able to deduct their interest on home mortgages. That interest on home mortgages has been a great stimulus for housing construction and also a great encouragement for people to own their own homes. That is very important as a societal matter.

I have also retained the deduction on charitable contributions, which remains very important. That was reinforced by the Senate earlier this week by providing an increase in charitable contributions deductibility looking toward faith-based initiatives.

What I would like to do most emphatically would be to get the debate started. This body, the House, and the Treasury Department have never seriously considered a flat tax. It ought to be seriously considered. Whether it would be accepted or not would be the outcome of the debate. The flat tax proposal which I am bringing to you today, which is modeled after the outline by Professor Hall and Professor Rabushka of Stanford University, has been very carefully thought through. It is a neutral tax scheme. An analysis of people at various income levels shows that it is universally beneficial for all except those who engage in tax shelters and pay no tax at all.

The greatest benefit would be the savings to the American people of some 5.8 billion hours a year and some $194 billion in preparation expenses. I have actually seen estimates on the cost of tax compliance as high as $800 billion. Again, these estimates are such that nobody really knows, but as lawyers say in litigation, the pain and suffering that goes with filing these returns, or the cruel and unusual punishment involved in making these computations and the study involved, it would be a great relief to the American people. It would be win, win, win. There would be great savings in time. There would be savings in individual taxes, and there would be a tremendous stimulus to the economy so that so many corporations and businesses would no longer have to have a special office, which is the practice in many places, for the tax collector who comes in to conduct the audit on a yearly basis.

To reiterate, in less than one week, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings poring over page after page of IRS instructions, going through their records looking for information, and struggling to find and fill out all the appropriate forms on their Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 325 possible forms, not to mention the instructions that accompany, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to the Tax Foundation, American taxpayers, including businesses, spend more than 5.8 billion hours and $194 billion each year in complying with tax laws. That works out to more than $2,400 per U.S. household. Much of this time is spent burrowing through IRS laws and regulations which fill 17,000 pages and have grown from 744,000 words in 1955 to over 6.9 million words in 2000. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words.

The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the estimated preparation time listed on the forms by the IRS, the 2002 Form 1040 is estimated to take 13 hours and 10 minutes to complete. Moreover this does not include the estimated time to complete the accompanying schedules, such as Schedule A, for itemized deductions, which carries an estimated preparation time of 5 hours, 37 minutes, or Schedule D, for reporting capital gains and losses, shows an estimated preparation time of 7 hours, 35 minutes. Moreover, this complexity is getting worse each year. Just from 1998 to 2002 the estimated time to prepare Form 1040 jumped 96 minutes.

It is no wonder that well over half of all taxpayers, 56 percent according to a recent survey now hire an outside professional to prepare their tax returns for them. However, the fact that only 29 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk--Congress made about 9,500 Tax Code changes in the past 12 years. And we are far from being finished. Year after year, we continue to ask the same question--is there not a better way?

My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present Tax Code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness, and economic growth.

My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations, and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families instead of poring over tax tables, schedules, and regulations.

My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair and designed to maximize prosperity for all Americans. A summary of the key advantages are:

A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 5.8 billion hours they currently spend every year in tax compliance.

The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages currently. It would also allow us to slash the mammoth IRS bureaucracy of 117,000 employees.

Economists estimate a growth of over $2 trillion in national wealth over 7 years, representing an increase of approximately $7,500 in personal wealth for every man, woman, and child in America. This growth would also lead to the creation of 6 million new jobs.

Investment decisions would be made on the basis of productivity rather than simply for tax avoidance, thus leading to even greater economic expansion.

Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings.

Americans would be able to save up to $194 billion they currently spend every year in tax compliance.

As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually.

Simplification of the tax code will allow us to save significantly on the $7 billion annual budget currently allocated to the Internal Revenue Service.

The most dramatic way to show what the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out.

At my town hall meetings across Pennsylvania, the public support for fundamental tax reform is overwhelming. I would point out that in those speeches that I never leave home without two key documents: 1, my copy of the Constitution; and, 2, a copy of my 10-line flat tax postcard. I soon realized that I needed more than just one copy of my flat tax postcard. Many people wanted their own postcard so that they could see what life in a flat tax world would be like, where tax returns only take 15 minutes to fill out and individual taxpayers are no longer burdened with double taxation on their dividends, interest, capital gains and estates.

This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2002 tax year, the standard deduction is $4,700 for a single taxpayer, $6,900 for a head of household and $7,850 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,000. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $19,850-- these are personal exemptions of $12,000 and a standard deduction of $7,850. By contrast, under my flat tax bill, that same family would receive a personal exemption of $27,500, and would pay tax on only income over that amount.

The tax loopholes enable write-offs to save some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the tax code, the taxpayer being able to find out exactly what he or she owes.

This bill is modeled after legislation organized and written by two very distinguished professors of law at Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, S. 488. On October 27, 1995, I introduced a Sense of the Senate, resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced this legislation in the 105th Congress with slight modifications to reflect inflation- adjusted increases in the personal allowances and dependent allowances. I re-introduced the bill two Congresses ago on April 15, 1999--income tax day--in a bill denominated as S. 822. More recently, I introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill. The amendment was not adopted.

Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our Nation's Tax Code and the policies which underlie it. I began the study of the complexities of the Tax Code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operations for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.''

The Hall-Rabushka model envisioned a flat tax with no deductions whatever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With only those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible.

In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality of the Hall-Rabushka proposal, which uses a 19- percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions.

This proposal taxes business revenues fully at their source so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the Tax Code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans.

The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts.

Professors Hall and Rabushka have projected that within 7 years of enactment, this type of a flat tax would produce a 6-percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system.

I ask unanimous consent that the bill, be printed in the Record.

Madam President, I rise in strong support of the amendment being offered by the Senator from Texas. Her eloquent explanation of the amendment is very compelling.

Let me go back to the larger issue. It is fascinating to me that after receiving a Statement of Administration Policy where the President of the United States says:

In total the Senate bill authorizes $318 billion in

spending on highways, highway safety, and mass transit . . .

a full $62 billion above the President's request for the same

period. . . .

Accordingly, if legislation that violates these principles

(such as this legislation, which authorizes $318 billion)

were presented to the President, his senior advisors would

recommend that he veto the bill.

There was discussion amongst Republican Senators yesterday that we will fix it in conference. I have this quaint and unusual idea that when we are authorizing $256 billion or $318 billion, maybe the whole Senate ought to be involved rather than ``fixing it'' in conference.

I cannot speak for my friends on the other side of the aisle--they are the opposition party--but how does this party, the party of fiscal sanity, the party of smaller Government, the party of lower taxes, the party that insisted that any revenues to fund highways should come out of the trust fund, now support a bill--according to the last vote-- overwhelmingly when the President of the United States and the American people are saying ``enough.'' Enough deficit spending, my friends. Enough. We are mortgaging our children's futures.

We just found out we have been sold a bill of goods on the Medicare prescription drug bill. It is $153 billion more than it was advertised to be a few months ago. When does it stop? When does the Republican Party find its soul? And this bill is an outrageous manifestation of how badly we have left our moorings. The amendment of the Senator from Texas at least restores some equity and fairness to this proposal.

I don't want to take too much more time except to mention one other point about the President's message:

In addition, the Administration opposes inclusion in a

surface transportation bill of unrelated provisions regarding

Amtrak. Any legislation regarding the future of Amtrak should

be considered separately and should provide for meaningful

reforms. . . .

What is interesting about that aspect of the President's message is, as chairman of the Commerce Committee, none of the provisions that the administration objects to came out of the Commerce Committee, the authorizing committee. It was stuck in by the managers of the bill who have about as much knowledge, expertise, and jurisdiction over Amtrak as I do over nuclear science.

It is fascinating the overreach of this bill. They add provisions for Amtrak that have nothing to do with their area of jurisdiction, and what we reported out of the Commerce Committee was not objectionable to the administration.

Finally, this whole formula is just crazy. It is bizarre and byzantine. In TEA-21, there was an immediate increase in the highway formula to provide each State a minimum return of 85 percent to 90.5 percent. The very first year of the authorization period, all donor States received an immediate increase. It has still not been explained to me or any of my colleagues why we should wait 5 years before our share increases. Why should we wait 5 years? It is patently unfair, and it is patently abusive, particularly for those of us who represent States that are dramatically growing in population, which means that our needs, obviously, are greater.

I make no argument that my State deserves more, not in any way. I say the citizens of my State deserve $1 back for every dollar they sent in the form of taxes to the Federal Government.

Madam President, I yield the floor.

Will the Senator from Oklahoma yield to me for a comment, through him, that is a correction?

I say to the Senator from Oklahoma, I was incorrect in my comments concerning the Amtrak provisions. These were provisions that I opposed in the bill and I was incorrect when I stated that they were put in by the committee. My apologies to the Senator from Oklahoma.

I suggest the absence of a quorum.

Mr. President, yesterday Federal Reserve Chairman Alan Greenspan sent Congress what should be a much needed and sobering wake- up call. He warned that a lack of fiscal discipline could lead to increased long-term interest rates and called for new steps to restrain spending.

In delivering the Fed's monetary report to the House Financial Services Committee, Mr. Greenspan said that should investors become significantly more doubtful that the Congress will take the necessary fiscal measures, then appreciable backup in long-term interest rates is possible.

Also, as we know, yesterday the administration transmitted its statement of administrative policy which we will continue to talk about throughout this debate. We all know the projected budget deficit for 2005 is over $500 billion, half a trillion dollars. Almost every Member in this Chamber has been talking the talk about reining in spending, but when are we going to start to back up our words with our actions? Passage of this bill would be the quintessential example of what we are doing wrong and how we are not stepping up to future financial straits for our children and grandchildren.

The current budget resolution provided $231 billion for the EPW Committee to spend on its portion of the bill. That is the current budget resolution. The pending EPW proposal would instead provide $255 billion, or $24 billion over the current budget resolution by which we are to be abiding. The current budget resolution provided $37 billion for the Banking Committee to spend on its transit portion of this bill. The Banking Committee proposal contained in the pending bill provides $46 billion or 25 percent over the budget resolution.

I guess I have to ask a question about this body's adherence to the budget resolution. We spend arduous days, and then with a vote-athon that is the most unpleasant day and evening of the year--certainly for me and I believe for most of my colleagues--we come up with a budget resolution and one we at least commit to abide by.

This bill, at least in two instances which I am bringing to your attention, is $24 billion over the current budget resolution by EPW, and 25 percent or $9 billion over the budget resolution by the Banking Committee.

A few days ago, the Wall Street Journal editorial entitled ``Road Kill'' had some pretty harsh comments about what we are doing today. I will not quote from all of it. The Wall Street Journal editorial says:

An old political adage has it that the most dangerous place

in Washington is between a Congressman and asphalt. That is

exactly where taxpayers now find themselves as Congress

conspires to pass another monster highway bill. The only good

news is that President Bush is showing signs he may fight

this election year.

The administration has its own highway proposal which is

hardly cheap. Mr. Bush is asking for $256 billion over six

years, which is 21 percent more than the past six years and

fairly close to Treasury estimates of revenue from the

current 18.4-cent-a-gallon federal gas tax that is earmarked

for roads.

Ah, but this isn't enough for the boys of summer

construction. The draft Senate bill demands $55 billion more

than Mr. Bush and is loaded with fiscal gimmicks that divert

money from general--non-gas-tax--revenues into roadbuilding.

One of the more embarrassing arguments from Congress's

highwaymen is that this is somehow a ``jobs bill.''

That is what we continue to hear on this floor over and over again.

So at least for parochial matter, Republicans claim to

believe in the superiority of government over private

spending. Some Econ 101: Highway spending rolls out slowly

over many years but new taxes are immediately taken away from

the more productive private economy.

I would like to repeat that.

Highway spending rolls out slowly over many years but new

taxes are immediately taken away from the more productive

private economy. Still, this is a fight worth having.

Congress will keep spending freely until Mr. Bush shows he's

willing to spend political capital to say no. In a letter to

Congress last week, Administration officials warned that any

bill that includes higher gas taxes, trickster accounting or

a siphoning of general tax revenues will face a veto.

Presidents who make veto threats and don't fulfill them

quickly come irrelevant.

There are one of two things that are going to happen and let's be very clear about what is happening. One of two things is going to happen.

No. 1, if we pass this bill, it goes to conference and the President of the United States makes good on his very specific veto threat. I am sure that will be of benefit to the President of the United States in showing he is willing to crack down on reckless fiscal insanity, which is really what this bill is all about, or, somehow, a bill is passed by both bodies and they go to conference and, without the participation of the majority of Members of the Senate, the bill will be pared down to the President's demands.

Either way, this bill is rendered meaningless. What we are arguing about is a meaningless 1,300-page piece of document because the President has assured us that, unless it is a certain level, far lower than the present level, he will veto it.

I don't know if the President has the votes to sustain his veto in this body, but I am confident the President has the number of votes to sustain his veto in the other body. Either way, my dear friends of the Senate cannot come out of this looking good because we are so far over in excess of what the President has guaranteed he would veto.

As my colleagues who are managing this bill keep saying: We will fix it in

conference. We will fix it in conference. The last time we fixed something in conference we got a Medicare prescription drug bill that, it turns out, was only $143 billion short.

I have seen things fixed in conference and there is nothing worse than seeing a piece of legislation ``fixed in conference.''

So we are arguing about a piece of legislation that cannot pass--that cannot pass, certainly at its present level, by a significant number of billions of dollars. We are in violation of our own budget resolution in this bill.

Therefore, I raise the point of order against the substitute amendment pursuant to section 302(f) of the Budget Act.

Parliamentary inquiry: Doesn't it have to be sent to the desk?

I ask for it to be sent to the desk.

I would like to respond to the Senator from New Hampshire.

Is the Senator aware that the EPW portion is over, by $24 billion, the budget resolution? The Commerce Committee is over by $2.5 billion. The reason it is over by $2.5 billion is because of administration requests. But I would be more than happy and would vote for removing the $2.5 billion which the Commerce Committee is over and the $24 billion that Environment and Public Works is over. That, it seems to me, would be fair.

Again, I hope the Senator from Missouri would look at the substitute that contains the Commerce Committee's input in title IV. The Senator from Missouri keeps claiming that the Commerce Committee is not in there. Look at title IV of the substitute, I say to the Senator from Missouri, and then you will find out what the Commerce Committee is. I am astonished he does not even know what is in his own substitute.

Mr. President, since the Senator from Missouri is on the Senate floor, I draw his attention to the index of his own substitute which has the commerce provisions of the bill in it in title IV. I wish he would ask to strike his comments if he doesn't know what the Commerce Committee is. I guess I shouldn't be surprised, but I am a little surprised that he doesn't know what is in his own substitute.

The Senate Budget Committee staff tells us that EPW is $24 billion over the budget; Banking, $9 billion over the budget; Commerce, $2.5 billion over the budget--I would be more than happy to erase all of those--for a total of $35.5 billion over the budget. Meanwhile, everybody in America is warning us about running up these huge deficits. The President of the United States, the administration's proposed authorization level was $262 billion on highways and highway safety, $50 billion over the President's request; $56 billion on mass transit, $12 billion over the President's request. In total, the Senate bill authorizes $318 billion in spending on highway safety and mass transit over the next 6 years, a full $62 billion above the President's request for the same period.

The President has guaranteed a veto. He has guaranteed a veto if we go on with this number which the managers of the bill continue to stoutly defend. King Canute had a better idea.

I hope my colleagues will vote to support the point of order which was raised against the Budget Act.

I yield the floor.

Mr. President, I probably will not win this vote since I think the sentiments of many of the Members were expressed in the cloture vote, but I think it is important to point out again that the total spending in this bill exceeds the current budget resolution by $35.5 billion. We are facing a $500 billion deficit for the year 2005. In the Armed Services Committee hearing the other day, the Secretary of Defense pointed out that they will be coming in for a supplemental appropriation, many billions of dollars, after the elections, probably sometime in January. Our service chiefs mentioned that they might be 4 months' short of being able to operate with the funding they have. Our priorities seem to be passing a bill that exceeds the budget resolution by $35.5 billion.

I note the presence of the Budget Committee chairman, who I think does an outstanding job. I appreciate the credible efforts he has made both as chairman and otherwise for fiscal sanity. I wonder if we ought to waste our time this year going through the couple of weeks of trying to come up with a budget, or should we consider, as many House Members have and other Members of this body, that perhaps we should make the budget resolution signed into law by the President of the United States? With all due respect to my dear friend from Oklahoma, who has been here many years, this makes a mockery of the entire budget process.

The distinguished chairman of the Finance Committee came to the floor and raised these old chestnuts as to how we are going to finance it. My all-time favorite is customs user fees. Again, I ask my friend, the chairman of the Budget Committee, how many times have we used customs user fees as a way of paying for something which has now given us a half-trillion-dollar deficit, the party of the balanced budget amendment to the Constitution in 1994?

Mr. President, I ask unanimous consent for the Senator from Oklahoma to respond to my tirade.

I say to my friend, I thank him for his hard work. Again, I do not look forward to the most unpleasant day we have this year in the Senate, and that is when we all vote every 30 seconds on issues of huge import and none of us have a clue as to what we are voting for when we do it.

Again, I don't think it is through any fault of the chairman of the Budget Committee that this is over the budget resolution by $35.5 billion. But, if this is the process we should go through when we are authorizing or appropriating money--we have a budget resolution. It calls for a certain amount of money to be spent for a certain function. But then we can get the chairman of the Finance Committee to come down and say, Don't worry about what we decided in the budget resolution; we will just find some more money. Usually customs user fees is one of the old chestnuts that are drawn out of the fire to be used over and over again.

The other thing about this, my dear friends, the House of Representatives just decided to delay by 4 months consideration of the transportation bill. Why? Because there is an outright revolt over there, because they are closest to the people, about these totally out- of-control spending practices which have given us these unprecedented high deficits. I hear a rumor that they may do what is probably the right thing to do and just extend for 1 year the existing transportation legislation.

So what do we do? We are passing legislation of which the President of the United States has guaranteed a veto. Again, I like to point out, it is the Republican Party that is the majority. It is the party of the President of the United States that is in the majority here, yet we are pushing a bill to which the President says he is unalterably opposed. What is going on?

I hope my colleagues will consider voting to uphold this budget point of order. It is clearly valid. This budget point of order is clearly valid.

My friend from Oklahoma said he wished I hadn't raised this point of order because he doesn't like to see the budget really overridden. A vote against upholding the budget point of order, to waive the budget point of order, will basically override the work of the Budget Committee. I hope my colleagues will take that into consideration if they vote to waive this and future budget points of order.

It is interesting, on this bill no further budget point of order can be raised, according to the waiver that is before the Senate now. No matter how outrageous, no matter how egregious, we have waived this budget point of order and future points of order.

There is something wrong with this system. Let me remind my colleagues again, we have been on this for 2 weeks. For 1 week we didn't have a single vote. Yes, I oppose unanimous consent agreements. I never ever opposed votes on amendments. I was in favor of those. Why didn't we have a vote on the Gregg amendment? The reasons are obvious: Because they didn't want a vote on it. But that was not a reason to stall any process. But that is behind us.

Now we are faced, as of yesterday, with a veto threat from the President of the United States because of the tremendous $35.5 billion increase in spending over the budget resolution and about $62 billion above the President's request on this legislation.

I urge an affirmative vote, a vote against the motion to waive the budget point of order.

I yield the floor.

Mr. President, I must say this has been a very interesting first year in the Senate. Our country has been challenged in many ways. I have listened to this debate about the highway bill. If I were a citizen of Oklahoma, I would be pretty proud. You have two Senators down here expressing different points of view but in a very articulate way.

The problems Senator Inhofe related in Oklahoma are very real in South Carolina. We are billions short of the money we need for bridges and roads. It is an honest-to-God legitimate problem. This is not about getting reelected. When people say that, I disassociate myself with that. This is about trying to do some good for the country economically.

One good thing about the highway bill that needs to be said more is, it is not just about jobs. That is very important. But another thing for sure, these jobs are going to be here. When you pave these roads and you build these bridges, most of the time, if not all the time, Americans are going to be doing the jobs.

One of the reasons we have had a kind of jobless recovery is that the jobs that are being created are being created overseas. When you look at trying to create a domestic opportunity for somebody to go to work, a bill such as this is an excellent opportunity for people to go to work.

Whether or not it busts the budget, I have had a fascinating opportunity, sitting in the chair for the last hour, to try to figure all that out. Senator Nickles is going to be sorely missed by this body. I find him to be an extremely smart, capable person. Senator Grassley and Senator Nickles are very good friends. I like them both. Senator Grassley took the floor about the bill being paid for.

Here is where I come down. The President has made a decision for the first time in his Presidency to threaten to veto a bill if it goes above $256 billion. To the defense of the people in the Senate, there has been a little bit of bait and switch here. The White House at one point in time was not so inflexible in growing the number. I don't know what has happened there, but something has happened. My best guess is that the President sees a trend that is pretty disturbing to our party and maybe the country in general. We have lost sight of our fiscal responsibilities. The deficit is larger than anyone would like. It is going to grow.

The things we have done in the past have all been necessary. A prescription drug benefit can save you money because if you keep people out of the hospital with a prescription drug, that is a lot better than having to treat them in the hospital. But at the end of the day I voted no on that bill because I believed that by the way we set it up, utilization rates would go through the roof.

I am totally convinced that the marketplace works in two ways: It can bring out the best in people or the worst. If you have a dollar copayment, if you make under $12,000 a year as a senior--and a lot of people are in that situation--your payment under the Medicare prescription drug bill is $1. That is it. I just really believe that people are going to start using drugs at a higher rate and that if you are in the middle of the pack, as a middle-income senior, this is not that great a deal. The donut hole will be filled in because of political pressure. The means test is a great idea and the health savings accounts is a great idea, if we can hang on to them.

At the end of day, my fear was that the Medicare bill would not be $395 billion; it would explode. Even in my wildest dreams, I never believed it would explode by some $130 billion in a week. So the estimate of 395 is now 534.

Let me tell people in South Carolina about these estimates. It is a guess at best. It is an educated guess. The deficit is an educated guess. Two years ago we had trillions of dollars of surpluses as far as the eye could see over a 10-year period. The truth is, you really can't govern based on what is going to happen 10 years from now because you really don't know. You can govern pretty well if you will watch every year or every couple years where you are and project down the road and not let this thing get out of hand.

The highway bill is not like the farm bill. The farm bill was special-interest driven even more than the highway bill. I wound up voting for the farm bill. The amount of money we spent on the farm bill was more than I felt comfortable with, but I wound up voting for it because I am trying to get my legs here as a new Senator.

Senator Inhofe and Senator Grassley were the two leading proponents of the tax cuts. I am very glad I voted for the tax cuts because I think they have helped the American economy. But we are going to have to make a decision in

light of everything we have done in the last year--the war, the tax cuts, because it does take money away from the budget in the short term, but it has helped the economy--how far do we go down this road, no pun intended.

I guess I have made a decision. I have made a decision that the President's desire to not see this bill grow over 256 is probably a good decision. You hate to do it on a bill where so many people have worked so hard to address legitimate needs and to clean up the mess of highway funding. Senator Inhofe, his colleagues, and his ranking member should take great pride in the fact that they have taken the funding of highways that was kind of a hodgepodge and made it more professional. You brought money back into the highway trust fund that should have been there all along. You have taken interest payments on highway trust fund moneys that went to the general revenue and you have brought them back. I congratulate you for trying to build a stronger fund because we need a stronger fund.

Here is the really hard part for me as a conservative. The average person in my State works until about May, or now almost June, to pay taxes. If you are out there working for a living, when you add up your State tax and local tax and Federal tax and you look at your pay, it takes you almost half the year before you start working for yourself. So the last thing I want to do is come up here and put another burden on people.

The worst thing I could do is come up here and lie to people. This is the truth: Our highway funding needs are far in excess of the money coming in from the gas tax, the mass transit taxes. We are trying to get more money back into the pot, and I don't want to use general revenue.

The reason I don't want to use general revenue is that it would be a bad principle. If you start using general revenue to fund highways, then you will just have total budget chaos. The authors of this bill have tried to avoid that as best they can. They put money back into the fund. In their opinion, it is not enough.

We are at war. The Senate highway bill is increased by 43 percent. I am sure every penny could be used in a legitimate manner. But when you do the family budget and when you do your budget back home at a business entity, to raise one area by 43 percent would be a very difficult task to do to keep the budget balanced. As much as I would like to get money into Oklahoma and South Carolina in a more robust fashion, I don't believe a 43 percent increase, given our financial dilemma up here with the war and other problems, is going to be fiscally sound.

With the President's increase of 18 percent and 43--I hope we can reach a compromise. The House version of 70 percent is not going to happen. The key issue is, how can you get more money in the trust funds without raising taxes? Down the road, I don't see how you do that. So some time in the near future, America is going to have to come to grips with a couple of competing concepts. The war on terrorism was unexpected in many ways, in terms of its scope and cost. Maybe it should not have been, but it was. Every day we are trying to get better in fighting that war. We have spent a lot of money we did not plan to spend but couldn't afford not to spend. That is on the deficit.

The recession is finally over. That has been hurting our revenues. As I see it, as a fairly new Member of this body, future budgeting is going to be tough to get this thing back to balance in my lifetime. We are going to have to do some things we have never done before. I think there have been a lot of creative things done to the trust fund to make it more solvent in the future.

This is a bridge too far for me. I want to build bridges, but there are too many being built given our other needs right now. Probably, over time, conservatives are going to have to come to grips with a gas tax increase, which is going to be the only legitimate and honest way to make up the shortfalls in terms of our highway needs in this country. You can play with the numbers all day long, but a legitimate, honest debate over whether we need new revenue has been had in this bill. The question is how to do it.

I think this bill borrows money. This bill is not paid for. The point of order is legitimate. I am not blaming anybody because the needs are real. But some day, somehow, somewhere, we are going to have to start saying no to something. The President has chosen to say no to this approach to highway funding.

This President has not vetoed a bill since he has been in office. Whether or not he will veto this particular bill, I don't know. But his letter was correct in terms of his concerns about the way we are going as a Nation, in terms of spending. I hope and pray we can work out a compromise between the House and Senate and the President that will do most of the things Senator Inhofe would like to do, because those are legitimate concerns. They will not be able to get everything they want, given the amount of money we have to spend. That is probably true of people in South Carolina who voted for me or did not vote for me. This year, you are not going to get everything you would like because times are tough.

My hope is if we cannot do a 6-year bill we can agree on, which will withstand the highway road building projects in a way that will allow things to go forward, we will come back next year after the election and look at some long-term solutions. That is my hope. At the end of the day, I think the President will veto this bill, and it will be a debate that probably needs to be had about how far you can go before you literally not only break the bank but make it impossible for the bank to be restored.

I know a lot of people have worked long and hard. Senator Grassley was given the job of trying to come up with some offsets, and he is right, it is hard to do. I think Senator Inhofe has looked at the highway trust fund every way you can look at it to try to make it more sound and secure and to get legitimate revenue into the pot. Unfortunately, at the end of the day, the amount of money we are going to spend has a deficit component, in my opinion. I may be wrong. But the President sees it that way. The politics of this bill is probably the most important decision we will make this year in terms of domestic spending. If we can resolve this issue in a way that maintains budget integrity and gets money out into the country to create jobs, we have set a good tone for the rest of the year. But if the political discourse about this bill at the end of the day divides us along many lines, and creates an us-versus-them attitude and we try to say one side is good and the other side is bad--that is about where we are right now--the prospect of a consensus down the road to maintain the fiscal discipline we need to balance the budget one day I think will be lost. I don't know how it happened, but it has happened.

All the forces that are in play post-9/11 and before are coming together on this bill--the obligation of the country to defend itself, the obligation of the country to make itself economically viable by improving infrastructure, the moral duty for one generation not to put so many burdens on the next so that they cannot survive, making hard decisions that are inconsistent with some of the things you have said as a politician in the past, like raising taxes--all of those concepts are coming to bear on this bill. To me, this bill and how we resolve it is a test of character as much as it is of anything else.

Do we have the ability to set aside our individual hopes and dreams, whatever they may be--whether deficit reduction, highway spending, never having a tax increase, whatever drives your train--can we find some common ground? If we leave the playing field having a veto that was overridden, the consequences to this country, not just the Republican Party, are extremely serious because if we cannot control it on highways, as popular as that might be, how will we ever control it when it comes time to repair Social Security?

That trust fund is $5 trillion short of the money it needs to maintain solvency by 2042. By 2075, that trust fund is $75 trillion short of the money it needs to maintain solvency. Those are numbers beyond comprehension. How did we get into that mess? Both parties, in my opinion, have played games with the real problem of Social Security, because nobody in the past has really wanted to embrace the looming problem Social Security faces. Why? It is very hard in any election cycle to talk about Social Security, because people who are on it get scared to death.

I was born in 1955. There were over 16 workers for every retiree when I was born. Today, there are three workers for every retiree. Twenty years from now, there are going to be two workers for every retiree.

The point I am making is Social Security has a problem that is not created by the Republican or Democratic Party. Social Security is funded by payroll taxes. That is the exclusive source of money coming into Social Security. The highway trust fund is funded by gasoline taxes. If you think the highway bill is a problem, trying to live within these numbers, you have not seen anything yet when it comes to Social Security. The consequences of having 2 workers for every retiree versus 16 for every retiree when I was born are huge.

In 2042, which is not that far away, the only way we can keep the checks coming is to reduce benefits across the board by 28 percent or double taxes. To sit on the sidelines for the next 30 years and argue with each other is unacceptable because after 2042, it gets worse. The highway bill has a similar problem but not nearly as dramatic. I think every dollar we will spend in this highway bill has a legitimate purpose.

If we overspend this year, if we go to 43 percent this year and add to the deficit and not have a fiscally sound plan to save the highway trust fund, we set in motion the forces that come back to haunt us. If we could solve the highway problem in a bipartisan fashion, then maybe we will solve Social Security in a bipartisan fashion. But the truth is that the highway needs, the infrastructure needs of this country cannot be maintained at the current rate of revenue flowing into the trust fund. That problem gets worse over time, not better.

I do not want to pass on every problem on my watch to somebody else. I would like to be thought of as somebody who at least embraced a few problems on my watch in a serious way and did things outside the box. There is nothing outside the box about trying to create offsets. We do that all the time. There has been some outside-the-box thinking about this trust fund and recapturing money, and that will make this trust fund more solvent and more sound over time.

At the end of the day, in my humble opinion, we can't afford, at this point in our Nation's history, with a looming deficit that seems to have no end, a nation at war that seems to have no end in the short term, to increase spending on something as meritorious as highways at this level now this way. That is why I think this vote on this bill will define us for the rest of this year and maybe in years to come.

I am totally convinced of the following: That if the leaders of the House and the Senate sat down with the President, we could find a way to put new money into the trust fund, get through this conflict, and next year talk about some new funding that would be permanent over time. I think that is possible. I hope that happens because the quality of the people with whom we are dealing are capable of doing that. I will not be in that room as a junior member.

I just have one vote, and my vote will be cast for a purpose. It is not to deny anybody a chance to improve their State or for us to improve the economy through better infrastructure. I will vote no, and hopefully the President will have some support for his veto threat. That ``no'' vote is cast to say let's look at a different way, a better way of resolving this issue. This, right now, is sheer, tough politics.

People wonder: If they vote no, will they lose all their highway projects. That won't be up to me. People have to choose the path they think is best to manage their bills and to run the Senate. But I can say for absolute certainty that the best way for me to go home and get reelected is to be me. I am not going to try to change and become something overly opposite of what I ran on. So I believe if I vote no with the proposition that 43 percent is more than the taxpayers can afford right now in terms of retiring the deficit over time, that this is a bridge too far, most people will agree with me.

That is my hope; that is my bet. But if they don't, I am still going to vote no because the reason I was sent here, I assume, was to use the best judgment I can muster. And the best judgment I can muster after having listened to this debate, which I think has been good and healthy, is that this highway bill has been innovative. We have done some things to make the trust fund sound, and the needs are real, but we are going too far. We are putting too much pressure, combined with the other actions that we have taken, on future generations, and somebody sometime has to say: Whoa.

That is what I intend to do--to cast my vote with the idea of let's look at this in a new and different way in light of the rest of our problems.

I yield the floor. Mr. President, I thank you for listening.

Mr. President, we have had 2 weeks of a lot of discussion. We haven't had a chance to vote on amendments mostly because there are some Members who have been objecting to moving forward to consideration of amendments. I think that is regrettable.

We are now to the point where we are going to have a vote on cloture. It is absolutely necessary. The alternative to this would be an extension. Probably 20, 30 different times Members have come in and said we should have an extension. If we have an extension, we will not have streamlining provisions, and we cannot move on with IPAM. We cannot immediately start constructing these roads and bridges.

It doesn't make any sense to stall and stall and wait around and do nothing. We want to get this bill on the road. That is what we are going to do, and we are going to do it today.

I regret a lot of people who wanted to have amendments considered during the last 2 weeks have not been able to do so. I regret that some people just blocked them from having that opportunity.

There have been a lot of objections that have come up on this bill. Members keep talking about the 40-percent increase--40-percent increase. That is 40 percent over 6 years. If you said 6.2 percent for the infrastructure of America that is lagging so far behind, no one could complain about that. They are making it appear this is 40 percent in one year. It is not.

They are talking about the amount of money in this bill. We have to understand we have two things we are looking at. One is capital outlay and one is obligation limitation. This is a perfectly reasonable bill. We have done something that has not been done before. It was not done in 1991, and it was not done in 1998. We have stayed with the formula. The alternative is to stay with the formula, like we failed in TEA-21 and failed in ISTEA, and we will have to put in a minimum guarantee where all you do is pacify some 60 voters by giving them whatever they want in the percentage of the overall, and as to the rest, who cares; we have our 60 votes and we run.

That is not the way we did it this time. For that we have been punished. We have had people assail this bill when this is the first time it has been done right.

The formulas took into consideration many factors. I know others want to be heard. I don't want to use a lot of time. At an appropriate time, I am going to go over what went into these formulas. Fast-growing States, slow-growing States, donor States, donee States--all these factors were considered, and then we came up with a formula.

Sure, I heard the two Senators from Arizona were complaining they didn't think their State had enough and, at the same time, they were complaining we were spending too much on the bill. When we look at the formula, their State still gets $40 million more than my State of Oklahoma over 6 years. Any State can complain about how the formula comes out. The bottom line is every State gets a minimum of a 10- percent increase. The average is 35.6 percent.

It is a good bill. We are going to get cloture. We are going to move ahead. If there are germane amendments everyone agrees should be considered, we will consider them. I look forward to doing that. Cloture is important. We are going to get cloture and bring this step to a halt.

I suggest the absence of a quorum.

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

Mr. President, I know we have a couple of minutes remaining. This morning we have covered some of the arguments that have been made over the last 2 weeks. There are some aspects that have not been talked about. I do think we should compliment the Finance Committee. They have taken a lot of heat. They have taken a lot of criticism--unjustly, I might add. We made a request of them when we came up with this bill, at the figures we had in both capital outlay and obligation limitation. We asked Senator Baucus and Senator Grassley if they could come up with the amount of money to do this so it will comply with what the President outlined when he said he did not want a tax increase, he did not want to go into deficit or have it come out of the general fund, and they have done that. They have been criticized on this floor.

I do know this, that the highway trust fund has been raided for years, and we are now in a position where we can correct and rectify that problem. I think this is one of the good things that has come out of this bill, and I applaud the Finance Committee for the work they have done.

Mr. President, I raise a point of order that amendment No. 2311 is not germane.

Mr. President, I send a second-degree amendment to the desk and ask for its immediate consideration.

I will yield for 1 minute.

Madam President, I am going to withhold commenting on this amendment because I have made notes. I know it was not deliberately misrepresented, but the information is not accurate that we have heard on this amendment. It is very important that everyone know that, but I would rather have everyone vent everything they want to vent.

I wish to make one comment, first, though. The Senator from Nevada pointed out what we could have done with the six fastest growing States, the largest States. We could have lost six votes and never even looked back. That is exactly what happened 6 years ago. They went into a minimum guarantee program where they were counting votes. It was totally political and that is what we are getting away from. We have a good formula. I will defend that momentarily after we hear from everyone who is speaking in support of this flawed amendment.

Madam President, I ask the Senator from Texas, do you have others who want to speak on behalf of your amendment?

All right.

First of all, I recognize we are not objecting to a rollcall vote like some have been doing all week long.

I make a couple of comments about this because it has been inadvertently misrepresented. Let me talk a little bit about the States of Texas and Arizona. We have talked about this before. Arizona has a 40 percent growth rate, dramatically greater than the average, which is 35.6 percent. Arizona is comparable to Oklahoma in many ways. But Arizona actually gets $40 million more than my State of Oklahoma.

If we average that amount over TEA-21, it averaged $463 million. It goes up to $800 million at the end of this time and it reaches the donor status that is desired. In the State of Texas, the average over the 6-year period of TEA-21 was $2.1 million. It is the third highest growth rate in the Nation. It is the second highest amount of money, second only to California. It is part of the formula.

Let me say something about the formula. Everyone is deriding this formula. We went through the same thing 6 years ago. They did not like the formula because everyone wants to get something more than perhaps they are entitled to under any formula. That is human nature. We made a commitment, working on this formula for over a year, that we would stay with the formula. I am talking about a bipartisan bill, Democrats and Republicans on our committee.

When we looked at the factors--this is not just some States: let's see the big States and the little States and things like that--we covered a number of things: total lane miles on the interstate; the VMT, that is the vehicle miles traveled; the annual contributions to the highway trust fund attributed to commercial vehicles; the diesel fuel used on highways; the relative share of total cost to repair and replace deficient highway bridges--like in my State of Oklahoma, we are dead last in the Nation--weighted nonattainment and maintenance areas; rate of return of donor States, donee States, fast-growing States.

We have ceilings. We have floors. It is a very complicated formula. You don't come along at the eleventh hour and say, oh, we are going to change one thing and everyone is going to be happy because if you did that, then you are going to affect some other States in a way that is certainly not fair.

Now, let's just look at some of the arguments that have been made. The NAFTA corridor: Because of the insistence of one of the members of our committee, the junior Senator from Texas, Mr. Cornyn, we added $280 million--this goes to Texas--under the Borders Program. The IPAM Program, that has been ridiculed on the floor, is a program that takes projects that are ready for construction. These projects can start jobs immediately. You don't have to sit around and wait. That is why I am personally offended when people come along and say, well, let's have another extension. If we have another extension, none of this stuff gets done, none of the streamlining elements in this bill happen, which means we will not be able to do nearly as many roads per dollar as we can under this bill. That is why we are going to have, at the end of this thing, a 6-year bill. It is going to go to conference, and we are going to end up with a good bill. But we are not going to operate any longer on the extensions.

Now, I know there is politics involved in these things. We have tried to keep this at a minimum. If you look at TEA-21, it was dominated by the Northeastern States. You had several very important people on the committees.

Certainly, Congressman Shuster, over there from Pennsylvania--I served for 8 years with him on that House committee--and, yes, they got up to a very large amount in TEA-21: $1.21 return for every $1 they paid in.

Senator Moynihan--we all loved Senator Moynihan--he had a lot of influence on the committee. New York, as a result of that influence, I believe, got $1.25 back for every $1 they paid in.

Certainly, our beloved John Chafee from Rhode Island did his best work. They ended up with $2.16 for every $1 they paid in.

Montana--Senator Baucus was actually the ranking member of both the committee and the Subcommittee on Transportation and Infrastructure-- $2.18. Now, there are reasons for this, of course, because they do not have a lot of people paying up there. But you have to have roads. You have to get through Montana. You have to get through the Western States.

My State of Oklahoma--and I was on the committee, and I was on the conference committee--90.5 cents.

We have done a job here in really helping people out. But I want to point out the most important part of this program. Everyone who stood up and talked about this new formula has talked about how everyone is going to get a little bit more. Let's stop and think about that. That is going to cost money, isn't it? I do not think there is a person who is supporting this bill who did not first come down to the floor and complain that we are spending too much money in this bill, that $255 billion is too much--and you add the transit on there--it is too much money.

This amendment will increase the cost of this bill by $7.25 billion. If you want to increase the cost, if you want to go tell the White House, ``No, we didn't like the $255 billion so we are going to raise it up to $262.25 billion,'' go ahead and do it. I don't think you would be very well received. The

money has to come from someplace. It is coming from IPAM. Quite frankly, I am not going to stand here and accept and support a change in the formula that increases the cost by $7.25 billion. It is totally unreasonable, and after a year we are not going to do it.

I say to the Senator, do you want me to yield for a question?

I am through, Madam President.

I want to reemphasize this amendment costs $7.25 billion more, and people have to understand that.

Several Senators addressed the Chair.

Madam President, we have discussed the formula, which is what the Senator from Texas has been discussing in the last couple minutes. I want everybody to know, this is 7.25 billion new dollars, new spending under this formula. If you vote for this, you are voting to increase the authorized level by $7.25 billion.

If you look at the pending bill, it says: Under the IPAM Program, under section 139 of that title, $2 billion for fiscal year 2004 and nothing thereafter. If you look at the amendment, it says:

$2,000,000,000 for each of fiscal years 2004 and 2005. . .

.

That is $4 billion, plus:

$1,750,000,000 for each of fiscal years 2006, 2007, and

2008.

You add it up, and that is $9.25 billion, $7.25 billion more than the pending bill. Everyone has to understand that. When you vote for this, you are voting to increase the spending under this bill.

First of all, the pending substitute has been available for 2\1/2\ days now. Everything is in there. We dropped IPAM down to $2 billion. You want to increase it to $9.25 billion. That is an increase of $7.25 billion. It has been down there. We all looked at the pending substitute. We read it. We have been debating it now for 2 days. It is an increase of 2.5.

Madam President, I withdraw my pending amendment so the Senator may have her up-or-down vote.

Mr. President, I was gone during part of the discussion on this issue. I would like to reemphasize a couple points. First of all, when we talk about 40 percent or 43 percent, we are talking about over a 6-year period. Generally we are in the mindset of talking about from year to year down here, and there are people walking around thinking we are talking about a 40-percent increase. We are talking about, if you would amortize it and put it the way we normally discuss things, 6.2 percent a year. This is in infrastructure, things you see out there. I think people need to understand that.

Secondly, those of us who were in the business of putting together this bill over the last year, along with its formula and everything else that is being criticized, considered all these things. Then we went, as we should, to the Finance Committee and said: All right, how are we going to pay for this? And, yes, we can do it. I do not want to get inside the minds of Senator Grassley and Senator Baucus as to what considerations they were making during this time, but I will say this, they are the guys who are running the Finance Committee.

They have said this bill is going to be paid for. They have said the three criterion the administration sent down some time ago--that, No. 1, it would not increase gas taxes; No. 2, it would not have any fun- and-games type of bonding fixes; and, No. 3, it would not add to the deficit--is met.

There are 100 people in this Chamber, and I know there can be any number of them who are going to disagree. But I believe if we take this to the committees that have the jurisdiction, have the expertise, have the resources, have the personnel, have the staffers who can put these things together, that is the place it should be, and they have given us the assurance this bill will be paid for.

We just had a vote today. We defeated an amendment that would have increased the amount of money by $7.25 billion in this bill. In other words, the transportation portion of this, the highway portion of this, would go up from $255 billion to $262.25 billion. I think a lot of people who voted in favor of that amendment are the same ones who are talking now about the fact this is too much.

I know we have the genuine division of interpretations as to what the Finance Committee did and how this thing is really going to be paid for. But I have often said--in fact, I said to the administration that, to me, instead of coming down and saying this bill is going to have to be $50 billion less, I would think they would be better off to say: So long as the bill is paid for, does not add to the deficit, does not increase taxes, then we would support it, we would not veto it. I am hoping before this thing is over that is where we will be.

Let's keep in mind one other thing, too. We are sending a bill to conference. In conference all kinds of things happen. I had occasion to speak with the Speaker of the House at length yesterday. We understand when it gets into conference we are going to be able to look at this and take everything into consideration. At that point, we will be able to really evaluate this finance package and see where we are. There is no one out there who is going to say: I want deficit spending. I do not. That has never been my philosophy. I think the senior Senator from Oklahoma has known me well for many years, and he has heard me say for many years that we, who are fiscal conservatives, are big spenders in two particular areas: One is in national defense and the other is in infrastructure.

As I have heard different individuals such as from Arizona and Texas, I am reminded of what happened during the Thanksgiving holidays and the Christmas holidays. We are used to this in Oklahoma. I can remember someone saying: Well, I came from California. As I came across Arizona, they had such great roads. I came across Texas and everything was great. I sure could tell when I got to Oklahoma. They had lousy roads. That is what we have been plagued with for a long time. Our bridges in the State of Oklahoma are dead last of the 50 States.

This is a spending bill that is paid for. It does not increase the deficit, in the opinion of the Finance Committee. I take their word for it, and I know others may not. For that reason I know this discussion is good, but we need to move along.

We are going to be moving along. There is much more cooperation on the floor now. I have to say, this has not been a partisan fight. This has been something where there are honest philosophic disagreements.

I yield the floor.