Increasing the statutory limit on the public debt.

Mr. President, I yield 15 minutes to the Senator from New Jersey.

Mr. President, I yield myself as much time as I consume.

Thomas Jefferson once wrote:

It is incumbent on every generation to pay its own debt as

it goes.

That is what today's debate is about. Will this generation pay its own debt as it goes or will this generation choose to shift the burden of paying for our consumption to our children and our grandchildren? Will this generation take responsibility for its own appetites or will this generation rob from the mouths of our children and our grandchildren?

This question defines the very line between responsibility and irresponsibility.

Today we debate legislation to memorialize the shifting of that burden to our children. Today we debate raising the Government's borrowing by $781 billion. That is more than three-quarters of a trillion dollars for 1 year. This follows on the heels of an increase of $800 billion in November of 2004, less than 1\1/2\ years ago. That followed an increase of $984 billion in May of 2003, less than 1\1/2\ years before that. That followed an increase of $450 billion in June of 2002, less than a year before that.

This is the fourth time we have had to raise the debt ceiling in the 5 years of this administration. In contrast, prior to that the Government did not need to raise the debt ceiling for about 5 years. Moreover, as this chart shows, the cumulative increase during the 5 years of this administration has been a mammoth $3 trillion. That is the definition of irresponsibility.

Look at this chart. In 2002 the debt limit increase is $450 billion; 2003, $984 billion; 2004, $800 billion; 2006, $781 billion. That totals over $3 trillion; that is a $3 trillion increase in just over the last 5 years.

Look back at our history. What about American history prior to 5 years ago? The debt of the United States did not hit $3 trillion until 1990, a full 200 years after this country was founded. Now we have accumulated $3 trillion in new debt in just 5 years. That is the definition of irresponsibility.

This debt increase will be the fourth largest debt increase in the history of our country. This chart shows the size of debt increases. As you can see from this chart, the record for a debt ceiling increase was $984 billion. That was in 2003. We can see it on the chart. The second highest record was $915 billion. That occurred in November of 1990. That is this big spike. The third largest increase was in 2004 when we raised the debt ceiling by $800 billion. That is not far from today's request, which is to increase it by $781 billion.

During the time this administration has been in office--let's look at it from a little different perspective--the debt has gone up by about $10,000 for every man, woman, and child in America. Consider that. During the time this administration has been in office, the national debt has gone up by $10,000 for every man, woman, and child in America. For a family of four, that is an increase of $40,000 over the last 4 years. That is more than most Americans pay for a car.

It is bad enough we have accumulated so much new debt during the 5 years of this administration, but there is a big difference between the debt increase during this period and the debt before. Before, most of the debt purchased from the U.S. Treasury was purchased by U.S. citizens and institutions.

Let me repeat that. Up to 4 years ago, most debt was purchased by Americans and American institutions. At least the interest we paid on that debt, therefore, was paid to Americans. The wealth stayed in our country. That was up until about 4 years ago.

It has changed. That is no longer the case. During the 1-year period--get this. You will be stunned by this next fact. During the 1- year period between December 2004 and December 2005, foreigners purchased 96 percent of the new debt held by the public. Almost all of the debt purchased in that 1-year period, December 2004 to December 2005, was purchased by foreigners, almost all of it; 96 percent of it in 1 year, the last year.

Foreign citizens, foreign banks, foreign central banks, and other foreign institutions bought this debt. Not Americans, foreigners. The amount of public debt held by foreigners has doubled during the time that this administration has been in office; that is, just last year almost all of it. But when you add it with the prior years, now it has doubled since this administration has been in office. The interest on that debt is being siphoned out of our country. The foreigners buy the debt and the interest on that debt. Where does it go? The interest goes to those who own the debt--not Americans, people overseas.

What is the consequence of that? That makes us less wealthy and it means the standard of living of our children and grandchildren will be lower than it ought to be. That is the definition of irresponsibility.

The problem is not confined to our future standard of living. The problem is also today. Some of the foreign holdings of debt are in the hands of foreign central banks. Japan holds two-thirds of a trillion dollars of U.S. debt. China holds over a quarter of a trillion dollars of U.S. debt. Undoubtedly, the governments of these two countries hold a substantial portion of that debt. These large holdings of Treasury debts by foreign central banks are a risk to our homeland security and our economic security.

Does anybody ask why is that? Suppose the President of the United States thinks another country is jeopardizing American security. Suppose--it could happen--the President would like to tell that country that America would take action against it if it did not eliminate the threat to America. But if that country's central bank held a large amount of our Treasury debt, that country could threaten to sell it quickly. That sale would drive up U.S. interest rates and cause the dollar to fall. That could cause a recession in America. I am not saying a foreign central bank would do that off the top, but it would hint it might. It doesn't have to sell it all off, just a little bit. But that clearly shifts the power over to that central bank from the United States. As a result, the President might have to back down because of threats or insinuations, and so America would therefore be at a greater risk.

In the same vein, suppose the United States is involved in a trade dispute with a foreign country. It happens. If that foreign country's central bank held a lot of our debt, that country could threaten to sell that debt and force America to back down from its position on a trade dispute. America could be weaker in trade as a result. You could, obviously, apply that to almost any situation--not just trade or security but a whole host of areas where the United States has an interest with certain countries overseas.

At a recent Council on Foreign Relations event, Stephen Roach of Morgan Stanley put the risk in concrete terms. He said:

For a country that is more dependent on foreign capital

than any country has ever been in the history of the world--

for us to try to dictate the terms on which that capital is

provided telling Dubai, for example, you know, ``You can't

buy our port facilities but keep on buying our Treasurys;''

and you keep telling China basically the same thing, I really

worry about the potentially dangerous path our elected

leaders are taking us down.

The bottom line is simple. These massive increases in debt harm America. They are the very definition of irresponsibility.

How did we get to this point? The Federal budget deficits drive up our debt, and these deficits have been huge during this administration. When this administration took office we were running large budget surpluses. Do you remember those days, not too many years ago? A $5.6 trillion surplus over the next 10 years was the projection back before the year 2000.

In fiscal year 2000, the last year of the previous administration, we ran a surplus of $236 billion just for that 1 year. We ran a surplus of $86 billion even without counting Social Security. By fiscal year 2001, the surplus, counting Social Security, had dropped to

$128 billion, down from $236 billion in the prior year.

Then the tide of red ink began to flow. In fiscal year 2002 the Government ran a deficit of $158 billion. The following year, fiscal 2003, the Government ran a budget deficit of $375 billion. That was an all-time record just as recently as 2003. Think what happened a few years since. That record lasted just 1 year. The next fiscal year, 2004, the Government set a new record by running a deficit of $413 billion. The following year, fiscal year 2005, the Government ran a deficit of $319 billion. That was not a record, but it was still larger than the deficits run in any year before this administration took office.

In the current year, the deficit will go up again. The administration predicts the deficit will rise to $423 billion. This will represent yet another all-time record.

The fiscal policy of this administration has been the most irresponsible in the Nation's history. This fiscal policy has generated huge budget deficits, and in turn these deficits have contributed to massive increases in Federal debt. We clearly need to change course.

Let us, therefore, return to the advice that Thomas Jefferson gave us. I repeat:

It is incumbent on every generation to pay its own debt as

it goes.

Let us return to a fiscal policy that could be defined as responsible.

Amendment No. 3131

Mr. President, I am now going to speak a little bit on an amendment I am offering on which we will vote, I suppose, tomorrow. I send that amendment to the desk.

I ask unanimous consent the reading of the amendment be dispensed with.

Mr. President, this amendment is quite simple. It directs the Treasury Department to study and report on the increase of foreign holdings of U.S. debt and what the consequences of that debt are for America. We all know that debts can add up. We all know that paying just the minimum payment on a credit card balance leads to years of payments and a much larger total of payments in the end. Most American families know that.

As a result, we urge and sometimes require credit card companies and car companies to disclose to customers how long they will be paying those minimum payments. We require them to say how much the full balance will be when the consumer has paid off the loan. It is pretty basic stuff.

This amendment is a lot like that. This amendment asks the Treasury Department to spell out the implications of our debt to foreigners. This amendment asks the Treasury to investigate what the full cost will be in higher interest rates, in the value of a dollar, in lower economic growth, in lessened power to negotiate trade agreements, and in diminished national security. We should let taxpayers know--that is our employers, the people we work for--how big the payment really is. This amendment will help get the answers.

The Treasury is authorized to issue debt totaling a little more than $8 trillion. Last year's budget resolution generated an increase of $781 billion more, and that has led to the joint resolution before us today. This will be the fourth largest debt limit increase in our Nation's history.

So the question needs to be asked: Who is loaning us this money? Some of it is internal, like borrowing from Social Security. Much of it is borrowed from American citizens and businesses. Now there is also an especially worrisome trend, a trend worrisome not only to me and my constituents in the State of Montana but also taxpayers across the country. That is the amount of U.S. Treasury bonds held by foreigners.

Five years ago, foreigners held about $1.1 trillion. Today that number has doubled to $2.2 trillion. Japan holds about two-thirds of a trillion dollars; China holds a quarter of a trillion dollars. So the questions that inevitably follow are, first, how long can we continue to borrow more money? Second, what are the implications to our foreign policy as foreigners increase their holdings of U.S. debt? And, third, what share of America's taxes are being used just to pay interest on debt?

These are some of the issues we should debate today. These are some of the issues addressed in my amendment.

Every business has limits on the amount it can borrow. Banks say to businesses: Sorry, this is your loan limit. Financial institutions limit the amount that any individual or family may borrow. Every credit card has a maximum balance.

As a business or a family increases its debt, lending institutions begin to monitor the situation. Creditors even increase the interest rate charged on the debt.

At some point, America will face this economic reality. We cannot continue to accelerate our borrowing and ignore the consequences of increasing foreign held debt.

As one conservative economist put it last year in the National Review: ``Growing nervousness in the bond market may be signaling an end to the free lunch Americans have enjoyed for the last 3 years, in which time foreigners have essentially financed our budget deficit.''

Indeed, we cannot count on that free lunch forever.

So I am offering a simple amendment. It directs the Treasury Department to coordinate with appropriate Government agencies to study and report on the increase of foreign holdings of U.S. debt. The amendment asks Treasury to study any associated national security implications. The amendment also asks the Treasury Department to assess how this increase in foreign investment of our federal debt affects our trade policy.

Do we want to put ourselves in the potentially precarious position of engaging in diplomacy with our Nation's creditors? What happens if those foreign central banks and foreign investors suddenly started selling their holdings of U.S. securities? Interest rates could rise dramatically. A recession could result.

I bet that American manufacturers would like to know the answer to some of these questions. Next month, the Treasury Department is expected to rule on whether China is deliberately manipulating its currency in an effort to gain an unfair trade advantage. American businesses are awaiting this decision. But they would also like to know how any action on that decision might be affected by the level of our foreign debt.

Five years ago, foreigners held about $1.1 trillion in U.S. debt. Today that number has doubled to $2.2 trillion.

Last year, Federal debt held by the public increased by $297 billion. And the amount of public Federal debt held by foreign investors increased by $286 billion.

I have said it before and I will say it again: It is a riveting statistic. Foreign investors financed 96 percent of our Federal debt last year. Almost all of it last year was financed by foreigners--not by Americans but by foreigners.

We need to understand this change. This study will provide important information on this topic.

The answers to these questions will help us to evaluate foreign purchases of American assets. The data thus far is quite startling. According to a report from the nonpartisan Congressional Research Service, in 1995, net foreign investment in America was about 1.2 percent of our economic output. In 2005, net foreign investment was roughly 6 percent of GDP. That's an increase of 400 percent in just 10 years.

And we have just learned that our current account deficit for 2005 was the largest ever: $805 billion. As a percent of the economy, it was also a record, at 6.4 percent.

That type of increase reflects the attractiveness of our national economy to foreign investors. But I think that we need to better understand what this means for our economy and our national security.

Both sides of the Capitol, and many of our constituents, have spent a great deal of time over the last few weeks debating the effect of purchases or control of critical American infrastructure assets by foreign entities. It is time that we get all the facts out on the table. And this study will surely aid in this effort.

And this amendment asks Treasury to evaluate how the increase of foreign-held debt affects taxpayers. Last year, Americans paid about $85 billion in interest payments on this foreign debt alone. This year, in 2006, that amount will likely increase to about $100 billion. And it will increase again in 2007.

That is again the amount in interest payments on foreign debt alone, $85 billion last year. This year, in 2006, that amount will likely increase to $100 billion. And it will increase again next year in 2007.

Since we collect about $2.5 billion a day from income taxes, this year taxpayers will be working and paying taxes for almost 2 months just to pay off those interest payments on foreign debt. Think of that. Let me say that again.

Since we collect about $2.5 billion a day from income taxes, this year taxpayers will be working and paying taxes for almost 2 months just to pay off those interest payments on foreign debt. That is not paying off the principal. That is just paying the interest. Americans will pay 2 months of taxes to service the debt we owe to foreigners.

I urge my colleagues to join me in supporting this amendment. We simply ask for more information, more disclosure, and more transparency relating to our federal debt. As guardians of the Federal budget, we should not be afraid to confront the facts and deal with them accordingly.

Consumers should know the full cost of buying that car when they sign on the dotted line. Well, today, on behalf of the American taxpayer, the Senate is being asked to sign on the dotted line for the borrowing that the Government has done. The American people deserve full disclosure of the consequences.

I yield the floor and suggest the absence of a quorum.

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

Mr. President, nearly 50 years ago I, like the rest of the world, was mesmerized by a small metal sphere, no bigger than a basketball, no heavier than I or most of us.

Hurtling through space at the speed of sound--I don't think it was faster than that, it goes about 18,000 miles an hour--this steel ball was Sputnik, the world's first satellite to circle the earth--in 98 minutes flat. It was a technological feat of the Soviet Union. Nikita Krushchev, the Soviet leader, had been intent on proving the Soviet Union's scientific superiority. He proved it that day in October 1957.

News of Sputnik caught Americans off guard. We had been convinced of our own superiority, but here was undeniable evidence that others were leading the way. And of all people, it was the Soviet Union.

Now we could only follow. We had been lulled into a slumber by past successes and had awoken to a harsh reality.

Other shocking Soviet achievements followed. In 1959, Luna 2 became the first space probe to hit the moon. In 1961, Soviet cosmonaut Yuri Gagarin became the first person to orbit the Earth.

But it was Sputnik that ultimately galvanized our great Nation. We came together to rediscover ourselves as a nation of thinkers, inventors, and dreamers. The shock of Sputnik caused us to not lower our expectations, but to raise them. Sputnik caused us to not ask less of ourselves but to demand more.

Four years after Sputnik, President Kennedy summoned the spirit of America to banish the ghost of Sputnik. Content to follow no longer, he set the highest goal imaginable. He declared:

We choose to go to the moon. We choose to go to the moon in

this decade and do the other things, not because they are

easy, but because they are hard, because that goal will serve

to organize and measure the best of our energies and skills,

because that challenge is one that we are willing to accept,

one we are unwilling to postpone, and one which we intend to

Win . . .

Eight years later, American astronauts Neil Armstrong, Edwin ``Buzz'' Aldrin and Michael Collins landed on the Moon. Armstrong became the first man to walk on the Moon.

America never looked back. To this day, America is peerless in space technology.

Today, America faces a challenge no less daunting than the Soviet- American space race. We face no rival state. We face no organized military menace.

Instead, we face a world more integrated, more interdependent, and more intensely competitive than ever in our history. We face an economy with fewer second chances. Smaller margins for error.

In this new world, it is our challenge to succeed, and to leave our children and grandchildren an economy that is better than the one we inherited from our parents; an economy not laden with debt but bursting with opportunity; an economy whose workers are increasingly productive, and whose finances are prudent; an economy that plants the seeds of innovation and education today, knowing that generations far in the future will harvest their bounty.

Our challenge is to create an economy in which universal health care coverage is its greatest asset, not its heaviest burden.

The records it sets will not be for trade and budget deficits, or interest paid to foreign lenders, but for prosperity, productivity and progress.

Its workers and companies will look to foreign shores with hope and ambition, not fear and trepidation.

It is an economy where the strong are just and the wealthy are generous. It is an economy where the weak are secure and the struggling are given a hand.

This challenge is far greater than that which America faced in 1957. To prevail, we must demand more creativity. We must summon more ambition. We must harness more resources.

Yet we do not have a Sputnik moment that captivates us and calls us to

action. No single moment crystallizes the urgency of action and the imperative of success. Today, we are still in August 1957--still complacent, still sure of our superiority.

What will be our ``Sputnik moment?''

Will our Sputnik moment come when our trade deficits break unimaginable records, and our foreign debt exceeds that of any modern industrial economy?

No, that moment has already passed.

Will our Sputnik moment come after we neglect our basic research programs for three decades, while our competitors pour funds into research and development and lure our labs to their shores?

No, that moment has already passed.

Will our Sputnik moment come when 45 million Americans have no health insurance, while those who are so lucky must pay more to receive less?

No, that moment too has come to pass.

Perhaps our Sputnik moment will come when China becomes the world's largest economy. That may be just 10 or 20 years away.

Perhaps our Sputnik moment will come when our foreign debt reaches such levels that each year, 2 percent of our Nation's income will go to paying interest on these loans. That may be fewer than 5 years away.

Let us not wait for our generation's Sputnik. Let us awaken from our complacency before we are shaken from it.

We must not act out of fear. But we must not fear to act.

Most of all, we must act as a nation for the good of the entire Nation. As President Kennedy said of his vision 40 years ago: ``In a very real sense, it will not be one man going to the moon . . . it will be an entire nation. For all of us must work to put him there . . .''

We must all work to improve our Nation's competitiveness, and I am working to do my part at every opportunity.

This week, I will introduce a number of amendments to the budget resolution that strengthen our economy at its very foundation and steel its every pillar.

These amendments will strengthen our ability to educate our children, so that they may enter the workforce filled with confidence and innovative ideas.

These amendments will foster innovative energy research that will make our children's world cleaner, safer, and more secure.

These amendments will restore our commitment to basic research and development, a commitment that has served us well in the past and will serve us well in the future.

These amendments will embrace technology to expand our access to quality healthcare, while making it more affordable, efficient, and accurate.

These amendments will help grow our nation's pool of savings, which can foster investment. Investment that makes our economy more productive and innovative.

Taken together, I hope that these amendments will create an economy that moves our Nation forward, and makes sure that no one is left behind.

I hope my colleagues will join me in supporting them. I think they are very important. I think they are critical and, frankly, I think if we don't pass these and similar amendments, we are passing on to our children and grandchildren an immense disservice.

I thank the Chair for listening.

I suggest the absence of a quorum.

Mr. President, might I urge our colleagues to try to help us move through this. If we don't get cooperation, we are going to be here until Saturday morning. If you lay out the number of amendments that are pending here, we are going to be here until Saturday morning. We urge colleagues, let's get these amendments done in 10 minutes. Please, colleagues who have amendments that don't have to be offered here, please withhold; otherwise, literally we are here until Saturday morning.

Amendment No. 3061

Mr. President, perhaps I can help put this in perspective. We have 110 amendments pending, with more amendments coming in every hour. We have just been called and asked to draft six more amendments in the last hour.

I hope people understand where this is headed. If we are going to have 16-minute votes and we are going to vote on another 110 amendments, we are going to be here until noon on Saturday. That is where this is all headed.

If we don't start getting cooperation from Members here to not offer amendments which they could offer somewhere else, and if we don't get some cooperation from Members on having votes that really last 10 minutes, I assure you we are going to be here all day Friday--first of all, late tomorrow night, we are going to be here all day Friday, we are going to be here late Friday night, and we are going to be here at noon on Saturday. Colleagues can choose. It is out of our control. We don't control this. Colleagues can decide whether we are going to have some reasonable outcome here or whether we will be here until Saturday noon.

Amendment No. 3054

We have no objection.

Senator Grassley's amendment is the next order in the queue.

I yield time to the Senator from Florida.

Mr. President, I hope colleagues understand that for this budget cycle we have lost time to a number of extraneous events which could not be helped. But it means we have less time than we have had in previous years.

I hope my colleagues understand that we have put the debt limit discussion in the middle of this.

We have had a number of other events, such as the joint session.

As a result, we have less time for amendments.

I beg the indulgence of colleagues in understanding that now the only way we can finish is if we have very tight time agreements tomorrow, and if we exercise discipline among ourselves in terms of the number of amendments that we offer. That is the only conceivable way we can finish by tomorrow night.

I urge colleagues to think very carefully about amendments which they might want to offer.

Yes, I would be happy to yield.

The debt limit request will be to raise the debt by nearly $800 billion--$781 billion.

The Senator makes a very good point. It is an indication that we keep adding debt on top of debt. Of course, this budget will add $3 trillion to the debt--more than $3 trillion over the next 5 years.

I think it is further confirmation that we are off track in terms of the fiscal policy of this country, and not a little off track--way off track.

Mr. President, it is important for colleagues to know what we are doing. We are going to go to vote-arama starting at 1:30 tomorrow afternoon. Prior to that time, we are going to have some time for additional amendments until the votes at 10:30. As the chairman has indicated, at 10:30 we will have votes on the debt limit. We will then have votes on the avian flu amendments that were put off from this evening. After those votes are concluded, we will go back to amendments until 1:30.

Now, what does that mean? That means we have very restricted time tomorrow morning. We have very restricted time after the votes tomorrow, until 1:30 for additional amendments. The only way people are going to get time is if they take very short time agreements. That is the only alternative we have.

Again, I explain to my colleagues, I apologize, but the fact is, our time for

budget discussion has been dramatically reduced this year because of extraneous events. It is just a fact. The debt limit was put into this, the joint session, these series of meetings that are important bipartisan meetings at the White House. The chairman would agree that we have had probably the most difficult time managing this budget because there is so much less time available this year.

I ask for colleagues to understand if they want time they are going to have to take very short time agreements tomorrow; otherwise, they will be in a vote-arama.

Again, I thank my colleagues for the great cooperation so many have shown throughout the day.

Mr. President, I suggest the absence of a quorum.

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

Mr. President, first of all, I thank the Chair.

Mr. President, we are now on the subject of raising the debt limit of our country by $781 billion. This is after we have already had, during this administration, repeated increases in the debt limit over and over and over again--during the first 5 years of this administration, raising the debt limit $3 trillion.

I have used this slide to make the point that I believe the debt is the threat. So much of the writing and so much of the commentary is about the deficit. But the deficit is going up much more slowly--even though it is at record levels--than the debt.

This year, they estimate the deficit will be $371 billion, but the debt will increase by $654 billion. When are we going to get serious about what is happening to our country? We are plunging deeper and deeper into debt, and increasingly, it is financed by foreigners.

I have to say, I have never been more concerned about the future fiscal strength of our Nation than I am today because we just seem to be in total denial. We seem to be so disconnected from reality. We keep on spending. We keep on cutting taxes. We keep running up the debt.

When the President came into office, here is what he told us. He said:

My budget pays down a record amount of national debt.

He said:

We will pay off $2 trillion of debt over the next decade.

That will be the largest debt reduction of any country, ever.

Then he went on to say something that I believe:

Future generations shouldn't be forced to pay back money

that we have borrowed. We owe this kind of responsibility to

our children and [our] grandchildren.

That is what the President said. He was going to have maximum paydown of the debt.

Well, that is not what happened. The President was wrong. Not only has there not been any paydown of debt, the debt has skyrocketed, as this chart shows.

The debt, at the end of the first year of this President's first term, was $5.8 trillion. The debt, at the end of this year, is going to be $8.6 trillion--$8.6 trillion--at the end of this fiscal year. If we adopt the budget that is before us, we will pile on another more than $3 trillion of debt over the next 5 years, winding up with a debt of $11.8 trillion.

Now, here is what has happened already during this administration.

From 1998 to 2001, we added no debt. In fact, we were paying down debt. Those were the ending years of the Clinton administration's time.

In 2002, under the President's policies, we added $450 billion to the debt limit. In 2003, we added $984 billion to the debt limit. In 2004, we added $800 billion to the debt limit. In 2006, now they are out here wanting to add another almost $800 billion to the debt limit.

These are not just numbers on a page. These are not just bars on a graph. These are not just charts. These are debts of our country that have to be paid back.

What is perhaps most stunning is the degree to which this debt is being increasingly financed by foreigners--foreign central banks, foreign investors.

I use this chart to make the point. It shows the pictures of 42 Presidents. These 42 Presidents took 224 years to run up $1 trillion of external debt--U.S. debt held by foreigners. This President has more than doubled that amount--much more than doubled that amount--in just 5 years.

The result of all this is we now owe Japan $668 billion. We owe China $260 billion. We owe the United Kingdom over $240 billion. We owe the Caribbean banking centers almost $100 billion. These numbers change from time to time because of money flows. South Korea, we owe over $60 billion.

So what. What does it matter that foreigners now hold almost half of U.S. debt? What difference does it make if we owe Japan $670 or $680 billion? So what.

Well, the ``so what'' is, when you owe somebody money, you have a different relationship to them than when they owe you money. We have gone from being the biggest creditor nation in the world--more countries owing us more money than any other country in the world--to now being the biggest debtor nation. We owe more money than any other country in the world, and by a big amount.

I just had representatives of the American automobile industry come to see me. They said: We have to get tough on Japan because they are manipulating their currency for advantage in selling their automobiles.

I said: Do you have any idea how much money we owe the Japanese?

They said: No. We have no idea.

I said: Well, we owe them over $660 billion.

How are we going to get tough with somebody we owe $660 billion?

Earlier I had a group of business leaders come to me and tell me: We have to get tough with China because they are manipulating their currency for advantage in international markets. I asked them: How much do you think we owe the Chinese? They did not know. I told them we owe them over $250 billion.

How are we going to get tough with China when we owe them all this money? What would we do if all of a sudden they did not show up to buy our debt because now every time we have an auction, most of it is going to foreign entities. That is how we are floating this boat. We are mortgaging the future. That is what we are doing. Does that make America stronger or does that make America weaker?

A number of weeks ago, the President had a small group of us over-- Senators--to talk about energy. He reminded us that in his State of the Union Address he said America is addicted to oil. And he turned to me and said: That's pretty good for a guy from oil country to say that, don't you think?

And I said: Yes, I do, Mr. President. But I tell you, not only are we addicted to oil, we are also addicted to foreign capital. We are addicted to borrowing from countries all over the world.

This creates a vulnerability for our Nation because if these folks decide they are not going to keep lending us money, what would we have to do to attract the capital to finance these massive deficits, this massive debt? We would have to raise interest rates. That is what we would have to do, and perhaps precipitously. Then all these mortgages that are out here that are interest-only mortgages, all these mortgages that are adjustable rate mortgages, all these car loans, all these student loans, all these business loans, all these corporate financings--all of it--would go up, and go up sharply.

That is the great risk that is being run. It is a danger to our country. The Chairman of the Federal Reserve Board has said this is an unsustainable course. The Comptroller General of the United States has told us it is an unsustainable course. The head of the Congressional Budget Office has told us it is an unsustainable course. But we keep right on keeping on. There is no change. And sometimes you wonder: Does anybody care? Does anybody have the faintest notion of where this all heads?

Before us is a budget for the next 5 years, put before us by the President of the United States, and now passed by the Budget Committee in the Senate. Those who brought the budget before us say it is going to reduce the deficit. They show these red bars on this chart, and they say those red bars are getting smaller, the deficit is going down. Boy,

how I wish that were true. How I wish that were true. But it is not true.

This is what is really happening. They have left out things. They have left out war costs past 2007. They have understated the war cost in 2007 in addition to that. But the chairman, to his great credit, has added far beyond what the White House suggested in terms of war costs for 2007. He has made at least a serious effort to cover the war costs in 2007. There is no money past 2007.

There is no money past this year to fix the alternative minimum tax. Over the next 10 years, it costs a trillion dollars to fix. There is no money here past 2006. You put that back in, and then you put back into the calculation the money they are taking from the Social Security trust fund. Every year, they take from Social Security to pay other bills. It all has to be paid back. None of it is in the deficit calculation, but it all gets added to the debt.

When you add it all back, what you find is that when they say the deficit is going to go up $359 billion for fiscal year 2007, starting October 1, the debt is going up $680 billion; and the next year, the debt will go up $656 billion; and the next year, $635 billion; and the next year, $622 billion. And in 2011, it is going to go up $662 billion. And they are telling us everything is getting better? It is not getting better. It is getting a whole lot worse. That is the truth.

They have come tonight and asked us to raise the debt limit of this country another $781 billion. Over the next 5 years, they want to run up the debt by another $3.5 trillion. So at the end of that period, we have $11.8 trillion in debt. That is before the baby boomers retire. People may not know the exact numbers, but the American people have a lot of common sense. You can kind of reality test. We can't pay our bills now. We are nowhere close to paying our bills. And we are borrowing money from countries all over the world. We are borrowing money from the Caribbean banking centers. Anybody listening to me doing their banking down in the Caribbean? We owe them almost $100 billion.

I know we use so many numbers when we talk about a budget. A lot of people tune it out and say: I can't follow all the numbers. Just follow one number: The debt of our country has doubled. The debt of our country has doubled in this 10-year period. The first 5 years of the Bush administration and the next 5 where they are proposing the budgets, they are going to have doubled the debt of our country before the baby boomers retire. And almost half of this debt has been financed by foreigners. When we have a bond auction now, much more than half of it is being bought by foreigners. We are digging a hole that is so deep, it will take years to get out.

We just had this Dubai Ports deal. Everybody gets upset about the United Arab Emirates buying the terminals in six of our major ports. I thought it was unwise. But that is the logical conclusion to this fiscal policy and this trade policy. Because while we are running up the debt on the budget side by $600 billion a year and running trade deficits of more than $700 billion a year and we are financing it by borrowing from abroad, guess what. Foreigners are up to their gills in dollars. They are loaded to the gills with dollars. And what are they going to do with them? They are going to buy American assets.

Look at what has already happened to our ports. The vast majority are owned by foreign interests now. You might as well just put up a big for-sale sign on America and say: Come and get it, because we have not been able to restrain our spending and our appetite for debt and our unwillingness to tax ourselves to pay our bills. So what is the result? The result is runaway debt, increasingly financed by foreigners, and at the same time these trade deficits, which have the exact same effect, putting more and more dollars in the hands of more and more foreign entities. They have to do something with them. They can sit on them. They can hold them in their banks. They can invest them in U.S. stocks and bonds, which they are increasingly doing. And they can also just buy hard assets here.

We wonder about the Dubai Ports deal. Get ready. There are going to be a whole lot more deals like that coming because the world is awash in dollars, and we are buying much more than we are selling to foreigners. At the same time in our own budget, we are spending much more than we are taking in. As a result, we have to borrow, borrow, borrow.

The Comptroller General of the United States is the man who is given the responsibility to advise the Congress on the fiscal condition of the country. Here is what he said before the Senate Budget Committee:

Continuing on this unsustainable fiscal path will gradually

erode, if not suddenly damage, our economy, our standard of

living, and ultimately our national security.

It is that simple. It is that important.

Tonight we are going to make another fateful decision. Unfortunately, there is no alternative. We are going to have to pass this increase in the debt limit because the money has to be paid back. We have already borrowed it. We have already spent it. It is gone. Now the only question is, Are we going to pay the bill? There is no option. There is no alternative. If the United States failed to pay its debt, the value of our currency would plummet, interest rates would skyrocket, and our economy would tank. That is the hard fact.

This should be a wake-up call for every Member of the Senate, every Member of Congress, and a wake-up call for the President of the United States. The question is, Are we staying on this course to keep running up the debt, debt on top of debt, increasingly financed by foreigners, or are we going to change course? I hope with every fiber in my being that we change course because if we fail to do so, we will weaken the country immeasurably. We will threaten not only our economic security but our national security.

I thank the Chair, yield the floor, and suggest the absence of a quorum.

Mr. President, how much time does the Senator require?

I am happy to yield 10 minutes to the Senator from Michigan.

Mr. President, I thank the Senator from Michigan, who is such an exceptionally valuable member of the Budget Committee. She has been one of the strongest voices on the question of what are the priorities of the budget. Also she is a very strong voice for fiscal responsibility, recognizing that if we want to spend money, we have to pay for it. The Senator from Michigan has been a great leader on the Senate Budget Committee. I thank her so much for her contribution during the year, and again on the debate on the budget resolution this year.

While we are waiting for the chairman of the Finance Committee, who is being called off the floor momentarily, I want to remind colleagues of the circumstance we face tomorrow. If there are staffs listening or Members listening, we are still getting requests as though we had a lot of time left. We simply do not.

Tomorrow we are going to start at 9. We are going to be handling amendments that are in the queue until 10:30. At 10:30, we will start voting on amendments and we will vote on the debt matter and amendments to the debt resolution. When those have been dispensed with, we will then go back to the consideration of amendments until 1:30.

At 1:30, all time has been deemed to have been used up in the budget resolution debate. We will start a series of votes every 10 minutes. Right now, with the number of amendments pending, we now have 65 votes pending on this side alone. We know we can do 3 amendments an hour. If everybody sticks to their amendments, that is 22 hours of straight voting. That is just the amendments on our side. The other side has another 15 amendments. That is 80, so that is 27 hours of voting.

That is the situation we face. It is in the hands of the Members. Are people going to show restraint or are people going to insist on every amendment to be offered and voted on? I hope very much that we can convince colleagues to take very short time agreements tomorrow. I will not agree to any time agreement over 10 minutes tomorrow, period. Let me make that very clear. I hope we can get time agreements as short as 5 minutes before we get into vote-arama. When we get into vote-arama, understand that there will be 1 minute on a side.

So, again, I hope colleagues understand the circumstance we face. We have lost a tremendous amount of time to extraneous events--a joint session, meetings at the White House, and the debt limit debate put in the middle of this discussion. So that is the reality we face.

Last year, Lula Davis has just informed me, we started voting at 1:17 in the afternoon, and we voted until roughly 10 o'clock at night. Some of those votes were held every 5 minutes, and we handled over 20 amendments during that period. I think one can see if we have to try to do 80 amendments, we are going to be here a very long time.

With that, I thank the Chair and yield the floor.

Is the Senator from Oklahoma seeking recognition?

Mr. President, is there any time left on my side?

Mr. President, what the Secretary said was that this was a decision by the Congress. We are involved in that decision, a decision today to give the Secretary authority to do it if it needs to be done, and do it not until it needs to be done, rather than sending a signal that you can procrastinate again for another 6 months.

The Nelson amendment is the wrong idea at the wrong time. The amendment doesn't even provide the resources for enrolling people afterwards. We did in the amendment just adopted. How are we going to get people to enroll if the administration doesn't have the resources to do it? It is too early to make a decision, when we don't have final enrollment numbers yet. Right now enrollment is going very well. A quarter of a million people sign up every week. Many who are calling for delay in the enrollment deadline didn't support the legislation 2 or 3 years ago. They have admitted that. They have been encouraging citizens not to enroll. Extending the deadline until the end of the year is a cynical attempt to tell seniors not to enroll this year. The other side says May 15 is an arbitrary deadline. Americans live with deadlines every day.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, one of the things on this issue that is so misleading is the impression that this legislation does not allow Medicare to negotiate. The opposite is true.

This legislation requires negotiation. That is what the plans are doing all the time to drive down the price of drugs--what it does to drive down the price of the premium way below what we thought it would be. Again, everything is backward when they talk about this. In the real world, there are choices. Wherever you want to go for any consumer products, those stores negotiate prices to get good prices. It is just a way to get the job done. Statistics that have come in on this show that competition is driving down the price of drugs--the 25 leading drugs--by 35 percent on average this ought to show that this process is working.

Mr. President, in a debate earlier today, the senior Senator from North Dakota responded to my challenge to point out a new corporate loophole closer that is not included in the tax relief reconciliation conference.

The ranking Democratic member of the Budget Committee discussed a proposal developed by the Finance Committee Democratic staff that would repeal ``deferral'' for controlled foreign corporations doing business in tax haven countries.

I share the senior Senator from North Dakota's concerns about the ability of large corporations to manipulate the Tax Code to shift large amounts of profits offshore. But this provision isn't the right way to address those concerns. It is both overbroad and inadequate.

It is overbroad because it would harm the competitiveness of U.S. multinationals by repealing deferral for holding company structures that allow them to efficiently allocate active foreign-generated resources among their foreign operations without incurring U.S. tax on entirely foreign transactions.

It is inadequate because it applies only to subsidiaries in black- listed countries. Companies that use tax havens for abusive purposes could easily avoid this rule by locating in a low-tax country that is not on the list, like Ireland, where we have read press reports that companies are shifting huge profits. Treasury would have authority to add countries to the list, but does anyone think Ireland, with whom we have a tax treaty, would be added to a black list?

The way to deal with those cases is through effective transfer pricing policy and enforcement, not by curtailing deferral.

This proposal was included in the Democratic alternative to the Finance Committee bipartisan tax relief plan. When we considered the House tax relief reconciliation bill, the Democratic alternative was defeated.

Even if the tax haven proposal were viable in the Senate, it would yield only a fraction of the revenue needed to offset the cumulative effect of the many Democratic amendments to increase spending.

The effect of using such proposals, which aren't viable in the Senate, even if successful, would be to drive down the tax relief number.

The result of a lower net tax relief number is that we would lack the necessary tax relief in the budget to accommodate tax relief proposals supported on both sides of the aisle.

Mr. President, the issue of the increase in the debt limit has come before the Senate as an agreement between the two leaders, and as the committee of jurisdiction, as chairman of the Finance Committee, I speak in support of House Joint Resolution 47, a bill that increases the Federal debt limit. I support this increase because it is necessary to preserve the full faith and credit of the Government. Without an increase in the debt limit, our Government will face a choice that we should not make and we would not want to make: a choice between breaking the law by exceeding the statutory debt limit or breaking faith with the public by defaulting on our debt. I hope everyone would agree that neither choice is acceptable.

To understand why we are here today seeking to increase the debt limit, it is necessary to explain a few points about the Federal debt.

Under current law, there is a statutory limit on the amount of debt that can be issued by the Federal Government. This limit, which now stands at $8.184 trillion, applies to virtually all the debt issued by the Government. There is only one debt limit, but there are, in fact, two types of debt within that figure: debt held by the public--meaning you and I as private citizens buying Government bonds, owning Treasury bills--and then, of course, on the other hand, the debt held by various Government trust funds. An example would be the surplus that is invested in the Social Security surplus payroll that is not being paid out for benefits, being invested in Government debt with that debt owed to the trust fund with the interest accumulating to the trust fund.

The amount of Federal debt held by the public is determined by the Government's annual cash flow. When total spending exceeds total taxes, the Government has a budget deficit. To finance this deficit, the Government borrows from the public by selling debt, such as Treasury bills, Treasury notes, and Treasury bonds. We will hear a lot of criticism that President Bush's tax cuts are responsible for our rising public debt, but the facts show otherwise.

When President Bush took office in 2001, the Federal debt limit was $5.95 trillion, almost $6 trillion. The debt limit was increased to $6.4 trillion in 2002, $7.3 trillion in 2003, and now the present $8.1 trillion in 2005.

Assuming we increase the debt limit today, it will be $8.965 trillion. Thus, the Federal debt limit will have increased by $3.015 trillion since President Bush took office in 2001.

However, the tax cuts that have been enacted since 2001 total roughly $900 billion through the end of the most recent fiscal year. That includes interest costs as well. Thus, the President's tax cuts account for about 30 percent of the increase in the Federal debt. The rest of this increase in the public debt is due to the recession, the war in Iraq, and the increased spending on homeland security, also related to the war on terror.

In addition to the debt held by the public, the Federal debt limit also applies, as I said before, to the debt held by various Government trust funds, such as Social Security and Medicare. Whenever a trust fund program collects more than it spends, the surplus is invested in special issue Treasury securities. These special securities count toward the debt limit. However, it is important to understand that the amount of debt held by the trust funds does not reflect the Government's unfunded obligations.

For example, the Treasury Department reports that the total amount of Federal debt held by all the trust fund programs is about $3.5 trillion. However, the Social Security and Medicare trustees report that the unfunded obligation of Social Security and Medicare is more than $81 trillion.

Given these facts, it should be obvious to everyone that the Federal debt provides a misleading and inaccurate picture of the Government's future liabilities. Efforts to use the statutory debt limit to control Government debt and deficits cannot succeed because it ignores the long-term budget problems.

Indeed, even former Federal Reserve Chairman Greenspan has suggested the debt limit has outlived its usefulness and should be replaced with a more accurate and useful alternative. I would welcome the opportunity to work with my colleagues to develop such an alternative. It may never happen, but it ought to happen. This is not quite a very intellectual way to decide what the Government is doing in a fiscal way because, quite obviously, every day Congress is appropriating money and every day we are spending money and every day if that exceeds the taxes that are coming in and we get to the debt limit, the debt is going to increase or is going to shut down the Government.

As a Republican, that was part of our strategy during the Clinton administration. But let me tell you, it didn't work. It didn't work because it wasn't good policy, and it ended up not being very good politics. I hope we do not have an extended debate and a lot of breast beating about the issue of increasing the national debt because, quite frankly, if we spend and we spend up to that limit, we are not going to shut down the Government, if we learned the lesson, as I hope I learned the lesson, and we move on. It ought to be very pro forma.

There will be a lot of debate about it, a lot of political points trying to be made, but the point is we have to keep the business of Government going. I would relish the opportunities to have those days when we paid down $550 billion on the national debt during the fiscal years of, I think, 1997, 1998, 1999, and 2000, I believe it was. It was about $558 billion I believe that we paid down on the national debt. I am glad we did. But now we have the war on terror, we had 3,000 Americans killed in New York City because of terrorist attacks, and we are fighting a war to make sure terrorism doesn't happen again, at least on the soil in the United States of America.

The No. 1 obligation of our Government under the Constitution is for the national defense. Protecting our people from further terrorist attacks is very basic to it. We voted, in a bipartisan way, to send men and women to the battlefield in Afghanistan and Iraq, and if we do that, we have an obligation to appropriate the money to give them the tools to do the job when they put their life on the line for our freedom and our liberty and to make sure that 3,000 Americans don't get killed again. These all create situations wherein we have annual debt or annual deficits, and you increase the national debt on a cumulative basis when you do that. So there will probably be almost 50 votes, maybe, against this resolution when we vote on it tomorrow. I would ask the people who vote against it, do you want to shut down Government? Or if you don't want to shut down Government, you don't want to increase the national debt, why did you vote for the money we spent that brings us to the point of a necessity of increasing the national debt? We should pass this resolution for the sound operation of our Government. Shutting down Government, we found out, ended up costing the taxpayers more than if Government had operated.

There are a lot of conservatives listening who see a conservative like Chuck Grassley saying that, and they say: Grassley, what planet did you come from? If we shut down Government, you ought to save money. But we didn't end up saving money. So you learn from history, or you are destined to repeat it. That is why this ought to pass unanimously. It won't, but it ought to.

I yield the floor.

Mr. President, the spending process in the Congress is broken. Some will argue that now is not the time to debate spending reform or budget reform. They will say that now is not the time to have a debate about our country's spending priorities. They will argue that right now we need to just ``pay our bills'' for past transactions and discuss reforms some time in the future. Raising the debt limit, however, does not count as ``paying the bills.'' We are not paying our bills.

Last fiscal year, the real Federal deficit--the amount by which the Federal debt increased--was $538 billion. When we raise the debt limit, we are not ``paying our bills.'' We are merely taking out another line of credit--another loan--to allow for more spending that we can't afford. It is akin to a deeply indebted family getting a loan for a new car or getting a new credit card or line of credit without cutting up the old credit cards that got them in trouble in the first place.

According to the Congressional Budget Office, the Federal Government spent roughly $2.5 trillion during the last fiscal year. Let's look at that amount of spending another way. If the Federal Government spent $2.5 trillion last year, that means that on average, $6.8 billion was spent each day, or $78,418 was spent per second by the Federal Government.

I believe that it is absolutely necessary to have an open and honest debate about our spending priorities. We are getting ready to increase this country's debt limit to almost $9 trillion. Over the past 5 years, our national debt has increased by $3 trillion, or nearly $9,000 per American. That is a lot of money. In 1990, our total national debt was about $3 trillion. That means that it took our country more than 200 years to accumulate that amount of debt--200 years to increase our debt by $3 trillion. We just added that much new debt in only 5 years.

In 2001, the share of Federal debt per person in this country was a little over $20,000. That includes everyone--not just those in the workforce. According to the Office of Management and Budget and the Census Bureau, total Federal debt per American will rise to $29,000 per American by the end of 2006. That is an increase of $9,000 per man, woman, and child in this country since 2001. But a lot of people are quick to dismiss that figure. They will say that it doesn't matter, that we only need to worry about how debt and deficits compare to economic growth or to the size of the economy. I think a better rule of thumb is how Government growth compares to the growth of wages and earnings.

If regular Americans are tightening their belts, the Federal Government should do the same instead of engaging in yet another spending binge. Since 2001, total Federal debt per American has increased by $9,000. But over that same time period, the average wages of American workers have only increased by $4,200. Over the past 5 years, the growth of Federal debt per person has doubled the growth of average wages of American workers. What makes this situation even worse is that that $9,000 increase in debt per person is just going to get bigger and bigger because we are not doing anything to cut spending or prepare for the impending fiscal crisis that will result from the retirement of the baby boomer generation. Interest on that debt is just going to get larger.

Last year, interest costs--the costs of Federal debt that the Government must pay to those who buy U.S. Treasury bonds--were about 8 percent of the total Federal budget. In contrast, the average American spends roughly 5 percent of his or her income on credit card debt and car loans according to the Federal Reserve. The Federal Government spent close to $200 billion on interest costs alone last year. According to the Government Accountability Office, or GAO, interest costs will consume 25 percent of the entire Federal budget by 2035. Let's put that figure into perspective. Twenty-five percent of the Federal budget is a huge amount.

By way of comparison, the Department of Education's share of Federal spending in 2005 was approximately 3 percent of all Federal spending. The Department of Health and Human Services was responsible for approximately 23 percent of all Federal spending. Spending by the Social Security Administration was responsible for about 20 percent of all Federal spending. Spending on Medicare was about 12 percent of all Federal spending. Spending in 2005 by the Department of Defense--in the midst of two wars in Iraq and Afghanistan and a global war against terrorism--comprised about 19 percent of all Federal spending. Thus, if we do not change our current spending habits, GAO estimates that as a percentage of Federal spending, interest costs in 2035 will be larger than defense costs today, Social Security costs today, Medicare costs today, and education costs today.

No family in America would ever be able to manage its finances this way. No family would be able to build up insane amounts of debt, unilaterally increase all of its credit card limits with no ability to ever pay them off, and still be able to spend, spend, spend without any accountability. We have some very serious problems to address regarding spending priorities in this country.

According to the Congressional Research Service, Congress appropriated $64 billion in earmarks for 2006, the current fiscal year. That doesn't even include the earmarks from the highway bill that was passed in 2005. We are going to spend $64 billion on earmarks and pork projects across the country this year even though it is estimated that the real Federal deficit--including the money that is regularly stolen from Social Security--will again surpass half a trillion dollars.

Earmarks are a serious problem because they put parochial interests ahead of national priorities. They put the interests of the next election ahead of the interests of the next generation. Some, however, argue that earmarks are not really a problem because they comprise a small percent of the budget. They argue that entitlement spending is the problem and that we ought to address that problem instead of focusing on earmarks. These arguments completely miss the point.

If entitlements are the real problem and earmarks are not a problem, then why did entitlement savings passed in the last budget resolution for fiscal year 2006 only amount to $5 billion? If entitlements are the real problem, why did we spend 13 times more money on earmarks last year than we saved in entitlement programs? At that rate, we will solve our country's fiscal problems some time after never. The budget resolution we passed last year created entitlement savings of about $40 billion over the next 5 years. We spent more on earmarks in 1 single year than we saved from entitlement programs over 5 years. Over the past 3 years--since 2004--we have spent nearly $160 billion on earmarks and special interest pork projects according to the Congressional Research Service.

Since 1994, the number of individual earmarks has more than tripled, increasing from 4,126 in 1994 to 12,852 in fiscal year 2006. Of those 12,852 earmarks, over 95 percent were not even included in bill language. Instead, they were hidden within conference reports. Many never even saw the light of day until they were snuck into unamendable conference reports that were sure to be rammed through at the last minute. Earmarking is a very serious problem that needs to be addressed before we can get our fiscal house in order. However, there are also other spending issues that this body should address.

The issue of improper payments by the Federal Government is one that

can and should be fixed. The subcommittee that I chair--the Subcommittee on Federal Financial Management--has examined this issue in depth. We have uncovered numerous examples of improper payments that waste taxpayer money and harm those who aren't receiving the assistance they need. An improper payment is basically a payment that was either made to the right person in the wrong amount or a payment that was given to the wrong person, regardless of the amount. Improper payments include payments that were too high and payments that were too low.

According to estimates by the Office of Management and Budget, improper payments last year totaled $37 billion. That figure is larger than last year's expenditures by the Departments of Commerce, Interior, State, and Environmental Protection Agency combined. The amount of improper payments just from last year could have completely funded four major Federal agencies. Improper payments are a very serious problem. For example, 28 percent of all payments within the earned income tax credit program are incorrectly made. Thus, for every dollar we spend in that program, 25 cents are completely wasted. Improper payments within the Social Security Administration totaled nearly $6 billion. And these figures don't even take into account the seven major programs with outlays totaling about $228 billion that are not yet even reporting their improper payments.

There are some who wish to make the issue of spending a partisan issue, but it is not a partisan issue. Members of both parties are guilty of putting short-term interests ahead of long-term priorities. Last week, Members of both parties voted to ignore Senate budget rules in order to spend an additional $1 billion that is not paid for on home-heating costs even though the month of January was the warmest on record and winter will be over in less than a week. Both parties appear to lack the political courage to make the hard choices to address our impending fiscal crisis. This issue has nothing to do with Republicans and nothing to do with Democrats--it has to do with what is best for the American public.

Mr. President, the spending process in this body is broken. Our priorities are completely out of whack. Earmarking and wasteful spending are out of control. It makes no sense to effectively max out our credit cards and ask for a higher credit limit when we have no intention and no ability to ever actually pay for our debts.

Mr. President, we are talking about a proposal that has no funding for it. You reach into the 920 barrel and there is nothing there, you can't come up with any money. But in the process, the Senator from Pennsylvania did acknowledge that the President's budget is way off line because now we are talking about $1.5 billion; whereas, otherwise, it is $500 million less. So while this bill is imperfect we do want to see Amtrak supported, and I hope that we will be able to resolve it in the appropriations process to get it to where it needs to be. But this amendment is not going to do it. It is half a loaf and, at this point, we have little choice.

Mr. President, I thank the Senator from Montana and commend him for his hard work on matters financial in the Senate and in our country. Fiscal responsibility is the watchword for the Senator from Montana, and I am grateful for his leadership. At the same time, I say to the distinguished Senator from Iowa, the chairman of the Finance Committee, he is someone who also works very hard to make us a responsible nation, and I respect him. Although we differ on things, the fact is that I listen carefully to what the Senator from Iowa has to say. He has a position of great responsibility, the chairman of one of the most important committees in the Senate, and carries that responsibility honorably; again, if I may say, at times wrongfully, but it is in the eyes of the beholder. But I know the Senator from Iowa understands that if there is any criticism of his views, it is not personal and has nothing to do with his credibility or his honor.

I listened very carefully to what the Senator from Iowa talked about. He talked about shutting down Government and he talked about providing security for our people, protecting them, making sure their lives continue in safety. But I don't get it. I have to tell you this: I don't get it. Because when issues came up such as when we needed more money for port security, we said no. When it came up that we needed more money for the Department of Homeland Security, we said: Well, we will give you some but not all you need. When it came to providing some developmental funds for technology that would help us examine containers coming into our ports, we were unwilling to do it.

So now what we hear is the lament that says: How can we shut down our Government? Well, we can avoid shutting it down by not extending tax cuts to the wealthiest among us, people who make millions and don't need any help. I meet these people, and they say: Yes, we don't need it, but what the heck, if it is there, we are going to take it.

But when you think about the outcome of this profligate spending we are seeing here and our deficit going through the roof--I heard one of our good friends from the other side talk about reducing our annual deficits. Well, they could be reduced a trifling amount, but if you look at the debt, that debt increases, that clock is ticking.

We have here an example of a credit card, and our credit card is running kind of over the limit. Right now, we are carrying an $8.2 trillion credit debt. That means if you borrow on credit, you have to pay it off. President Bush and his colleagues, the Republican Congress, are encouraging burdening our children and our grandchildren under a mountain of debt.

A lot of what we do around here is hidden in complicated budget rhetoric, but to put matters simply, this debt extension bill will increase President Bush's credit limit, the one he has established, by $781 billion. It will encourage this Republican Congress--they are the majority--to charge another $781 billion on our Nation's credit card.

Most Americans with credit cards know that you have to play by the credit card company's rules. People understand when they run up big bills they will be responsible to eventually pay up. Few people run up a giant credit card bill and then leave it for their children to pay. But that is what the Bush administration is doing, running up credit, and their kids will have to pay the bill.

Since President Bush took office, he has already increased the total Federal debt by 46 percent. He has added $2.5 trillion to the debt future generations will have to pay. So I say enough is enough. The President and the majority in the Congress have been far too reckless for far too long with our Nation's credit card. We see who the managers are of the legislation we considering here: the Republican majority. And they want to extend his credit limit. I say no way.

In my view, it is time to limit the credit. It is what most parents would do. What would you do as a parent if you had a kid, a child who was running up bills on your credit card, just running them up, higher and higher and higher, and you know you can't pay them off? So what would you do? Pat him on the head and say: Go spend more? No, you wouldn't do that at all. What you would do is cut up his credit card. And this is what we are going to do: cut up his credit card right here and now.

America can do better, leave a better legacy for our grandchildren and their children. Our consciences scream out

just as a family would at home: We are buried in debt; why do you want to add more to it? The response would be: Mom and dad, why do you do this to us? We have college debt from our years at the university. We have less reliability, less reliance on pension funds. They are not guaranteed anymore. We have less expectation that we can hold our jobs based on foreign competition, jobs that used to be done here in Washington, DC, and in my home State of New Jersey and States across this country, jobs that were held, and they were good-paying jobs. Now they come with an accent from India. There is nothing wrong with the accent, but there is something wrong with the place. Why should we be transferring decent jobs Americans can do and do well to India? Why? Because we pay maybe a tenth of what it costs us here. If someone makes $500 a week here, and in India they make 50 bucks, they will be feeling pretty good. So the result is that we are lowering living standards for Americans across this country, and these jobs will not be replaced.

I know something about balancing budgets. I ran a big company, a very large company; it now has 40,000 employees. We started with nothing. We worked hard. But we always balanced our budget. We had 42 years in a row with growth on the profit at 10 percent every year over the previous year, the longest record of any company in American history. That is the company I ran; it is called ADP, Automatic Data Processing. I was the founder.

Here in the Senate, I was the senior Democrat on the Budget Committee. We produced during those years the first balanced budget in 30 years. We did such a good job that when President Bush, President George W. Bush, took the oath of office, he was presented with the rosiest financial picture of any President ever in the history of our country. We had budget surpluses as far as the eye could see. In 2000, we had a budget surplus--surplus--and that is in the year 2000, 5 years ago, going on 6 years ago, we had a budget surplus of $236 billion. In 2001, when President Bush came into office, he had a surplus of $128 billion. We were ready to pay off our national debt by the end of his term. We were in the middle of the longest economic expansion in the history of our country. But the Republicans plunged blindly and recklessly into massive tax breaks, not for the middle class or poor, lower level income among us, but the wealthy, the special interests-- tax breaks that will cost $3.4 trillion if they are extended over the next decade. A third of that amount, more than $1 trillion, will go to the wealthiest of the wealthy, the top 1 percent.

This is what the Bush tax cuts will mean. If you make $1 million a year, you get an average tax cut of $136,000. That helps everybody out every year, I guess, if you need that. But if you make less than $20,000 a year, you get 19 bucks--$19 if you make $20,000 a year. Is that helping the people who are struggling with two jobs often, trying to balance their family obligations with their need to earn an income, having a babysitter intercede while dad comes home from work and mom doesn't yet go to hers? That is what is happening to a lot of people making $20,000 a year with two children in this society of ours--a $19 tax break. Don't spend it all in one place.

And to what end? The only thing President Bush and the Republican majority have accomplished is a doubling of our Nation's debt. If we continue on this path, our national debt will be $12 trillion by 2011.

Tomorrow we are going to vote on whether President Bush should be able to charge up another $781 billion on our credit card, the citizens' credit card, the national credit card. That is $781 billion more of debt. I hear from people I talk to who work for a living with kids in college, they are worried about their personal debt they have to have to get along, so we want to make their job twice as tough by adding more of the national debt on their shoulders. Would a bank keep extending the line of credit for a customer who didn't have a plan to pay his bills? Of course not. That is why I say to my colleagues that we should say to the American people: We really do stand for fiscal responsibility, and we really do want to reduce our deficit, and we really do want to cut back on that debt so we can look our children and grandchildren squarely in the face and say: We didn't add to your woes, we added to your opportunities.

So I urge my colleagues to tell the people the truth out there. Don't cover it up with arcane language. Let us put a stop to this reckless credit binge. Let's make President Bush's credit card useless and put our country back on the road to fiscal responsibility.

I yield the floor.