Margaret Thatcher Congressional Gold Medal Act

Mr. Speaker, I rise to address the House.

Mr. Speaker, I include for printing in the Congressional Record the staff report of the House Judiciary Committee Democratic staff entitled, ``Preserving Democracy: What Went Wrong in Ohio.''

Preserving Democracy: What Went Wrong in Ohio

executive summary

Representative John Conyers, Jr., the Ranking Democrat on

the House Judiciary Committee, asked the Democratic staff to

conduct an investigation into irregularities reported in the

Ohio presidential election and to prepare a Status Report

concerning the same prior to the Joint Meeting of Congress

scheduled for January 6, 2005, to receive and consider the

votes of the electoral college for president. The following

Report includes a brief chronology of the events; summarizes

the relevant background law; provides detailed findings

(including factual findings and legal analysis); and

describes various recommendations for acting on this Report

going forward.

We have found numerous, serious election irregularities in

the Ohio presidential election, which resulted in a

significant disenfranchisement of voters. Cumulatively, these

irregularities, which affected hundreds of thousands of votes

and voters in Ohio, raise grave doubts regarding whether it

can be said the Ohio electors selected on December 13, 2004,

were chosen in a manner that conforms to Ohio law, let alone

federal requirements and constitutional standards.

This report, therefore, makes three recommendations: (1)

consistent with the requirements of the United States

Constitution concerning the counting of electoral votes by

Congress and Federal law implementing these requirements,

there are ample grounds for challenging the electors from the

State of Ohio; (2) Congress should engage in further hearings

into the widespread irregularities reported in Ohio; we

believe the problems are serious enough to warrant the

appointment of a joint select Committee of the House and

Senate to investigate and report back to the Members; and (3)

Congress needs to enact election reform to restore our

people's trust in our democracy. These changes should include

putting in place more specific federal protections for

federal elections, particularly in the areas of audit

capability for electronic voting machines and casting and

counting of provisional ballots, as well as other needed

changes to federal and state election laws.

With regards to our factual finding, in brief, we find that

there were massive and unprecedented voter irregularities and

anomalies in Ohio. In many cases these irregularities were

caused by intentional misconduct and illegal behavior, much

of it involving Secretary of State J. Kenneth Blackwell, the

co-chair of the Bush-Cheney campaign in Ohio.

First, in the run up to election day, the following actions

by Mr. Blackwell, the Republican Party and election officials

disenfranchised hundreds of thousands of Ohio citizens,

predominantly minority and Democratic voters:

The misallocation of voting machines led to unprecedented

long lines that disenfranchised scores, if not hundreds of

thousands, of predominantly minority and Democratic voters.

This was illustrated by the fact that the Washington Post

reported that in Franklin County, ``27 of the 30 wards with

the most machines per registered voter showed majorities for

Bush. At the other end of the spectrum, six of the seven

wards with the fewest machines delivered large margins for

Kerry.'' Among other things, the conscious failure to

provide sufficient voting machinery violates the Ohio

Revised Code which requires the Boards of Elections to

``provide adequate facilities at each polling place for

conducting the election.''

Mr. Blackwell's decision to restrict provisional ballots

resulted in the disenfranchisement of tens, if not hundreds,

of thousands of voters, again predominantly minority and

Democratic voters. Mr. Blackwell's decision departed from

past Ohio law on provisional ballots, and there is no

evidence that a broader construction would have led to any

significant disruption at the polling places, and did not do

so in other states.

Mr. Blackwell's widely reviled decision to reject voter

registration applications based on paper weight may have

resulted in thousands of new voters not being registered in

time for the 2004 election.

The Ohio Republican Party's decision to engage in

preelection ``caging'' tactics, selectively targeting 35,000

predominantly minority voters for intimidation had a negative

impact on voter turnout. The Third Circuit

found these activities to be illegal and in direct violation

of consent decrees barring the Republican Party from

targeting minority voters for poll challenges.

The Ohio Republican Party's decision to utilize thousands

of partisan challengers concentrated in minority and

Democratic areas likely disenfranchised tens of thousands of

legal voters, who were not only intimidated, but became

discouraged the long lines. Shockingly, these disruptions

were publicly predicted and acknowledged by Republican

officials: Mark Weaver, a lawyer for the Ohio Republican

Party, admitted the challenges ``can't help but create chaos,

longer lines and frustration.''

Mr. Blackwell's decision to prevent voters who requested

absentee ballots but did not receive them on a timely basis

from being able to receive provisional ballots likely

disenfranchised thousands, if not tens of thousands, of

voters, particularly seniors. A federal court found Mr.

Blackwell's order to be illegal and in violation of HAVA.

Second, on election day, there were numerous unexplained

anomalies and irregularities involving hundreds of thousands

of votes that have yet to be accounted for:

There were widespread instances of intimidation and

misinformation in violation of the Voting Rights Act, the

Civil Rights Act of 1968, Equal Protection, Due Process and

the Ohio right to vote. Mr. Blackwell's apparent failure to

institute a single investigation into these many serious

allegations represents a violation of his statutory duty

under Ohio law to investigate election irregularities.

We learned of improper purging and other registration

errors by election officials that likely disenfranchised tens

of thousands of voters statewide. The Greater Cleveland Voter

Registration Coalition projects that in Cuyahoga County alone

over 10,000 Ohio citizens lost their right to vote as a

result of official registration errors.

There were 93,000 spoiled ballots where no vote was cast

for president, the vast majority of which have yet to be

inspected. The problem was particularly acute in two

precincts in Montgomery County which had an undervote rate of

over 25% each--accounting for nearly 6,000 voters who stood

in line to vote, but purportedly declined to vote for

president.

There were numerous, significant unexplained irregularities

in other counties throughout the state: (i) In Mahoning

county at least 25 electronic machines transferred an unknown

number of Kerry votes to the Bush column; (ii) Warren County

locked out public observers from vote counting citing an FBI

warning about a potential terrorist threat, yet the FBI

states that it issued no such warning; (iii) the voting

records of Perry county show significantly more votes than

voters in some precincts, significantly less ballots than

voters in other precincts, and voters casting more than one

ballot; (iv) in Butler county a down ballot and underfunded

Democratic State Supreme Court candidate implausibly received

more votes than the best funded Democratic Presidential

candidate in history; (v) in Cuyahoga county, poll worker

error may have led to little known third party candidates

receiving twenty times more votes than such candidates had

ever received in otherwise reliably Democratic leaning areas;

(vi) in Miami county, voter turnout was an improbable and

highly suspect 98.55 percent, and after 100 percent of the

precincts were reported, an additional 19,000 extra votes

were recorded for President Bush.

Third, in the post-election period we learned of numerous

irregularities in tallying provisional ballots and conducting

and completing the recount that disenfranchised thousands of

voters and call the entire recount procedure into question

(as of this date the recount is still not complete):

Mr. Blackwell's failure to articulate clear and consistent

standards for the counting of provisional ballots resulted in

the loss of thousands of predominantly minority votes. In

Cuyahoga County alone, the lack of guidance and the

ultimate narrow and arbitrary review standards

significantly contributed to the fact that 8,099 out of

24,472 provisional ballots were ruled invalid, the highest

proportion in the state.

Mr. Blackwell's failure to issue specific standards for the

recount contributed to a lack of uniformity in violation of

both the Due Process Clause and the Equal Protection Clauses.

We found innumerable irregularities in the recount in

violation of Ohio law, including (i) counties which did not

randomly select the precinct samples; (ii) counties which did

not conduct a full hand court after the 3% hand and machine

counts did not match; (iii) counties which allowed for

irregular marking of ballots and failed to secure and store

ballots and machinery; and (iv) counties which prevented

witnesses for candidates from observing the various aspects

of the recount.

The voting computer company Triad has essentially admitted

that it engaged in a course of behavior during the recount in

numerous counties to provide ``cheat sheets'' to those

counting the ballots. The cheat sheets informed election

officials how many votes they should find for each candidate,

and how many over and under votes they should calculate to

match the machine count. In that way, they could avoid doing

a full county-wide hand recount mandated by state law.

Chronology of Events

The Lead Up to the 2004 Ohio Presidential Election In

Ohio--In the days leading up to election day 2004, a

consensus appeared to have emerged among observers that the

state of Ohio would be one of the battleground states that

would decide who would be elected the Forty-fourth President

of the United States. Both the Democratic and Republican

Presidential campaigns, as well as outside groups, had spent

considerable time and resources to win the state, but the day

before the election, the Democratic candidate, Senator John

Kerry, appeared to have the edge. The Democratic Party also

had vastly outperformed its Republican counterparts in

registering voters in this key state.

Election Day--Numerous irregularities were reported

throughout Ohio. In particular, in predominately Democratic

and African-American areas, the voting process was chaotic,

taxing and ultimately fruitless for many. The repeated and

suspicious challenges of voter eligibility and a lack of

inadequate number of voting machines in these areas worked in

concert to slow voting to a crawl, with voting lines as long

as ten hours. Voters reported bizarre ``glitches'' in voting

machines where votes for Senator Kerry were registered as

votes for the President. The counting process was similarly

chaotic and suspect.

The Aftermath--On November 5, after receiving preliminary

reports of election irregularities in the 2004 General

Election, Congressman John Conyers, Jr., the Ranking Member

of the House Judiciary Committee, and 14 Members of Congress

wrote to the Government Accountability Office (GAO) to

request an investigation of such irregularities.

On November 22, at the request of the GAO, the House

Judiciary Committee Democratic staff met with GAO officials.

In this meeting, GAO officials advised that, on its own

authority, the GAO was prepared to move forward with a wide

ranging analysis of systemic problems in the 2004 elections.

GAO officials also advised Judiciary staff that they would be

unable to examine each and every specific election complaint,

but would look at some such complaints as exemplars of

broader deficiencies.

At the same time, the offices of Democratic Staff and of

Democratic Judiciary Committee Members were deluged with e-

mails and complaints about the election. While such

complaints are still being processed, close to 100,000 such

complaints were received. As of this writing, the Judiciary

Democratic office alone is receiving approximately 4,000 such

e-mails a day. More than half of these complaints were from

one state: Ohio. The Election Protection Coalition has

testified that it received more complaints on election day

concerning irregularities in Ohio than any other state.

On December 2, 2004, Members of the Judiciary Committee

wrote to Ohio Secretary of State Kenneth Blackwell that these

complaints appear collectively to constitute a troubled

portrait of a one-two punch that may well have altered and

suppressed votes, particularly minority and Democratic votes.

The Members posed 36 questions to Secretary Blackwell about a

combination of official actions and corresponding actions by

non-official persons, whether in concert or not, worked hand-

in-glove to depress the vote among constituencies deemed by

Republican campaign officials to be disadvantageous.

Through his spokesman, Secretary Blackwell assured the

public and the press that he would be happy ``to fill in the

blanks'' for the Committee and asserted that many questions

were easily answered. In fact, Secretary Blackwell belatedly

replied to the letter with a refusal to answer any of the

questions. Ranking Member Conyers wrote back to Blackwell the

same day requesting that he remain true to his promise to

answer the questions. Congressman Conyers has yet to receive

a reply.

At the same time, officials from the Green Party and

Libertarian Party have been investigating allegations of

voter disenfranchisement in Ohio and other states.

Eventually, the Presidential Candidates for those parties,

David Cobb and Michael Badnarik, filed requests for recounts

to all 88 Ohio Counties. However, it appears their efforts

too are being stonewalled and thwarted by nonstandard and

highly selective recounts, unnecessary delays, and blatant

deviations from long accepted Ohio law and procedure.

Recently, Senator Kerry, a party to the recount action,

joined the Green Party and Libertarian Party in requesting

immediate action to halt these irregularities and potential

fraud in the recount. The recount is still pending before the

federal court, yet to be counted.

In addition, a challenge has been filed to the Ohio results

asserting, to a level of sworn proof beyond a reasonable

doubt, that Senator Kerry, not President Bush, was the actual

victor of the Presidential race in Ohio. Kenneth Blackwell is

adamantly refusing to answer any questions under oath in

regard to election irregularities or results. He is

apparently counting upon Congress accepting the votes of the

electors and, as an immediate consequence, the Ohio Supreme

Court dismissing the citizens' election contest.

Committee Members and other interested Members have gone to

substantial lengths to ascertain the facts of this matter.

The investigation by Congressman Conyers and the Democratic

staff of the House Judiciary Committee into the

irregularities reported in the Ohio presidential election has

also included the following efforts:

On November 5, 2004, Representatives Conyers, Nadler, and

Wexler wrote to the GAO

Comptroller David M. Walker requesting an investigation of

the voting machines and technologies used in the 2004

election;

On November 8, 2004, Representatives Conyers, Nadler,

Wexler, Scott, Watt, and Holt wrote to GAO Comptroller Walker

requesting that additional concerns surrounding the voting

machines and technologies used in the 2004 election be

investigated;

On November 15, 2004, Representatives Lee, Filner, Olver,

and Meeks joined in the request for a GAO investigation;

On November 29, 2004, Representatives Weiner, Schakowsky,

Farr, Sanders, and Cummings joined in the request for a GAO

investigation;

On December 2-3, 2004, Congressman Conyers and other

Judiciary Democratic Members wrote to Ohio Secretary of State

J. Kenneth Blackwell concerning Ohio election irregularities;

On December 3, 2004, Representative Woolsey joined in the

request for a GAO investigation;

On December 3, 2004, Congressman Conyers wrote to Warren

Mitofsky of Mitofsky International requesting the release of

exit poll raw data from the 2004 presidential election as

such data may evidence instances of voting irregularities;

On December 8, 2004 in Washington, D.C., Congressman

Conyers hosted a forum on voting irregularities in Ohio;

On December 13, 2004 Congressman Conyers hosted a second

forum on voting irregularities in Ohio in Columbus, Ohio;

On December 13, 2004 Congressman Conyers and other Members

wrote to Ohio Governor, Bob Taft, Speaker of Ohio State

House, Larry Householder, and President of Ohio State Senate,

Doug White, requesting a delay of the meeting of Ohio's

presidential electors;

On December 14, 2004, Congressman Conyers wrote to Ohio

Secretary of State J. Kenneth Blackwell in regards to the

Secretary's refusal to cooperate with the Judiciary

Democratic Members investigating election irregularities in

Ohio;

On December 15, 2004, Congressman Conyers wrote to FBI

Special Agent in Charge, Kevin R. Brock and Hocking County,

Ohio Prosecutor, Larry Beal, requesting an investigation into

alleged Ohio election problems;

On December 21, 2004, Congressman Conyers wrote to Ohio

candidates requesting that they report any incidences of

irregularities or deviations from accepted law or practices

during the recount in Ohio;

On December 21, 2004, Congressman Conyers wrote to several

major media outlets requesting the exit poll raw data from

the 2004 presidential election;

On December 22, 2004, Congressman Conyers wrote to Triad

GSI President Brett Rapp and Triad GSI Ohio Field

Representative Michael Barbian, Jr. regarding the voting

machine company's involvement in the Presidential election

and Ohio recount and allegations that it intentionally or

negligently acted to prevent validly cast ballots in the

presidential election from being counted;

On December 23, 2004, as a follow-up letter to the December

22 letter, Congressman Conyers wrote to Triad's President

Rapp and Ohio Field Representative Barbian upon learning that

Triad had remote access to tabulating computers controlled by

the Board of Elections; and

On January 3, 2004, federal and Ohio state lawmakers joined

Reverend Jesse Jackson in Columbus, Ohio for a rally calling

attention to the need for national election reform and the

January 6th joint session of Congress where election results

will be certified.

Citizen groups have played a substantial role in acquiring

relevant information. Citizens Alliance for Secure Elections

in Ohio has organized hearings that have provided valuable

leads for this report. We have been contacted by thousands of

concerned citizens: they want a full and fair count of all of

the votes and confidence in the electoral system, and they

find both of these to be sorely lacking in this election.

Many have investigated these matters themselves and have made

considerable sacrifices to do so.

The events surrounding the Presidential election in Ohio

must be viewed in two important contexts. First, there is the

2000 Election debacle in Florida. In that election, advocates

for a full and fair count were asked to ``move on'' after

Vice President Al Gore conceded the election to then-Governor

George W. Bush. Months later, it was found that a full and

fair count would have resulted in Gore, not Bush, being

elected the Forty-third President of the United States.

Subsequent investigations also uncovered rampant

disenfranchisement in Florida, particularly of African-

American voters.

Second, as events have unfolded in Ohio, telling events

have taken place within the United States, in the State of

Washington, and across the globe, in the Ukraine. In

Washington State, after the Republican Gubernatorial

Candidate, Dino Rossi, declared victory after a partial

recount, it was later found--after a full and fair recount--

that the Democratic candidate, Christine Gregoire, was the

victor. While national and state Republican leaders in Ohio

have derided attempts to ascertain the Ohio Presidential

election result and resolve the questions described herein,

after the Washington recount, Mr. Rossi has now asked for a

re-vote in the State of Washington, saying it is needed for

the election to be ``legitimate.''

In the Ukraine, after the apparent defeat of the opposition

leader, Viktor Yushchenko, in that nation's Presidential

election, amid allegations of fraud and public protests, a

new election was held, and Yushchenko won by a significant

margin. In fact, in the first, seemingly flawed election,

Yushchenko appeared to lose by three percentage points.

However, he won by eight percentage points in the subsequent

revote. United States officials called the original vote rife

with ``fraud and abuse,'' largely relying on anecdotal

evidence and deviations between exit polls and reported

results.

A simple lesson may be drawn from these two contexts:

elections are imperfect. They are subject to manipulation and

mistake. It is, therefore, critical that elections be

investigated and audited to assure the accuracy of results.

As Senator Kerry's attorney recently noted, only with

uniformity in the procedures for such an investigation and

audit ``can the integrity of the entire electoral process and

the election of Bush-Cheney warrant the public trust.''

Regardless of the outcome of the election, and that outcome

cannot be certain as long as legitimate questions remain and

valid ballots are being counted, it is imperative that we

examine any and all factors that may have led to voting

irregularities and any failure of votes to be properly

counted.

Relevant Background Law

A. Federal Constitutional Law Safeguards

The right to vote is our most cherished democratic right

and, as such, is strongly protected under the Constitution.

Both the Equal Protection and Due Process Clauses of the 14th

Amendment operate to protect our citizens' right to vote for

the candidate of their choice.

In the seminal voting rights case of Reynolds v. Sims, the

Supreme Court held that ``the right to vote freely for the

candidate of one's choice is of the essence of a democratic

society, and any restrictions on that right strike at the

heart of representative government.'' The Court observed

that, ``undeniably the Constitution of the United States

protects the right of all qualified citizens to vote, in

state as well as in federal elections. A consistent line

of decisions by this Court in cases involving attempts to

deny or restrict the right of suffrage has made this

indelibly clear. It has been repeatedly recognized that

all qualified voters have a constitutionally protected

right to vote, . . . and to have their votes counted.''

Under the Equal Protection Clause of the Fourteenth

Amendment, Reynolds and its progeny require that votes that

are cast must actually be counted. The Equal Protection

Clause also requires that all methods the ``legislature has

prescribed'' to preserve the right to vote be effected, not

thwarted.

Courts have held that the Due Process Clause implemented in

the context of voting rights requires ``fundamental

fairness''--the idea that the state official cannot conduct

an election or apply vote-counting procedures that are so

flawed as to amount to a denial of voters' rights to have

their voices heard and their votes count. As a result, under

the Constitution, citizens have a fundamental right to vote

and to have their vote counted by way of election procedures

that are fundamentally fair. Where ``organic failures in a

state or local election process threaten to work patent and

fundamental unfairness, a . . . claim lies for a violation of

substantive due process.''

Importantly, protections for the right to vote extend to

and include the right to a full and fair recounting of those

votes. A recount is fundamental to ensure a full and

effective counting of all votes. Ohio courts have held that

``[a] recount . . . is the only fair and equitable procedure

to ensure the correct tally of all the votes.'' As the

Oklahoma Supreme Court recently emphasized, ``[a] timely

recount is an integral part of an election.'' The West

Virginia Supreme Court, construing a recount statute similar

to Ohio's recount provisions, stressed the importance of an

election recount to the fairness and integrity of the

election itself. Indeed, courts in states which provide a

statutory right to a recount uniformly have held that an

election cannot be deemed over and final until a recount

provided under state law has been completed.

B. Federal Statutory Election Safeguards

There are numerous federal statutes that protect the right

to vote. First and foremost, the Voting Rights Act prohibits

any person, whether acting under color of law or otherwise,

from:

(1) failing or refusing to permit any qualified person from

voting in . . . federal elections;

(2) refusing to count the vote of a qualified person; or

(3) intimidating any one attempting to vote or any one who

is assisting a person in voting.

In addition, the Civil Rights Act of 1968 provides criminal

penalties for violations of civil rights, including

interference with the right to vote. Specifically, section

245 of title 18 makes it a crime for any person who ``by

force or threat of force willfully injures, intimidates or

interferes with, or attempts to injure, intimidate or

interfere with any person because he is or has been, or in

order to intimidate such person or any other person or any

class of persons from voting or qualifying to vote. . . .''.

In 1993, Congress enacted the National Voter Registration

Act (NVRA), which requires that, for federal elections,

states establish fair and expeditious procedures so that

eligible citizens may register to vote. Pursuant to the NVRA,

section 1974a of title 42 makes it a crime for any person to

willfully steal, destroy, conceal, mutilate, or

alter any voting records, including those having to do with

voter registration.

After the widespread problems that occurred in the November

2000 election, Congress enacted the Help America Vote Act

(HAVA), thereby creating a new federal agency with election

administration responsibilities, setting requirements for

voting and voter-registration systems and certain other

aspects of election administration, and providing federal

funding. Perhaps the central requirement of HAVA was that,

beginning January 1, 2004, any voter not listed as registered

must be offered and permitted to cast a provisional ballot.

HAVA included a variety of additional new requirements,

including a provision that beginning January 1, 2004

(extendable to 2006), states using voter registration must

employ computerized, statewide voter registration systems

that are accurately maintained.

C. Ohio Election Safeguards

Ohio has enacted numerous provisions designed to protect

the integrity of the voting and tabulation process.

1. The Right to Vote in Ohio

Under the Ohio Constitution, ``Every citizen of the United

States, of the age of eighteen years, who has been a resident

of the state, county, township, or ward, such time as may be

provided by law, and has been registered to vote for thirty

days, has the qualifications of an elector, and is entitled

to vote at all elections.'' This includes the right to vote

directly for Presidential electors. The protection of this

right is placed squarely on the Secretary of State, who has

the affirmative duty to ``investigate the administration of

election laws, frauds, and irregularities in elections in any

county, and report violations of election laws to the

attorney general or prosecuting attorney, or both, for

prosecution.'' To complete this task, the legislature has

given the Secretary the power to ``issue subpoenas, summon

witnesses, compel the production of books, papers, records

and other evidence.''

Many specific provisions in the Ohio Revised Code help

protect one's right to vote:

Polls must be open from 6:30 in the morning until 7:30 at

night, and everyone in line at that time must be allowed to

vote.

Loitering around the polling place is barred, and no one

may ``hinder or delay'' a voter from reaching the polls or

casting a vote.

Alteration or destruction of ballots, machinery or election

records is prohibited.

Illegal voting is a felony.

Those who cannot mark their own ballot due to illiteracy or

disability are entitled to assistance.

Election officials who do not enforce these provisions are

criminally liable.

2. Declaring Results

Ohio law requires that, before the Secretary of State can

declare the initial results of the Presidential election in

Ohio, each of the 88 county boards of elections (``county

boards'') must (1) canvass the results in the county, (2)

certify abstracts of those results, and (3) send the

certified abstracts to the Secretary of State.'' Only after

the Secretary of State receives the certified abstracts from

the county boards is the Secretary able to canvass the

abstracts to ``determine and declare'' the initial results of

the Presidential election in Ohio.

Under Ohio law, the Secretary of State is required to fix

the calendar by which the state's Presidential election

results initially are declared and by which a recount of

those initial results can occur. Specifically, the Secretary

is to set the date by which Ohio's 88 county boards must

complete their canvass of election returns and send the

certified abstracts of the results to the Secretary. Any

statutorily mandated recount of the votes cast in Ohio for

President cannot occur before the Secretary declares the

initial results.

3. Security of Ballots and Machinery

In addition, Ohio law prohibits election machinery from

being serviced, modified, or altered in any way subsequent to

an election, unless it is done so in the presence of the full

board of elections and other observers. Any handling of

ballots for a subsequent recount must be done in the presence

of the entire Board and any qualified witnesses. Containers

in which ballots are kept may not be opened before all of the

required participants in are attendance. The Ohio Revised

Code defines a ballot as ``the official election presentation

of offices and candidates . . . and the means by which votes

are recorded.'' Therefore, for purposes of Ohio law,

electronic records stored in the Board of Election computers

are to be considered ``ballots.''

Further, any modification of the election machinery may

only be done after full notice to the Secretary of State. The

Ohio Code and related regulations require that after the

state certifies a voting system, changes that affect ``(a)

the method of recording voter intent; (b) voter privacy; (c)

retention of the vote; or (d) the communication of voting

records,'' must be done only after full notice to the

Secretary of State.

Secretary Blackwell's own directive, coupled with Ohio

Revised Code Sec. 3505.32, prohibits any handling of these

ballots without bipartisan witnesses present. That section of

the code provides that during a period of official

canvassing, all interaction with ballots must be ``in the

presence of all of the members of the board and any other

persons who are entitled to witness the official canvass.''

In this election, the Ohio Secretary of State has issued

orders that election officials were to treat all election

materials as if the State were in a period of canvassing,''

and that, ``teams of one Democrat and one Republican must be

present with ballots at all times of processing.''

In addition to these provisions imposing duties on the

Board of Elections, there are numerous criminal sanctions for

tampering with votes and the machines that tabulate them:

``No person shall tamper or attempt to tamper with, deface

impair the use of, destroy or otherwise injure in any manner

any voting machine . . . No person shall tamper or attempt to

tamper with, deface, impair the use of, destroy or otherwise

change or injure in any manner any marking device, automatic

tabulating equipment or any appurtenances or accessories

thereof.''

``No person shall-destroy any property used in the conduct

of elections.

``No person, from the time ballots are cast or voted until

the time has expired for using them in a recount or as

evidence in a contest of election, shall unlawfully destroy

or attempt to destroy the ballots, or permit such ballots or

a ballot box or pollbook used at an election to be destroyed;

or destroy, falsify, mark, or write in a name on any such

ballot that has been voted.

``No person, from the time ballots are cast or counted

until the time has expired for using them as evidence in a

recount or contest of election, shall willfully and with

fraudulent intent make any mark or alteration on any ballot;

or inscribe, write, or cause to be inscribed or written in or

upon a registration form or list, pollbook, tally sheet, or

list, lawfully made or kept at an election, or in or upon a

book or paper purporting to be such, or upon an election

return, or upon a book or paper containing such return the

name of a person not entitled to vote at such election or not

voting thereat, or a fictitious name, or, within such time,

wrongfully change, alter, erase, or tamper with a name, word,

or figure contained in such pollbook, tally sheet, list,

book, or paper; or falsify, mark, or write thereon with

intent to defeat, hinder, or prevent a fair expression of the

will of the people at such election.

All of these are fifth degree felonies.

4. The Law of Recounts and Contests

The Secretary of State's declaration of the initial results

of a Presidential election in Ohio is not final. Under Ohio

law, a recount of the initial results is required where the

margin of victory is one-fourth of one percent or less, or

where a candidate who is not declared elected applies for a

recount within five days of the Secretary of State declaring

the results of the election and remits the required bond. In

either instance, the Secretary of State ``shall make an

amended declaration of the results'' of the Presidential

election after a full and complete recount of the initial

results throughout the state is completed. Therefore, the

Ohio legislature has determined that, in certain statutorily-

defined circumstances, the Secretary's final declaration of

the results of a Presidential election in Ohio shall not

occur prior to a full and complete recount of the initial

results.

Once the recount applications have been filed, all affected

county boards must notify the applicant and all others who

received votes in the election of the time, method and place

at which the recount will take place, such notice to be no

later than five days prior to the start of the recounts.

Nothing in Ohio law prohibits the notices from being mailed

prior to the certification of results. The recount must be

held no later than ten days after the day the recount

application is filed or after the day the Secretary of State

declares the results of the election.

At the time and place fixed for making a recount, the Board

of Elections, in the presence of all witnesses who may be in

attendance, shall open the sealed containers containing the

ballots to be recounted and shall recount them. Each

candidate may ``attend and witness the recount and may

have any person whom the candidate designates attend and

witness the recount.

Due to a directive issued by Secretary Blackwell, the

recount does not automatically require a hand count of every

vote cast in the election. Each county board of elections

randomly takes a sample representing at least 3% of the votes

cast and compares the machine count to a hand count. If there

is a discrepancy, the entire county must be hand counted. If

there is no discrepancy, the remainder of ballots may be

recounted by machine.

D. Determination of Ohio's Electoral College Votes

Ohio and federal law intersect with regard to the issue of

determining the extent to which Ohio's electoral votes are

counted towards the election of the president through the

electoral college. The 12th Amendment sets forth the

requirements for casting electoral votes and counting those

votes in Congress. The electors are required to meet, cast

and certify their ballots and transmit them to the Vice

President in his or her capacity as President of the Senate.

In addition, the Electoral Count Act requires that the

results be transmitted to the secretary of state of each

state, the Archivist of the United States, and the federal

judge in the district in which the electors met. Upon receipt

of the ballots at a time designated by statute, the

``President of the Senate shall, in the

presence of the Senate and House of Representatives, open all

the certificates and the votes shall then be counted.

Congress has specified that all controversies regarding the

appointment of electors should be resolved six days prior to

the meeting of electors (on December 7, 2004, for purposes of

this year's presidential election) in order for a state's

electors to be binding on Congress when Congress meets on

January 6, 2005, to declare the results of the 2004 election.

Specifically, 3 U.S.C. Sec. 5 provides, in pertinent part:

``If any State shall have provided, by laws enacted prior

to the day fixed for the appointment of the electors, for its

final determination of any controversy or contest concerning

the appointment of all or any of the electors of such State,

by judicial or other methods or procedures, and such

determination shall have been made at least six days before

the time fixed for the meeting of the electors, such

determination made pursuant to such law so existing on said

day, and made at least six days prior to said time of meeting

of the electors, shall be conclusive, and shall govern in the

counting of the electoral votes as provided in the

Constitution, and as hereinafter regulated, so far as the

ascertainment of the electors appointed by such State is

concerned.''

The joint session of the Senate and House is held on

January, unless Congress determines otherwise, of the year

following the presidential election at 1:00 p.m. No debate is

allowed during the joint session. The President of the Senate

opens the electoral vote certificates in alphabetical order

from each state, passes them to four tellers (required by

statute to be appointed two from each House) who announce the

results. The votes are then counted and those results

announced by the President of the Senate. The candidates for

President and Vice President receiving a majority of the

electoral votes, currently set at 270 of 538, are declared to

have been ``elected President and Vice President of the

States.''

Section 15 of title 3, United States Code, provides that,

when the results from each of the states are announced, that

``the President of the Senate shall call for objections, if

any.'' Any objection must be presented in writing and

``signed by at least one Senator and one Member of the House

of Representatives before the same shall be received.'' The

objection must ``state clearly and concisely, and without

argument, the ground thereof.'' When an objection has been

properly made in writing and endorsed by a member of each

body the Senate withdraws from the House chamber, and each

body meets separately to consider the objection. ``No votes .

. . from any other State shall be acted upon until the

[pending] objection . . . [is] finally disposed of.''

Section 17 of title 3 limits debate on the objections in

each body to two hours, during which time no member may speak

more than once and not for more than five minutes. Both the

Senate and the House must separately agree to the objection;

otherwise, the challenged vote or votes are counted.

Historically, there appears to be three general grounds for

objecting to the counting of electoral votes. The law

suggests that an objection may be made on the grounds that

(1) a vote was not ``regularly given'' by the challenged

elector(s); (2) the elector(s) was not ``lawfully certified''

under state law; or (3) two slates of electors have been

presented to Congress from the same State. Section 15 of

title 3 specifically provides:

``[N]o electoral vote or votes from any State which shall

have been regularly given by electors whose appointment has

been lawfully certified . . . from which but one return has

been received shall be rejected, but the two Houses

concurrently may reject the vote or votes when they agree

that such vote or votes have not been so regularly given by

electors whose appointment has been so certified. If more

than one return or paper purporting to be a return from a

State shall have been received by the President of the

Senate, those votes, and those only shall be counted which

shall have been regularly given by the electors who are shown

. . . to have been appointed.''

Since the Electoral Count Act of 1887, no objection meeting

the requirements of the Act has been made against an entire

slate of state electors. In the 2000 election several Members

of the House of Representatives attempted to challenge the

electoral votes from the State of Florida. However, no

Senator joined in the objection, and, therefore, the

objection was not ``received.'' In addition, there was no

determination whether the objection constituted an

appropriate basis under the 1887 Act. However, if a State has

not followed its own procedures and met its obligation to

conduct a free and fair election, a valid objection--if

endorsed by at least one Senator and a Member of the House of

Representatives--should be debated by each body separately

until ``disposed of''.

Detailed Findings

A. Pre-Election

1. Machine Allocations--Why were there such long lines in

Democratic leaning areas but not Republican leaning

areas?

Facts

One of the critical reforms of HAVA was federal funding for

states to acquire new and updated voting machines, and to

fairly allocate the machines. Under HAVA, the Election

Assistance Commission (EAC) provides payments to States to

help them meet the uniform and nondiscriminatory election

technology and administration requirements in title III of

the law.'' In 2004, the EAC processed a payment of

$32,562,331 for fiscal year 2003 and $58,430,186 for fiscal

year 2004 for a total of $90,992,517. There is no information

publicly available describing what, if any, Ohio HAVA funds

were used and for what those funds were used. Nor are we

aware how such funds were allocated within the state of Ohio

and between counties.

There was a wide discrepancy between the availability of

voting machines in more minority, Democratic and urban areas

as compared to more Republican, suburban and exurban areas.

Even on election day, urban areas were hard pressed to

receive the critical machines to respond to the ever

lengthening lines. According to a Washington Post

investigation, ``in Columbus, Cincinnati and Toledo, and on

college campuses, election officials allocated far too few

voting machines to busy precincts, with the result that

voters stood on line as long as 10 hours--many leaving

without voting.'' Moreover, the Election Protection Coalition

testified that more than half of the complaints about long

lines they received ``came from Columbus and Cleveland where

a huge proportion of the state's Democratic voters live.''

Based upon various sources including complaints, sworn

testimony, and communications with Ohio election officials,

we have identified credible concerns regarding the allocation

of machines on election day:

Franklin County

A New York Times investigation revealed that Franklin

County election officials reduced the number of electronic

voting machines assigned to downtown precincts and added them

to the suburbs. ``They used a formula based not on the number

of registered voters, but on past turnout in each precinct

and on the number of so-called active voters--a smaller

universe. . . . In the Columbus area, the result was that

suburban precincts that supported Mr. Bush tended to have

more machines per registered voter than center city precincts

that supported Mr. Kerry.''

The Washington Post also found that in voter-rich Franklin

County, which encompasses the state capital of Columbus,

election officials decided to make do with 2,866 machines,

even though their analysis showed that the county needed

5,000 machines.

The Franklin County Board of Elections reported 81 voting

machines were never placed on election day, and Board

Director Matt Damschroder admitted that another 77 machines

malfunctioned on Election Day.'' However, a county purchasing

official who was on the line with Ward Moving and Storage

Company, documented only 2,741 voting machines delivered

through the November 2 election day.'' While Franklin

County's records reveal that they had 2,866 ``machines

available'' on election day. This would mean that the even

larger number of at least 125 machines remained unused on

Election Day. Mr. Damschroder misinformed a federal court on

Election Day when he testified the county had no additional

voting machines; this testimony was in connection with a

Voting Rights Act lawsuit brought by the state Democratic

Party that alleged minority precincts were intentionally

deprived of machines.

After the election the Washington Post also reported that

in Franklin County, ``27 of the 30 wards with the most

machines per registered voter showed majorities for Bush. At

the other end of the spectrum, six of the seven wards with

the fewest machines delivered large margins for Kerry.''

At seven of the eight polling places in Franklin County, a

heavily populated urban community, there were only three

voting machines per location; but there had been five

machines at these locations during the 2004 primary.

According to the presiding judge at one polling site

located at the Columbus Model Neighborhood facility at 1393

E. Broad St., there had been five machines during the 2004

primary. Moreover, at Douglas Elementary School, there had

been four machines during the spring primary.

We have received additional information of hardship caused

by the misallocation of machines based on emails and other

transmissions, with waits of 4-5 hours or more being the

order of the day. For example, we have learned of four hour

waits at Precincts 35B and C in Columbus; seven hours waits

for one voting machine per thousand voters, where the

adjacent precinct had one station for 184 voters.''

Additionally, it appears that in a number of locations,

polling places were moved from large locations, such as gyms,

where voters could comfortably wait inside to vote, to

smaller locations where voters were required to wait in the

rain.''

Dr. Bob Fitrakis testified before the House Judiciary panel

that Franklin County Board of Elections Chair, Bill Anthony,

said that a truckload of 75 voting machines were held back on

election day while people waited 5 to 6 hours to vote.

Over 102,000 new voters were registered in Franklin County.

A majority of them were African Americans. ``And so,'' said

State Senator Ray Miller, ``only logic would say, we need

more machines, particularly in the black community.''

Rev. William Moss testified that there were ``unprecedented

long lines'' and noted that Secretary of State Blackwell did

not provide sufficient numbers of voting machines to

accommodate the augmented electorate in Columbus.

Knox County

At Kenyon College, a surge of late registrations promised a

record vote. Nevertheless, Knox County officials allocated

two machines, just as in past elections. Voter Matthew Segal,

a student at Kenyon College, testified before the House

Judiciary panel about conditions that amounted to voter

disenfranchisement in Gambier, Ohio.'' The Gambier polling

place had two machines for a population of 1,300 people,

though nearby counties had one machine for every 100 people.

He noted that voters were ``compelled to stand outside in the

rain, through a hot gymnasium in crowded, narrow hallways,

making voting extremely uncomfortable.'' According to his

testimony, ``many voters became overheated and hungry'' and

had to leave the long lines to eat. ``One girl actually

fainted and was forced to leave the line,'' he said. ``Many

others suffered headaches due to claustrophobic conditions

and noise.''

In contrast, at nearby Mt. Vernon Nazarene University,

which is considered more Republican leaning, there were ample

voting machines and no lines.

Other

The NAACP testified that approximately ``thirty precincts

did not have curbside voting machines for seniors and

disabled voters.''

One entire polling place in Cuyahoga County had to ``shut

down'' at 9:25 a.m. on Election Day because there were no

working machines.

We received an affidavit from Rhonda J. Frazier, a former

employee of Secretary Blackwell, describing several

irregularities concerning the use of HAVA money and the

acquisition of election machinery by the state. She states

that Secretary Blackwell's office failed to comply with the

requirements of the voting reform grant that required all of

the voting machines in Ohio to be inventoried and tagged for

security reasons. Ms. Frazier also asserts that she ``was

routinely told to violate the bidded contracts to order

supplies from other companies for all 17 Secretary of State

offices throughout the State which were cheaper vendors,

leaving a cash surplus differential in the budget'' and that,

when she inquired as to where the money differential was

going, she was essentially told that this was not her concern

and that she should not inquire about where that money went.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Through intent or negligence, massive errors that led to

long lines were made in the distribution and allocations of

voting machines. The Washington Post reports that in Columbus

alone, the misallocation of machines reduced the number of

voters by up to 15,000 votes. Given what we have learned in

our hearings, this is likely conservative estimate, and

statewide, the shortage of machines could have resulted in

the loss of hundreds of thousands of votes. The vast majority

of this lost vote caused by lengthy lines in the midst of

adverse weather was concentrated in urban, minority and

Democratic leaning areas. As a result, this misallocation

appears to be of the pivotal factors concerning the vote and

outcome in the entire election in Ohio.

On its face, the misallocation, shorting, and failure to

timely deliver working machines would appear to violate a

number of legal requirements.

First, it would seem to constitute a violation of the

Voting Rights Act and the constitutional safeguards of Equal

Protection and Due Process, particularly given the racial

disparities involved. Denying voters the means to vote in a

reasonable and fair manner is no different than preventing

them from voting outright.

Second, the failure to provide enough voting machinery

violates both Ohio's Constitution, that provides all eligible

adults the right to vote, and the Ohio Revised Code which

requires the Boards of Elections to provide ``for each

precinct a polling place and provide adequate facilities at

each polling place for conducting the election.'' Further,

``the board shall provide a sufficient number of screened

or curtained voting compartments to which electors may

retire and conveniently mark their ballots.''

These conclusions regarding Ohio legal violations are

supported by several precedents, as well as common sense:

The U.S. District Court for the Southern District of Ohio

found such a serious threat to the voting right that it took

the highly unorthodox step of ordering that those individuals

waiting in line for longer than two hours receive paper

ballots or some other mechanism.

There is specific precedence for a legal violation due the

fact that, under Ohio law in 1956, the courts were forced to

intervene to enforce the then-applicable requirement of one

machine per 100 voters. The court was highly critical of the

previous practice of requiring only one machine for 800

voters or two for 1,400. Nearly 50 years later, we are

unfortunately back to the antiquated practice of effectively

disenfranchising those who are unable to spend an entire day

voting.

Evidence suggests that the Board of Elections'

misallocation of machines went beyond urban/suburban

discrepancies to specifically target Democratic areas. In

particular, within the less urban county of Knox, the more

Democratic leaning precincts near Kenyon College were

massively shorted; the more Republican leaning precincts near

Mt. Vernon Nazarene University were not.

Third, it appears that a series of more localized legal

violations have not been investigated. These include Mr.

Damschroder's contradictory statements regarding the number

and availability of machines on election day in Franklin

County raise the possibility of perjury. The affidavit

submitted by Rhonda Frazier would also appear to demonstrate

a prima facie violation of the Help America Vote Act.

Fourth, Secretary of State Blackwell's failure to initiate

any investigation into this pivotal irregularity (which

perhaps borders on fraud), notwithstanding his clear

statutory duty to do so under Ohio Revised Code section

3501.05, represents a clear violation of Ohio law. The

Secretary of State's most important obligation under the Ohio

Constitution is to protect the right of every Ohio citizen

who is eligible to vote and invesigate any and all

irregularities concerning the same. Mr. Blackwell's failure

to obey Ohio law on this point constitutes a clear instance

where Ohio election law has been abrogated.

2. Cutting Back on the Right to Provisional Ballots

Facts

In a decision that Ohio Governor Bob Taft believed could

affect over 100,000 voters, on September 17, 2004, Secretary

Blackwell issued a directive restricting the ability of

voters to use provisional ballots. The Election Protection

Coalition testified that the narrow provisional ballot

directive led to thousands of ballots from validly registered

voters being thrown out because election officials with

limited resources never told many of the voters in their

jurisdictions where to cast a ballot on Election Day. While

the Help America Vote Act provided that voters whose names do

not appear on poll books are to sign affidavits certifying

that they are in the correct jurisdiction and to be given

provisional ballots, Secretary Blackwell considerably

narrowed the definition of ``jurisdiction'' to mean

``precinct.'' Alleging that allowing voters to use

provisional ballots outside their own precincts would be ``a

recipe for Election Day chaos,'' Secretary Blackwell required

such ballots to be cast in the actual precincts of voters

otherwise they would be discarded entirely. Mr. Blackwell's

rationalization appears to have ignored the fact that in

prior elections, Ohio was able to grant far broader rights to

provisional ballots, and that other states that permitted

voters to cast them from anywhere within their county did not

face the chaos he feared.

Because of Secretary Blackwell's restrictive order, the

Sandusky County Democratic Party filed a federal lawsuit to

overturn it. The plaintiff's basis for the suit was that the

order was discriminatory because lower-income people were

more likely to move and, thus, appear at the wrong precinct.

Furthermore, the order would have disenfranchised first-

time voters, many of whom would not know where to vote.

In his rulings in favor of the plaintiffs and against

Secretary Blackwell, U.S. District Judge James Carr held that

the blame lay squarely on Secretary Blackwell. The court was

forced to issue two rulings ordering Secretary Blackwell to

issue HAVA-compliant directives. Secretary Blackwell abided

by neither judgment and instead proceeded with directives

that would disenfranchise Ohio voters.

With respect to the speed of the case, the court noted that

its urgency was the result of Secretary Blackwell failing to

issue provisional voting guidelines for almost two years

after the enactment of HAVA: ``The exigencies requiring the

relief being ordered herein are due to the failure of the

defendant to fulfill his duty not only to this Court, as its

injunction directed him to do, but more importantly, to his

failure to do his duty as Secretary of State to ensure that

the election laws are upheld and enforced. . . . The primary

cause of the exigency is the defendant's failure to have

issued Directive 2004-33 relating to provisional voting for

nearly twenty-three months after HAVA's enactment. . . .

Blackwell has never explained why he waited so long to do

anything to bring Ohio's provisional election procedures into

line with federal law.''

The court then turned its attention to the substance of

Secretary Blackwell's original and amended directives. In

these directives, ``Blackwell described not a single

provision of federal law generally, much less HAVA in

particular. . . . By failing to discuss HAVA, on the one

hand, and describing only outmoded, no longer applicable

procedures on the other, Blackwell . . . left Ohio's election

officials more confused than they would have been if the

directive had not issued.'' In addition, because the amended

directive did not clearly state that persons who might not be

eligible to vote must be informed of their right to vote

provisionally, the court held that ``Blackwell's proposed

directive would disenfranchise all such individuals.'' The

court believed that, by seeming to deprive voters and county

election officials of valuable information regarding HAVA and

provisional ballots, ``Blackwell apparently seeks to

accomplish the same result in Ohio in 2004 that occurred in

Florida in 2000.'' Ultimately, the court was forced to

require the Secretary, within a tight deadline, to issue

specific guidelines pertaining to provisional ballots.

Instead of complying with this federal court order,

Secretary Blackwell entirely disregarded the ruling and

questioned the motives of the judge. He referred to Judge

Carr as ``a liberal judge . . . who wants to be co-secretary

of state.'' At a speech before the Loveland Area Chamber of

Commerce in Clermont County, Secretary Blackwell compared

himself to Mohandas Gandhi, Martin Luther King, and the

apostle Paul on the grounds that he would rather go to jail--

as they did--than issue an order he believed was illegal. He

also claimed his office could not speak with Judge Carr about

the case because the Judge was in Florida; Blackwell later

admitted he did not mean the Judge actually was in Florida.

Additionally, a journalist reported seeing Judge Carr in his

chambers the day the ruling was issued. Secretary Blackwell

appealed the judge's decision to the Sixth Circuit Court of

Appeals, which overturned the lower court decision and

authorized Mr. Blackwell's more restrictive legal

interpretation.

While Blackwell cited an October 12 resolution by the

Election Assistance Commission as authority for his decision,

EAC Chairman DeForest Soaries asked Blackwell in writing not

to say that the resolution endorsed the Blackwell order.

Chairman Soaries further stated that Secretary Blackwell was

the only secretary of state who actually misread the EAC's

ruling. The EAC did not ``agree that a person in the wrong

precinct shouldn't be given a provisional ballot. . . . The

purpose of provisional ballots is to not turn anyone away

from the polls. . . . We want as many votes to count as

possible.''

Many of Ohio's county boards of elections also disagreed

with Blackwell's interpretation of the law and with his

motivations. Franklin County Board Chairman William Anthony

stated, ``For him to come out with that decision so close to

Election Day . . . I'm suspect of his motivations.'' The

Director of the Franklin County Board also disagreed with

Blackwell and asserted that its precincts would have voters

who insist they are in the correct precinct sign affidavits

and submit provisional ballots. Cuyahoga County directed

people to the right precincts but still accepted provisional

ballots from anyone who insisted on voting. Cuyahoga County

Board Chairman Bob Bennett, who also chairs the Ohio

Republican Party, issued a statement saying the Board would

not deny ballots to voters who wanted them: ``The Cuyahoga

County Board of Elections will not turn voters away. . . . We

are simply trying to avoid confrontation at the ballot box

over the validity of each ballot. Those decisions will be

made by the board of elections according to state law.''

In response, Mr. Blackwell's spokesperson threatened such

election officials with removal from their positions.

In Hamilton County, election officials implemented Mr.

Blackwell's directive and refused to count provisional

ballots cast at the correct polling place even if they were

cast at the wrong table in that polling place. Some polling

places contained multiple precincts that were located at

different tables. As a result, 1,110 provisional ballots were

deemed invalid because people voted in the wrong precinct. In

about 40 percent of these cases, voters found the correct

polling places, which contained multiple precincts, but

workers directed them to the wrong table. In other areas,

precinct workers refused to give any voter a provisional

ballot. Also, in at least one precinct, election judges told

voters that they may validly cast their ballot in any

precinct, leading to any number of disqualified provisional

ballots. Similarly, in Stark County, the Election Board

rejected provisional ballots cast at the wrong precinct in

the right polling place. In earlier elections, a vote cast in

Stark County in the wrong precinct at the proper polling

location was counted.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Mr. Blackwell's decision to restrict the use of provisional

ballots is one of the most critical in the election and could

well have resulted in disenfranchisement of tens of thousands

of voters. In a single polling place in Hamilton County,

denying provisional ballots if a voter showed up at the wrong

precinct cost more than 1,100 votes.

Although Mr. Blackwell's narrow interpretation was

ultimately upheld by the Sixth Circuit, this was not until

after a lower court found: ``The Proposed Directive fails in

many details to comply with HAVA by not instructing Ohio's

election workers about their duties under HAVA. Among the

crucial, but omitted details are: the mandatory obligation to

inform voters of the right to vote provisionally and the duty

to provide provisional ballots to all persons covered by the

statute, and not just to persons whose names are not on the

rolls.''

In our judgment, Mr. Blackwell's restrictive interpretation

violates the spirit, if not the letter, of HAVA. The decision

seems particularly unjust given that Ohio had not experienced

any notable difficulties giving provisional ballots on a

broader basis in past elections, and other states which

adopted broader constructions did not report the chaos and

confusion that Mr. Blackwell claimed to be the rationale for

his decision.

3. Cutting Back on the Right of Citizens To Register To Vote

Facts

On September 7, 2004, Secretary Blackwell issued a

directive to county boards of elections mandating rejection

of voter registration forms based on their paper weight.

Specifically, he instructed the boards to reject voter

registration forms not ``printed on white, uncoated paper of

not less than 80 lb. text weight.'' Then the counties were

instructed to follow a confusing procedure, treating the

voter registration forms not on this minimum paperweight as

an application for a new registration form. Mr. Blackwell's

issuance of this directive less than one month before Ohio's

voter registration deadline resulted in confusion and chaos

among the counties:

The Lake County Board of Elections Director, Jan Clair, who

happens to be a Republican, stated that the weight order

would ``create more confusion than the paper's worth. . . .

It's the weight of the vote I'm concerned about on Nov. 2--

that's the important thing.''

The Mahoning County Board of Elections Director, Michael

Sciortino, said mailing high weight registration paper to

voters was not a priority and might occur after the election

because of how it might confuse voters.

The Cuyahoga County Board of Elections Director, Michael

Vu, said his Board would rather not comply with the weight

order and asked state lawmakers to address it. Secretary

Blackwell gave permission for the Board to accept

registration forms that were printed in newsprint in the

Cleveland Plain Dealer.''' As Director Vu pointed out, his

office does not ``have a micrometer at each desk to check the

weight of the paper.''

Other counties such as Madison County followed Mr.

Blackwell's ruling and indicated that they sent letters and

new forms to voters.

The Franklin County Board of Elections was unlikely to

comply with the weight directive, largely because it does not

keep track of the weight of such forms.

The Lorain County Board of Elections accepted voter

registration on any weight of paper.

The Montgomery County Board of Elections said the paper

weight order was frustrating their ability to process

registrations. They attempted to comply by mailing a new form

to potential voters who sent forms of incorrect weight, but a

processing backlog of 4,000 forms prevented them from sending

new forms by the October 4 deadline, such that some voters

could have been disenfranchised. Steve Harsman, the Deputy

Director of the Board, says ``there is just no reason to use

80-pound paper.''

Finally, Secretary Blackwell was not following his own

order. An Ohio lawyer, John Stopa, noted that voter

registration forms obtained at Blackwell's office were

printed on 60-pound paper. An election board official stated

he obtained 70-pound weight forms from Blackwell's office.

After several weeks of pressure from voting rights

advocates, such as the League of Women Voters of Ohio and

People for the American Way, Secretary Blackwell reversed his

directive on September 28, 2004. Even his new order, however,

was not drafted clearly enough. He did not withdraw the first

directive, and the New York Times found the second directive

to be ``worded so inartfully that it could create confusion.

As a matter of fact, the Delaware County Board of Elections

posted a notice on its website stating it could not accept

its own Voter Registration Forms and directed voters to

request a new one by calling a number.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Secretary Blackwell's directive to reject registration

applications based on paper weight, even though eventually

rescinded, undoubtedly had a negative impact on registration

figures. During the time period the directive was in place,

it likely resulted in an untold number of voters not being

registered in time for the 2004 election. In addition, even

after the directive was reconsidered, it was done so in a

confusing manner. For example, the directive continued to be

posted on the Ohio Secretary of State's website, and at least

one county, Delaware County, continued to post the directive

on its website as well.

Mr. Blackwell's initial directive appears to be

inconsistent with the National Voter Registration Act, which

put safeguards in place to ease voter registration, not

impede it. There is perhaps no more certain indication of the

disenfranchisement bias Secretary of State Blackwell brought

to his job than this controversial ruling, which was widely

reviled even by Republicans.

4. Targeting New Minority Voter Registrants--Caging

Facts

The Ohio Republican Party attempted to engage in

``caging,'' whereby it sent registered letters to newly

registered voters in minority and urban areas, and then

sought to challenge 35,000 individuals who refused to sign

for the letters or the mail otherwise came back as

undeliverable (this includes voters who were homeless,

serving abroad, or simply did not want to sign for something

concerning the Republican Party). Mark Weaver, an attorney

for the Ohio Republican Party, acknowledged the Party used

this technique. During a hearing before the Summit County

Board of Elections, a challenger admitted that she had no

knowledge to substantiate her claim that the voters she was

challenging were out of compliance with Ohio's election law:

Ms. Barbara MILLER (Republican Challenger): That was my

impression that these items that I signed were for people

whose mail had been undeliverable for several times, and that

they did not live at the residence.

Mr. Russell PRY (Member, Summit County Board of Elections):

Did you personally send any mail to Ms. Herrold?

Ms. MILLER: No, I did not.

Mr. PRY: Have you seen any mail that was returned to Ms.

Herrold?

Ms. MILLER: No, I have not.

Mr. PRY: Do you have any personal knowledge as we stand

here today that Ms. Herrold does not live at the address at

238 30th Street Northwest?

Ms. MILLER: Only that which was my impression; that their

mail had not been able to be delivered.

Mr. PRY: And who gave you that impression?

Ms. MILLER: Attorney Jim Simon.

Mr. PRY: And what did--

Ms. MILLER: He's an officer of the party.

Mr. PRY: An officer of which party?

Ms. MILLER: Republican party.

Mr. PRY: Where did you complete this challenge form at?

Ms. MILLER: My home.

Mr. PRY: What did Mr. Simon tell you with respect to Ms.

Herrold's residence?

Ms. MILLER: That the mail had come back undeliverable

several times from that residence.

Mr. PRY: And you never saw the returned mail?

Ms. MILLER: No, I did not.

Mr. PRY: Now, you've indicated that you signed this based

on some personal knowledge.

Mr. HUTCHINSON: (Joseph F. Hutchinson, Jr. Summit County

Board of Elections) No.

Mr. ARSHINKOFF: (Alex R. Arshinkoff, Summit County Board of

Elections) Reason to believe. It says, ``I have reason to

believe.'' It says it on the form.

Mr. JONES: It says, ``I hereby declare under penalty of

election falsification, that the statements above are true as

I verily believe.''

Mr. ARSHINKOFF: It says here, ``I have reason to believe.''

Mr. HUTCHINSON: It says what it says.

Mr. ARSHINKOFF: You want her indicted, get her indicted.

Mr. PRY: That may be where it goes next.

Among other things, the Republican Party arranged for the

Sandusky County sheriff to visit the residences of 67 voters

with wrong or non-existent addresses.

The caging tactics were so problematic that a federal

district court in New Jersey and a panel of the Third Circuit

found that the Republican Party was egregiously in violation

of the 1982 and 1987 decrees that barred the party from

targeting minority voters for challenges at the polls. They

found sufficient evidence that the Ohio Republican Party and

the RNC conspired to be ``disruptive'' in minority-majority

districts and enjoined the party from using the list. The

Third Circuit granted a hearing en banc and therefore

stayed the order and vacated the opinion.

The U.S. District Court for the Southern District of Ohio

found the same activities to violate the Due Process Clause

of the Constitution. Most importantly, notice of the

Republican-intended challenge and subsequent hearing was sent

to the 35,000 voters far too late to be of any use to the

challengee. In fact, the notice was sent so late, that many

did not receive it before the election at all, and the court

found that ineffective notice must have been the intent:

``The Defendants' intended timing and manner of sending

notice is not reasonably calculated to apprise Plaintiff

Voters of the hearing regarding the challenge to their

registrations, nor to give the them opportunity to present

their objections, as demonstrated by the individual

situations of Plaintiffs Miller and Haddix . . . it seems

that Defendants intend to send the notice to an address which

has already been demonstrated to be faulty.''

The court also found that the challenge statute in general

was not narrowly tailored enough justify the ``severe''

burden on voters. While the state's interest in preventing

fraudulent voting was compelling, there were other ways to do

that besides allowing partisan groups to arbitrarily

challenge voters.

Analysis

Although the ``caging'' tactics targeting 35,000 new voters

by the Ohio Republican Party were eventually struck down, it

is likely they had a negative impact on the inclination of

minorities to vote, although, it is difficult to develop a

specific estimate.

The caging tactics were clearly both discriminatory and

illegal. All three district court cases ruled in favor of the

plaintiffs, finding the challenges to be politically and

racially charged, and burdening the fundamental right to

vote. As one court stated, ``This Court recognizes that the

right to vote is one of our most fundamental rights.

Potential voter intimidation would severely burden the right

to vote. Therefore, the character and magnitude of

Plaintiffs' asserted injury is substantial.'' It went on to

note that the right to vote is paramount to any interest in

challenging other people: ``. . . Plaintiff's right to cast

votes on election day is a fundamental right. The

challengers, however, do not have a fundamental right to

challenge other voters. These decisions correctly overturned

these caging and challenging activities because they violated

the right to equal protection, due process, and Ohioans'

fundamental right to vote.

Ralph Neas, President of the People for the American Way

Foundation, emphasized the seriousness of these tactics when

he testified that ``the 35,000 people that were threatened

with being challenged. That's not the spirit of democracy;

that's the spirit of suppression. [The Republican Party] did

everything to minimize the vote in the urban areas and to

engage in voter suppression, and I hope the hearings really

emphasize this. I think that prosecution is something that

should be considered with respect to what happened in Ohio.''

5. Targeting Minority and Urban Voters for Legal Challenges

Facts

The Ohio Republican Party, which Secretary Blackwell helped

lead as Chair of the Bush-Cheney campaign in Ohio, engaged in

a massive campaign to challenge minority voters at the polls.

The Republican Party lined up poll challengers for 30 of

Ohio's 88 counties, and the vast majority were focused in

minority and urban areas. In addition to intimidating

minority voters, this scheme helped lead to increased delays

and longer waits in voting lines in these areas. This was a

particularly damaging outcome on a day of severe adverse

weather in Ohio. As a federal court looking at these issues

concluded: if challenges are made with any frequency, the

resultant distraction and delay could give rise to chaos

and a level of voter frustration that would turn qualified

electors away from the polls.

Three separate courts issued opinions expressing serious

concerns with Ohio's voter challenge processes. At the state

level, Cuyahoga County Common Pleas Judge John O'Donnell

found that Secretary Blackwell exceeded his authority in

issuing a directive that let each political party have

multiple challengers at each polling place. While the

Democratic Party registered only one challenger per polling

place, the Republican Party had registered one challenger for

each precinct (there are multiple precincts in many polling

places). Judge O'Donnell found the directive to be

``unlawful, arbitrary, unreasonable and unconscionable,

coming four days after the deadline for partisan challengers

to register with their county boards of elections.'' An

attorney with the Ohio Attorney General's office, Jeffrey

Hastings, admitted to Judge O'Donnell that Secretary

Blackwell had changed his mind in first limiting challengers

to one per polling place and then, after the October 22

challenger registration deadline, allowing multiple

challengers.

Two federal district court judges also found the challenge

procedure to be problematic and tantamount to voter

disenfranchisement. In one lawsuit, the plaintiffs were

Donald and Marian Spencer, an elderly African-American couple

who alleged the challenge statute harkened back to Jim Crow

disenfranchisement. In her opinion rejecting the GOP

challenger system, U.S. District Court Judge Susan Dlott

wrote that ``there exists an enormous risk of chaos, delay,

intimidation and pandemonium inside the polls and in the

lines out the door.'' In the other district court case,

Summit County Democratic Central and Executive Committee, et.

al. v. Blackwell, Judge John R. Adams noted the risk that

``the integrity of the election may be irreparably harmed.''

``If challenges are made with any frequency,'' he wrote,

``the resultant distraction and delay could give rise to

chaos and a level of voter frustration that would turn

qualified electors away from the polls.''

Judge Dlott also noted the racial disparity inherent in

challenges, citing that only 14% of new voters in white areas

would face challenges while up to 97% of new voters in black

areas would face them. The Chair of the Hamilton County Board

of Elections, Timothy Burke, was an official defendant in the

lawsuit but testified the use of the challenges was

unprecedented. Chairman Burke stated that the Republican

Party had planned for challengers at 251 of Hamilton County's

1013 precincts; 250 of the challenged precincts have

significant black populations.

Both federal courts blocking the use of challengers

highlighted that challengers were not needed because Ohio law

already safeguarded elections from voter fraud by the use of

election judges. In particular, Ohio law mandates that four

election judges staff each polling place and provides that

the presiding judge of each group can make decisions

regarding voter qualifications.

Although Secretary Blackwell reversed his position and

issued a statement on October 29, 2004, excluding challengers

from polling places, his position became less relevant when

Jim Petro, Ohio's Attorney General, argued in favor of the

challenges taking place and said the Secretary's new

statement was unlawful. Seeing the irony in these conflicting

opinions, Judge Dlott asked ``how can the average election

official or inexperienced challenger be expected to

understand the challenge process if the two top election

officials cannot?''

These two lower court rulings did not stand. The Sixth

Circuit Court of Appeals reversed the two lower court

opinions on a 2-1 vote. The Supreme Court of the United

States denied the applications to vacate the 6th Circuit's

stays of the lower court rulings. While troubled about the

``undoubtedly serious'' accusation of voter intimidation,

Justice John Paul Stevens said the full Court could not

consider the case because there was insufficient time to

properly review the filings and submissions.

Analysis

The decision by the Ohio Republican Party to utilize

thousands of partisan challengers in the voting booths

undoubtedly had an intimidating and negative impact on

minority voters. While it is difficult to estimate how many

voters were disenfranchised by the

challenger program, given the adverse weather conditions and

the lack of trained pollworkers, the disruptions caused by

challengers could easily have reduced minority turnout by

tens of thousands of voters, if not more. It is noteworthy

that these disruptions were predicted by Republican

officials: ``Mark Weaver, a lawyer for the Ohio Republican

Party, acknowledged, `[the challenges] won't be resolved

until [Election Day], when all of these people are trying to

vote. It can't help but create chaos, longer lines and

frustration.' He reiterated that `challengers at the polls]

were bound to slow things down.' '' This will lead to long

lines.

While the program of challenging voters was ultimately

upheld, after a series of back and forth decisions, clearly

this is an issue which harkens back to the ``Jim Crow'' era.

As U.S. District Court Judge John R. Adams wrote in his

Summit County opinion: ``In light of these extraordinary

circumstances, and the contentious nature of the imminent

election, the Court cannot and must not turn a blind eye to

the substantial likelihood that significant harm will result

not only to voters, but also to the voting process itself, if

appointed challengers are permitted at the polls on November

2. . . . The presence of appointed challengers at the polls

could significantly impede the electoral process, and

infringe on the rights of qualified voters.''

As a result, the Ohio challenger system deserves

reconsideration by the legislature or further judicial

appeal.

6. Denying Absentee Voters Who Never Got Their Ballots the Right to a

Provisional Ballot

Facts

Secretary Blackwell also issued a ruling preventing the

issuance of provisional ballots for voters who requested

absentee ballots, even if they failed to receive them by the

official deadline or did not receive them at all. Despite the

fact that these errors occurred on the part of the Ohio

government and not the voters, Secretary Blackwell determined

they should not receive provisional ballots at the polls.

A lawsuit filed by a college student, Sara White, who never

received her absentee ballot and was denied a provisional

one, led to a ruling that other similar voters must be

issued provisional ballots. The court ordered Lucas County

to start providing provisional ballots, and directed

Secretary Blackwell to advise all Boards of Elections of

the same within 30 minutes. The legal ruling overturning

Mr. Blackwell's restrictive ruling on absentee ballots

came late in the afternoon, and as a result, many voters

intending to vote that day were prevented from doing so.

Analysis

Mr. Blackwell's decision to prevent those voters who

requested absentee ballots, but did not receive them on a

timely basis, from being able to vote, also likely

disenfranchised many voters, particularly seniors who were

turned away from the polls before the decision was known.

The federal court found that Mr. Blackwell's decision

clearly violated HAVA: ``HAVA is clear; that all those who

appear at a polling place and assert their eligibility to

vote irrespective of the fact that their eligibility may be

subject to question by the people at the polling place or by

the Board of Elections, shall be issued a provisional

ballot.'' In addition, this restrictive directive also likely

constituted violations of Article S, Section 1 of the Ohio

Constitution, granting every Ohio citizen the right to vote

if he or she is otherwise qualified.

7. Denying Access to the News Media

Facts

Secretary Blackwell also sought to prevent the news media

and exit poll takers from locating themselves within 100 feet

of polling places. This would have been the first time in

thirty years in which reporters were prevented from

monitoring polls. Media organizations challenged the barrier,

leading to a U.S. Court of Appeals for the Sixth Circuit

ruling that struck down Secretary Blackwell's decision. In

its opinion, the court noted that ``democracies die behind

closed doors'' and found that the district court's ruling had

``interpreted and applied the statute overly broadly in such

a way that the statute would be violative of the first

amendment''.

Analysis

Mr. Blackwell's decision to prevent news media and exit

polls from interviewing Ohio citizens after they voted

constitutes a clear violation of the First Amendment's

guarantee that state conduct shall not abridge ``freedom . .

. of the press.'' His decision also likely violated Ohio's

own Constitution that provides: ``Every citizen may freely

speak, write, and publish his sentiments on all subjects,

being responsible for the abuse of the right; and no law

shall be passed to restrain or abridge the liberty of speech,

or of the press.'' His decision does not appear to have had

any negative impact on the vote, but potentially made it more

difficult for the media to uncover voting irregularities,

discrepancies, and disenfranchisement.

B. Election Day

1. County-Specific Issues

Warren County--Counting in Secret Because of a Terrorist Threat?

Facts

On election night, Warren County, a traditional Republican

stronghold, locked down its administration building and

barred reporters from observing the counting. When that

decision was questioned, County officials claimed they were

responding to a terrorist threat that ranked a ``10'' on a

scale of 1 to 10, and that this information was received from

an FBI agent. Despite repeated requests, County officials

have declined to name that agent, however, and the FBI has

stated that it had no information about a terror threat in

Warren County.

Warren County officials have given conflicting accounts of

when the decision was made to lock down the building. While

the County Commissioner has stated that the decision to lock

down the building was made during an October 28 closed-door

meeting, e-mailed memos--dated October 25 and 26--indicate

that preparations for the lockdown were already underway.

Statements also describe how ballots were left unguarded

and unprotected in a warehouse on Election Day, and they were

hastily moved after county officials received complaints.

It is important to view the lockdown in the context of the

aberrant results in Warren County. An analyst who has

received all the vote data for 2000 and 2004 by precinct in

several Ohio counties did a detailed analysis of the greatest

increase in votes for President Bush by precinct, and the

Bush-Kerry margin in Warren County. The analyst revealed that

Warren County first did a lockdown to count the votes, then

apparently did another lockdown to recount the votes later,

resulting in an even greater Bush margin and very unusual new

patterns.

Moreover, in the 2000 Presidential election, the Democratic

Presidential candidate, Al Gore, stopped running television

commercials and pulled resources out of Ohio weeks before the

election. He won 28% of the vote in Warren County 223 In

2004, the Democratic Presidential candidate, John Kerry,

fiercely contested Ohio and independent groups also put

considerable resources into getting out the Democratic vote.

Moreover, unlike in 2000, independent candidate Ralph Nader

was not on the Ohio ballot in 2004. Yet, the tallies reflect

John Kerry receiving exactly the same percentage, 28 percent,

in Warren County as Gore received.

In support of his assertion that there was no wrongdoing in

Warren County, Secretary Blackwell has referred to a

Democratic election observer in Warren County, Jeff Ruppert,

who has said he observed nothing inappropriate at the County

administration building. While we have no reason to doubt Mr.

Ruppert's truthful account of what he actually observed, a

complete review of his statements shows numerous problems at

the building. At the outset, Mr. Ruppert acknowledges that he

was subject to the lockout and had to present identification

to even be admitted to the building. Once he gained

admission, Mr. Ruppert said he did ``have concerns over how

provisional ballots were handled at polling places--which he

said seemed to be inconsistent.'' He also points to a number

of areas he observed that were centers of activity (ballots

being transferred from vehicles, precinct captains

accompanying ballots in elevators, and ballots being stored),

but it clearly would have been impossible for Mr. Ruppert to

observe all of these activities at the same time. Finally,

considering that he left before the ballot count was

completed, it is inaccurate to state with certainty that

there were no problems in Warren County.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Given the total lack of explanation by Mr. Blackwell or

Warren County officials, it is not implausible to assume that

someone is hiding something. We do not know whether what

happened is simply a miscommunication or mix up, where an

election official misunderstood an FBI directive. If that

were the case, it would seem to be an easy matter to dispel

the confusion surrounding this episode. Given that no such

explanation has been forthcoming and given the statistical

anomalies in the Warren County results, it is impossible to

rule out the possibility that some sort of manipulation of

the tallies occurred on election night in the locked down

facility. The disclosure that the decision to lock down the

facility the Thursday before the election, rather than on

election day would suggest the lockdown was a political

decision, not a true security risk. If that was the case, it

would be a violation of the constitutional guarantees of

equal protection and due process, the Voting Rights Act, and

Ohio right to vote. We believe it is the statutory duty for

the Secretary of State to investigate irregularities of this

nature.

Mahoning County--Innumerable Flipped Votes and Extra Votes

Facts

We have received numerous reports of transfers of votes for

Senator Kerry to votes for President Bush. Specifically, in

Youngstown, the Washington Post reported that their

investigation revealed 25 electronic machines transferred an

unknown number of Kerry votes to the Bush column. Jeanne

White, a veteran voter and manager at the Buckeye Review, an

African American newspaper, stepped into the booth, pushed

the button for Kerry--and watched her vote jump to the Bush

column. ``I saw what happened; I started screaming: `They're

cheating again and they're starting early!' '' The Election

Protection Coalition also confirmed

these voting ``glitches'' noting that a ``voter reported

`Every time I tried to vote for the Democratic Party

Presidential vote the machine went blank. I had to keep

trying, it took 5 times.' ''

The voting machine in Youngstown experienced what election

officials called ``calibration problems.'' Thomas McCabe,

Deputy Director of the Mahoning County Board of Elections,

stated that the problem ``happens every election'' and

``[i]t's something we have to live with and we can fix it.''

There is also information, still being investigated, that

in several precincts, there were more votes counted by

machine than signatures in poll books (which includes

absentee voters). This would mean that more people voted by

machine at a precinct than actually appeared at that

location. For example, in CMP 4C Precinct, there were 279

signatures and 280 machine votes. In BLV 1 Precinct, there

were 396 signatures but 398 machine votes. In AUS 12

Precinct, there were 372 signatures but 376 machine votes. In

POT 1 Precinct, there were 479 signatures but 482 machine

votes, and in YGN 6F Precinct, there were 270 signatures but

273 machine votes. It would appear from these numbers that

the machines counted more votes than voters.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Evidence strongly suggests many individuals voting in

Mahoning County for Senator Kerry had their votes recorded

for President Bush. Due to lack of cooperation from Secretary

of State Blackwell, we have not been able to ascertain the

number of votes that were impacted or whether the machines

malfunctioned due to intentional manipulation or error. This

determination would help us determine if the Voting Rights

Act was also violated. Ascertaining the precise cause and

culprit could help ensure that the error does not occur in

the future. Secretary of State Blackwell's apparent failure

to initiate any investigation into this serious computer

error would seem inconsistent with his statutory duty to

review these matters.

Butler County--The Strange Case of the Downballot Candidate

Outperforming the Presidential Candidate

In Butler County, a Democratic candidate for State Supreme

Court, C. Ellen Connally, received 59,532 votes. In contrast,

the Kerry-Edwards ticket received only 54,185 votes, 5,000

less than the State Supreme Court candidate. Additionally,

the victorious Republican candidate for State Supreme Court

received approximately 40,000 less votes than the Bush-Cheney

ticket. Further, Connally received 10,000 or more votes in

excess of Kerry's total number of votes in five counties and

5,000 more votes in excess of Kerry's total in ten others.

According to media reports of Ohio judicial races,

Republican judicial candidates were ``awash in cash,'' with

more than $1.4 million in campaign funding, as well as

additional independent expenditures made by the Ohio Chamber

of Commerce.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

It appears implausible that 5,000 voters waited in line to

cast votes for an underfunded Democratic Supreme Court

candidate and then declined to cast a vote for the most well-

funded Democratic Presidential campaign in history. We have

been able to ascertain no answer to the question of how an

underfunded Democratic State Supreme Court candidate could

receive such a disproportionately large number of votes in

Butler County over the Kerry Edwards ticket. This raises the

possibility that thousands votes for Senator Kerry were lost,

either through manipulation or mistake. The loss of these

votes would likely violate constitutional protections of

equal protection and due process; if manipulation is

involved, that would also violate the Voting Rights Act and

Ohio election law. This anomaly calls for an investigation,

which Mr. Blackwell has failed to initiate.

Cuyahoga County--Palm Beach County for Pat Buchanan-Redux?

Facts

It has been well documented that a flawed Palm Beach County

ballot design in the 2000 Florida Presidential election may

well have cost Al Gore thousands of votes, by misrecording

such votes as votes for Pat Buchanan. A similar problem may

well have occurred in Cleveland in 2004.

Precincts in Cleveland have reported an incredibly high

number of votes for third party candidates who have

historically received only a handful of votes from these

urban areas. For example, precinct 4F in the 4th Ward cast

290 votes for Kerry, 21 for Bush, and 215 for Constitution

Party candidate Michael Peroutka. In 2000, the same precinct

cast less than 8 voters for all third party candidates

combined. This pattern is found in at least 10

precincts throughout Cleveland in 2004, awarding hundreds

of unlikely votes to the third party candidate. Notably,

these precincts share more than a strong Democratic

history; they share the use of a punch card ballot. This

problem was created by the combination of polling sites

for multiple precincts, coupled with incorrect information

provided by poll workers.

In Cuyahoga County, each precinct rotates candidate ballot

position. Therefore, each ballot must go into a machine

calibrated for its own precinct in order for the voter's

intent to be counted. In these anomalous precincts, ballots

were fed into the wrong machine, switching Kerry votes into

third party votes. This was done on the advice of poll

workers who told voters that they could insert their ballots

into any open machine--and machines were not clearly marked

indicating that they would work only for their designated

precinct.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

It appears that hundreds, if not thousands, of votes

intended to be cast for Senator Kerry were recorded as being

for a third party candidate. At this point it is unclear

whether these voting errors resulted from worker negligence

and error or intentional manipulation. While Cuyahoga County

election official Michael Vu said he would investigate, there

has been no further explanation about what will be done to

remedy this situation, and Secretary of State Blackwell has

refused to cooperate in our investigation or pursue his own

inquiry. In any event, those voters whose votes were not

properly counted suffered a violation of their constitutional

protections of equal protection and due process; if

intentional manipulation is involved, this would also

implicate the Voting Rights Act and Ohio election law.

Franklin County (Gahana)--How does a computer give George W. Bush

nearly 4,000 extra votes?

Facts

On election day, a computerized voting machine in ward 1B

in the Gahana precinct of Franklin County recorded a total of

4,258 votes for President Bush and 260 votes for Democratic

challenger John Kerry. However, there are only 800 registered

voters in that Gahana precinct, and only 638 people cast

votes at the New Life Church polling site. It has since been

discovered that a computer glitch resulted in the recording

of 3,893 extra votes for President George W. Bush--the

numbers were adjusted to show President Bush's true vote

count at 365 votes and Senator Kerry's at 260 votes.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

At this point it is unclear whether the computer glitch was

intentional or not, as we have received no cooperation from

Secretary Blackwell or other authorities in resolving the

question. In order to resolve this issue for future

elections, it must be determined how it was initially

discovered that such a computer glitch did and could occur

and what procedures were employed to alert other counties

upon the discovery of the malfunction. Further, a

determination should be made as to whether we can be

absolutely certain that this particular malfunction did not

occur in other counties in Ohio during the 2004 Presidential

election, and what actions have been taken to ensure that

this type of malfunction does not happen in the future.

Miami County--Where did nearly 20,000 extra votes for George W. Bush

come from?

Facts

In Miami County, voter turnout was a highly suspect and

improbable 98.55 percent. With 100% of the precincts

reporting on Wednesday, November 3, 2004, President Bush

received 20,807 votes, or 65.80% of the vote, and Senator

Kerry received 10,724 votes, or 33.92% of the vote. Thus,

Miami reported a total of 31,620 voters. Inexplicably, nearly

19,000 new ballots were added after all precincts reported,

boosting President Bush's vote count to 33,039, or 65.77%,

while Senator Kerry's vote percentage stayed exactly the same

to three one-hundredths of a percentage point at 33.92

percent. Roger Kearney of Rhombus Technologies, Ltd., the

reporting company responsible for vote results of Miami

County, stated that the problem was not with his reporting

and that the additional 19,000 votes were added before 100%

of the precincts were in.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Mr. Kearney's statement does not explain how the vote count

could change for President Bush, but not for Senator Kerry,

after 19,000 new votes were added to the roster. Thus, we are

primarily concerned with identifying a valid explanation for

the statistical anomaly that showed virtually identical

ratios after the final 20-40% of the votes were counted.

Specifically, we have received no explanation as to how the

vote count in this particular county could have changed for

President Bush, but not for Senator Kerry,

after 19,000 new votes were added to the roster. The vote

results in Miami constitute yet another significant anomaly

in the tens of thousands range without any explanation or

investigation by Secretary of State Blackwell, leading us to

conclude that there is likely some vote error or vote

manipulation. This could constitute a violation of

constitutional guarantees of equal protection and due process

and, if intentional, would likely violate the Voting Rights

Act and Ohio election law.

Perry County--Discrepancy in Number of Votes and Voters

Facts

The House Judiciary Committee Democratic staff has received

information indicating discrepancies in vote tabulations in

Perry County. Similar discrepancies have been found in other

counties. For example, in Trumbull County there are

apparently more absentee votes than absentee voters according

to a recent study. For example, the sign-in book for the

Reading S precinct indicates that approximately 360 voters

cast ballots in that precinct. In the same precinct, the

sign-in book indicates that there were 33 absentee votes

cast. In sum, this would appear to mean that fewer than 400

total votes were cast in that precinct. Yet, the precinct's

official tallies indicate that 489 votes were cast. In

addition, some voters' names have two ballot stub numbers

listed next to their entries, creating the appearance that

voters were allowed to cast more than one ballot.

In another precinct in Perry County, W Lexington G AB, 350

voters are registered according to the County's initial

tallies. Yet, 434 voters cast ballots. As the tallies

indicate, this would be an impossible 124% voter turnout. The

breakdown on election night was initially reported to be 174

votes for Bush, and 246 votes for Kerry. We are advised that

the Perry County Board of Elections has since issued a

correction claiming that, due to a computer error, some votes

were counted twice. We are advised that the new tallies state

that only 224 people voted, and the tally is 90 votes for

Bush and 127 votes for Kerry. This would make it appear that

virtually every ballot was counted twice, which seems

improbable.

In Madison Township, Precinct AAS, a review of the poll

books shows that 481 people signed in to vote on election

day, yet the Perry County Board of Elections is reporting

that 493 votes were cast in that precinct, a difference of 13

votes. The same discrepancy appears with respect to Monroe

Township AAV. The poll books show that 384 people signed in

on election day to vote, while the Perry County Board of

Elections reports that 393 votes were cast, a difference of 9

votes.

We have also received information that in at least three

precincts, Pike West AAY, New Lexington I AB, and Redfield

AAC, more signatures appear in the sign-in books than votes

cast. This would indicate that votes may have been thrown

out.

In Perry County, there appears to be an extraordinarily

high level of 91% voter registration; yet, a substantial

number of these voters have never voted and have no signature

on file. Of the voters that are registered in Perry County,

an extraordinarily large number of voters are listed as

having registered in 1977, a year in which there were no

federal elections. Of these, an exceptional number are listed

as having registered on the exact same day: in total, 3,100

voters apparently registered in Perry County on November 8,

1977.

In addition, according to a Democratic staff count of the

poll books, there are approximately 751 registered voters in

Madison Township AAS, while the Perry County Board of

Elections reports that there are 850 registered voters in

that township.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Clearly, there is an unexplained discrepancy between the

actual vote tallies and the number of registered voters in

various precincts as well as other statistical anomalies in

the County. Given the lack of any explanation to date, and an

absence of willingness by Secretary Blackwell or any other

authorities to explain or investigate these irregularities,

it is not inconceivable that some sort of vote tampering has

occurred. If so, that would likely constitute a denial of the

constitutional guarantees of equal protection and due

process, the Voting Rights Act, and Ohio election law.

Republicans in the State of Washington are currently citing

such ``mystery voters'' as evidence of fraud. The State

Republican Chairman has commented, ``people ask me what fraud

would look like? It would look like this.

2. Myriad Other Problems and Irregularities

We learned of literally thousands upon thousands of

additional irregularities in Ohio. As a matter of fact, the

Election Protection Commission has testified that to date,

there have been over 3,300 incidents of voting irregularities

entered for Ohio alone. The following is a brief highlight of

some of the more egregious irregularities we have learned of

during the course of our investigation:

a. Intimidation and Misinformation

Facts

In the course of our hearings we learned:

The NAACP testified that it received over 200 calls

regarding incidents of suspected voter intimidation or

unusual election related activities, particularly actions

taken by challengers who intimidated poll workers and voters.

Other specific incidents involved a caller who reported that

someone was going door-to-door telling people they were not

registered to vote. A voter in Franklin County received

information in the mail identified as being from the state

that said he would have to vote by provisional ballot because

he had moved; in fact, the voter had not moved and had lived

at the address for 10-15 years. One polling place worker was

only asking African American voters for their address. A new

voter was told that there were vote challengers at her

precinct. When she was voting, she was confused by the punch

cards. She was afraid to ask poll workers for help for fear

that she would be challenged. Vote challengers were demanding

that voters provide ID, leading many people to leave. This

egregious behavior should be curtailed by the state.

In Franklin County, a worker at the Holiday Inn observed a

team of 25 people who called themselves the ``Texas Strike

Force'' using payphones to make intimidating calls to likely

voters, targeting people recently in the prison system. The

``Texas Strike Force'' members paid their way to Ohio, but

their hotel accommodations were paid for by the Ohio

Republican Party, whose headquarters is across the street.

The hotel worker heard one caller threaten a likely voter

with being reported to the FBI and returning to jail if he

voted. Another hotel worker called the police, who came but

did nothing.

Phone calls incorrectly informed voters that their polling

place had changed.

The Cleveland Plain Dealer found that several Lake County

residents received an official-looking letter on Board of

Elections letterhead informing them that their polling place

had changed or that they were not properly registered to

vote.

On election day, a fake voter bulletin from Franklin County

Board of Elections was posted at polling locations, and

fliers were distributed in the inner city, telling

Republicans to vote on Tuesday and Democrats to vote on

Wednesday due to unexpected heavy voter registration.

In Cleveland, the Washington Post reported that unknown

volunteers began showing up at voters' doors illegally

offering to collect and deliver complete absentee ballots to

the election office.

The Election Protection Coalition testified that in

Franklin County, voters received fliers informing them that

they could cast a ballot on November 3.

In Franklin County there were reports that about a dozen

voters were contacted by someone claiming to be from the

county board of elections, telling them their voting location

was changed.

``Door-hangers'' telling African-American voters to go to

the wrong precinct were distributed.

Analysis

The use of intimidation and misinformation in Ohio on

election day was widespread and pervasive and clearly

suppressed the vote. The NAACP testified that they received

over 200 complaints of such acts in Ohio, so it is likely the

actual number of incidents ranged in the thousands, if not

higher. It is difficult to estimate how many of these

incidents actually resulted in lost votes.

These incidents of voter intimidation and misinformation

clearly violate the Voting Rights Act, the Civil Rights Act

of 1968, Equal Protection, Due Process and the Ohio right to

vote. The fact that Secretary Blackwell did not initiate a

single investigation into these many serious allegations may

represent a violation of his statutory duty to investigate

election irregularities. Cases of intimidation and

misinformation such as we have seen in Ohio appear to have

become a regular feature of our election landscape and would

appear to warrant the development of a stronger investigative

and law enforcement system than we have at present, at both

the state and federal levels.

b. Machine Irregularities

Facts

In the course of our hearings we learned:

In Auglaize County, there were voting machine errors. In a

letter dated October 21, 2004, Ken Nuss, former deputy

director of the County Board of Elections, claimed that Joe

McGinnis, a former employee of ES&S, the company that

provides the voting systems in Auglaize County, had access to

and used the main computer that is used to create the ballot

and compile election results. Mr. McGinnis's access to and

use of the main computer was a violation of county board of

election protocol. After calling attention to this

irregularity in the voting system, Mr. Nuss was suspended and

then resigned.

In Cuyahoga County and Franklin County, there were voting

machine errors with respect to absentee ballots. The arrows

on the absentee ballots did not align with the correct punch

hole. This likely led to voters casting a vote for a

candidate other than the candidate they intended to support.

In Mahoning County, one precinct in Youngstown recorded a

negative 25 million votes.

In Mercer County, one voting machine showed that 289 people

cast punch card ballots, but only 51 votes were recorded for

president. The county's website appeared to

show a similar anomaly, reporting that 51,818 people cast

ballots but only 47,768 ballots were recorded in the

presidential race, including 61 write-ins, meaning that

approximately 4,000 votes, or nearly 7%, were not counted for

a presidential candidate.

At our Washington, D.C. hearing, investigative journalist

Bob Fitrakis highlighted malfunctions in Lucas County: ``When

the machines in Lucas County, which is a heavily Democratic

county, when they are locked in the principal's office and

nobody may vote at that site; when they're going wrong all

day, and the [Lucas County Election Director Paula Hicks-

Hudson] admits the test failed prior to that, and the

software is provided, of course, by Diebold, whose CEO,

Walden O'Dell, is a member of President Bush's Pioneer and

Ranger team, has visited the Crawford ranch and wrote a

letter promising to deliver the electoral votes of Ohio, one

has to be somewhat suspect.

In Hamilton County, the Washington Post learned many

absentee ballots did not include Kerry's name because workers

accidentally removed Kerry when removing Ralph Nader's name

from the ballots.

Analysis

There is no doubt that there were a number of machine

irregularities and glitches in the election, beyond the major

discrepancies highlighted earlier in our report However, it

is difficult for us to quantify the number of votes that were

altered or affected by these irregularities.

Given the lack of cooperation we have received from the

Secretary of State's office, it is difficult for us to

ascertain whether the glitches were the result of mistake,

negligence, or intentional misconduct. Depending on the type

of misconduct involved, these errors may constitute

violations of the Voting Rights Act, Equal Protection and

Due Process, and Ohio's right to vote. Morever, it would

appear that Secretary Blackwell's apparent failure to

follow-up on these machine errors by way of an

investigation would violate his duty to investigate

election law irregularities.

The role of voting machines and computers in our election

represents an increasingly serious issue in our democracy.

Our concerns are exacerbated by the fact that there are very

few companies who manufacture and operate voting machines,

and they tend to be controlled by executives who donate

largely, if not exclusively, to the Republican Party and

Republican candidates. Issues such as the need for verifiable

paper trails and greater accountability all warrant further

investigation and possibly legislation.

c. Registration Irregularities and Official Misconduct and

Errors

Facts

In the course of our hearings we learned:

A Washington Post investigation found that many longtime

voters discovered their registrations had been purged.

Numerous voters were incorrectly listed on roster as

felons, and thus not allowed to vote.

The NAACP testified to receiving over 1,000 calls related

to voter registration issues, generally from individuals who

were not on the voter rolls even though they had voted in

previous elections, individuals with questions on how to

register, and individuals with concerns about not receiving a

voter registration card.

The Election Protection Coalition found that ``Individuals

frequently reported having `disappeared' from the voter rolls

. . . Many individuals expressed concerns that they had

registered but never received confirmation or were not listed

on the voter rolls at the precincts.''

At our Columbus, Ohio hearing, several documented problems

in Cuyahoga County were brought to our attention by the

Greater Cleveland Voter Registration Coalition (GCVRC). GCVRC

registered approximately 10,000 voters before the 2004

elections, yet when they tracked the registrations, 3.5% were

either not entered at all or entered incorrectly, completely

disenfranchising the applicants. While the board of Cuyahoga

County was alerted to this problem as early as September, no

corrective measures were taken. Projected out county-wide,

over 10,000 people were likely not correctly registered and

lost their right to vote. These registration problems led to

provisional ballots being thrown out.

The NAACP reported that many voters complained they were

asked to show ID when they thought it was unnecessary or were

unable to vote because they lacked proper ID. At several

locations in Cuyahoga County, all voters were being asked for

ID, not just new voters. A voter called to say that all

voters are being asked for ID. The poll workers were checking

the address of the voter against the address on the

registration and if they did not match, the voter was being

turned away, often without casting a provisional ballot. In

still another case, a voter was challenged because the

address on the ID did not match the registration address (but

was in the same precinct).

There were numerous cases where election workers sent

voters to the wrong precinct.

A voter stated that a polling place in Cleveland ran out of

ballots, and put in an emergency request for ballots but did

not receive them.

The Associated Press reported that officials ticketed

lawfully parked cars at the polling stations.

Election protection volunteers received complaints about

provisional ballots from voters, many of whom reported being

denied the opportunity to vote by provisional ballot. Some

polling places either ran out of provisional ballots or never

had any at their location. For example: a voter registered to

vote in September. When she went to the polling place in

Cuyahoga County on Election Day, they said she was not

registered and they refused to give her a provisional ballot.

In Franklin County, some voters, who were in line to vote,

but outside of the doors to the polling place, were sent home

at 7:30 p.m. when the polls closed.

Analysis

Just as we witnessed in the Florida presidential debacle

four years ago, improper purging and other errors by election

officials represent a very serious problem and have a

particularly negative impact on minority voters. The fact

that the Greater Cleveland Voter Registration Coalition

projects that in Cuyahoga County alone over 10,000 Ohio

citizens lost their right to vote as a result of official

registration errors and that the NAACP received more than

1,000 purging complaints on election day indicate that the

overall number of voters who may have been disenfranchised as

a result of official mistakes and wrongful purging is in the

scores of thousands, if not more. Congressional passage of

HAVA's provisional ballot requirement was intended to

mitigate errors such as this, but Secretary Blackwell's

unduly narrow interpretation of this requirement, as well as

weak rules for counting and checking provisional ballots,

have made it far less likely that individuals whose

registration was wrongfully purged or never entered would be

able to receive a provisional ballot and have it counted.

Given the information we have, it is unclear whether

improper purging and other registration errors which appear

so prevalent in Ohio were the result of human mistake or

intentional misconduct. If it was intentional, a strong case

can be made that it violated the Voting Rights Act, Equal

Protection, Due Process, possibly the National Voter

Registration Act, as well as Ohio's right to vote law. The

Secretary of State's failure to investigate these

registration errors and other irregularities may also violate

his duties to do so under Ohio law.

HAVA funds were supposed to be used to implement a fairer

and more efficient registration system statewide.

Unfortunately, full funding has been delayed, and most

states, including Ohio, have received waivers from this

federal requirement.

3. General Problems

a. Spoiled Ballots--Hanging Chads Again?

Facts

Ohio had a significant number of spoiled votes--

approximately 93,000. These are ballots in which either no

presidential vote was recorded or multiple votes were

indicated and therefore ignored. For example, someone may not

have filled in his presidential choice dark enough for an

optical scan machine to read, but did fill it in clearly

enough to be a valid selection in a hand count. In addition,

a punch card voter may not have punched completely through

his choice, leaving a ``chad'' attached that could not be

read by the tabulator. However, that same chad could be read

in a hand count because Ohio law provides that hanging chads

may be considered valid votes as long as two corners are

detached.

According to a New York Times investigation, ``the problem

[with spoiled ballots] was pronounced in minority areas,

typically Kerry strongholds. In Cleveland ZIP codes where at

least 85% of the population is black, precinct results show

that one in 31 ballots registered no vote for president, more

than twice the rate of largely white ZIP codes where one in

75 registered no vote for president. Election officials say

that nearly 77,000 of the 96,000 [spoiled] ballots were punch

cards.''

One of the principal purposes of the recount in Ohio was to

ascertain the intent of these 93,000 ballots. However, by

manipulation or otherwise every county in Ohio but Coshocton

County avoided completing a full hand recount. This means

that the vast majority of these spoiled ballots will never be

reviewed.

The problem was particularly acute in two precincts in

Montgomery County which had an undervote rate of over 25%

each--accounting for nearly 6,000 voters who stood in line

to vote, but purportedly declined to vote for president.

This is in stark contrast to the 2% of undervoting county-

wide. Disturbingly, predominately Democratic precincts had

75% more undervotes than those that were predominately

Republican.

Secretary of State Blackwell has refused to answer any of

the questions concerning these matters posed to him by

Ranking Member Conyers and 11 other Members of the Judiciary

Committee on December 2, 2004.

Analysis

Given the high level of interest in the presidential

election in 2004, it is logical to assume that many of the

persons casting spoiled ballots intended to cast a vote for

president, so this irregularity alone could account for tens

of thousands of disenfranchised votes, with a

disproportionate amount being minority voters and Kerry

voters. One of the reasons Ohio has such a large number of

ballots is that the state relies so heavily on the outdated

and antiquated punch card system that proved to

be error prone in Florida. Sixty-eight of the 88 Ohio

counties still rely on the outdated punch card machines.

Thus, at least in the critical swing state of Ohio the

promise of HAVA funding to help states acquire better

equipment so that more votes could count has not been met.

With regard to the severe undercount voting figures in

Montgomery County, we have not received any cooperation from

Secretary Blackwell in ascertaining how this occurred. This

may have been due to some equipment or poll worker error or,

in the worst case, manipulation.

b. Exit Polls Bolster Claims of Irregularities and Fraud

Facts

An exit poll serves as a predictor of the final vote

results in an election. It is conducted by interviewing

voters about their vote selections as they are leaving the

polls. The process for conducting reliable exit polls was

largely created in 1967 by CBS News pollster and

statistician, Warren Mitofsky, now known as ``a world

recognized expert in exit polling in particular and public

opinion polling in general.'' Former Mexican President Carlos

Salinas credited Mr. Mitofsky's work for contributing to the

prevention of fraud and an increase in credibility in the

1994 election in Mexico.

The exit poll data taken on November 2, 2004, was compiled

by two well-respected firms--Mitofsky International and

Edison Media Research. Joseph Lenski, who conducted the exit

polls for Edison Media Research, trained in the field of exit

polling under Mr. Mitofsky before starting his own firm. They

conducted in 2004 exit polls under a contract from the

National Election Pool (NEP), a consortium of six news and

media organizations: the Associated Press, ABC, CNN, CBS,

NBC, and Fox.

In this year's election, the National Election Pool

conducted two types of exit polls: 73,000 voters were

interviewed in statewide polls, and an additional 13,000

voters were interviewed for a national poll. The national

poll's sample size was approximately six times larger than

the sample normally used in high quality pre-election

national polls. This poll size would normally yield a very

small margin of error and would be very accurate.

Furthermore, such a poll would normally result in a close

congruence between exit poll and official results. The sample

size for Ohio was 1,963 voters, which is quite large for

statistical purposes and equivalent to the 2,000 person norm

for most national polls. In addition, this year's poll

numbers were designed to account for absentee votes after a

large number of absentee votes contributed to the inaccurate

projections of the Florida race in 2000. This year, Mitofsky

and Edison began telephone surveys in key states before the

election to screen for absentee voters and create an accurate

estimate of their votes.

While exit pollsters caution against using their results to

predict election results, exit polls can be extremely

accurate, with only small variations from the official

outcomes in numerous elections. For example, in the three

most recent national elections in Germany, exit polls

differed from the final official vote counts by an average of

only 0.26%. Their results have proven to be very accurate;

correctly predicting the winner with no evidence of

systematic skew of the data. United States exit polls have

also been precise. Brigham Young University students' exit

poll results for Utah in this election indicated 70.8% for

Bush and 26.5% for Kerry.

The official results were 71.1 % for Bush and 26.4% for

Kerry.

In the Ohio election for 2004, early exit polls that were

released just after noon on November 2 showed that Senator

Kerry was leading President Bush by three percentage points.

Shortly after midnight on November 3, exit poll data

continued to indicate that 52.1% of Ohio voters selected

Senator Kerry and 47.9% selected President Bush. These

numbers, however, differed greatly from the final results of

the election; in the official results, President Bush led

Senator Kerry by 2.5 percentage points in Ohio.

National poll data showed a similar shift from a clear

advantage for Senator Kerry on Election Day to a victory for

President Bush on the day after the election. Data that was

provided by Edison/Mitofsky to the National Election Pool

members at 4 p.m. on Election Day showed Senator Kerry

leading 51% to 48%. These percentages held the same in the

data released at 7:30 p.m. that day. By the time Senator

Kerry conceded the election on Wednesday, November 3, the

Edison/Mitofsky poll numbers had been aligned with reported

vote counts. For the first time the poll numbers showed an

advantage for President Bush with 51% to Senator Kerry's 48%.

On December 3, 2004, Rep. Conyers requested the raw exit

poll data from Mitofsky International. Mr. Mitofsky replied

``The data are proprietary information gathered and held for

the benefit of those news organizations, and I am not at

liberty to release them.'' On December 21, 2004, as a follow-

up, Rep. Conyers requested the data directly from the news

wire and television companies that contracted with Mr.

Mitofsky and Mr. Edison for the data. Though the Congressman

has not received a response to his letter, Edie Emery, a

spokesperson for the NEP and a CNN employee, said the exit

poll data was still being analyzed and that the NEP's board

would decide how to release a full report in early 2005. ``To

release any information now would be incomplete,'' she said.

Furthermore, Jack Stokes, a spokesperson for the Associated

Press said, ``like Congressman Conyers, we believe the

American people deserve answers. We want exit polling

information to be made public as soon as it is available, as

we intended. At this time, the data is still being evaluated

for a final report to the National Election Pool.''

Analysis

Clearly something unusual is indicated by the differential

between the exit poll information we have obtained and the

final vote tallies in Ohio. It is rare, if not unprecedented,

for election results to swing so dramatically from the exit

poll predictions to the official results. Kerry was predicted

to win Ohio by a differential of 4.2 percentage points. The

official results showed Bush winning by 2.5 percentage

points. The differential between the prediction for Kerry and

the winning results for Bush represent a swing of 6.7

percentage points. According to University of Pennsylvania

Professor Steven Freeman, this ``exit poll discrepancy could

not have been due to chance or random error.'' Professor

Freeman has further concluded that statistical analysis shows

a probability of 1 in 1,000 that the difference

between Senator Kerry's share of the exit poll projection

and the official count of the vote would be as much as the

final 3.4% spread, a virtual impossibility. As a matter of

fact, there are broad statistical variations of up to 9

percentage points between exit poll data and official

results in Ohio and other key states in the 2004 election.

In state after state, Senator Kerry's advantage in the

exit poll results was lost by sizable margins.

The discrepancy between the exit polls and the official

vote count must be due to an inaccurate poll or an inaccurate

vote. Either there was unintentional error in the exit poll

or the official vote count, willful manipulation of the exit

poll or the official vote count, or other forms of fraud,

manipulation or irregularities occurred in the electoral

process. Pollsters Mitofsky and Lenski have intimated that

their poll numbers deviated from the official results because

a disproportionate number of Bush supporters refused to

participate in their polls. However, Professor Freeman posits

that part of the discrepancy is due to a miscount of the

vote.

As noted above, election polls are generally accurate and

reliable. Pollsters are able to categorize their sources of

error and develop extensive methodologies to limit those

errors with each successive poll. Political scientist Ken

Warren noted claims, ``. . . exit polling has become very

sophisticated and reliable, not only because pollsters have

embraced sound survey research techniques, but because they

have learned through experience to make valid critical

adjustment.'' In fact, prominent survey researchers,

political scientists and journalists ``concur that exit polls

are by far the most reliable'' polls.

Unfortunately, throughout American history various devices,

schemes and legal structures have been used to shape the

outcome of an election. Elections at every level of

government have been skewed by tactics that deny voting

rights, establish poll taxes, lose voter registrations,

disqualify voters and disqualify ballots to ensure a certain

outcome. The Florida election in 2000 provides ample evidence

that our system is rife with election irregularites that have

profound impacts on our election outcomes.

Elections are politically controlled, with extreme

pressures for certain outcomes. In our system, victory can

become more important than an accurate vote count. While

pollsters are privately hired based on their accuracy and

timely results, candidates and campaigns are primarily

concerned with winning. When key election officials are also

key campaign officials, as was the case in Florida in 2000

and in Ohio in 2004, the goal of providing an accurate vote

tally gets into the murky waters of winning the political

contest. But pollsters lose their legitimacy, and thus future

contracts, if they are not accurate. Thus, `` the systemic

pressures on polling accuracy are much greater than they are

on vote count accuracy.

While pollsters use feedback and detailed analysis to

improve their results, are motivated towards accuracy, and

face market competition if they fail to provide thorough,

accurate and timely exit poll results, ``there is little

competition, feedback and motivation for accuracy in election

processing.'' Thus we do not dismiss these exit poll results,

and their discrepancy with the official vote counts, as

others might do. We believe they provide important evidence

that something was amiss in the Ohio election.

Full, accurate and reliable statistical analysis cannot be

completed until the raw data from the exit polls is released.

The limited available ``uncalibrated'' or raw data indicates

the broad discrepancies that are discussed above. However, it

appears that the National Election Pool data was

``calibrated'' or corrected after the official results were

publicized. It may be standard practice to recalibrate poll

results to reflect the actual outcome ``on the assumption

that the [official] count is correct, and that any

discrepancies must have been due to imbalanced representation

in their samples or some other polling error.'' Thus data

that was publicized on Election Day showing these large

discrepancies is no longer publicly available; only the

recalibrated numbers are available on the Internet. An

independent, detailed analysis of the early exit poll data

is necessary to verify the actual outcome of the vote in

Ohio, and thus restore complete legitimacy to this

election. In any event, the discrepancies that we are

able to identify place the entire Ohio election results

under a cloud of uncertainty.

C. Post-Election

1. Confusion in Counting Provisional Ballots

Facts

Secretary Blackwell's failure to issue standards for the

counting of provisional ballots led to a chaotic and

confusing result such that each of Ohio's 88 counties could

count legal ballots differently or not at all. In turn, this

fostered a situation where subsequent to the election,

Cuyahoga County mandated that provisional ballots in yellow

packets must be ``rejected'' if there is no ``date of birth''

on the packet. This ruling was issued despite the fact that

the original ``Provisional Verification Procedure'' from

Cuyahoga County stated, ``Date of birth is not mandatory and

should not reject a provisional ballot'' and simply required

that the voter's name, address and a signature match the

signature in the county's database. The People for the

American Way Foundation sought a legal ruling ordering

Secretary Blackwell and the county elections board to compare

paper registration and electronic registration records.

People For the American Way further asked the Board to notify

each voter whose ballot was invalidated and how the

invalidation could be challenged. Neither of these actions

were taken.

In another case, while the state directed counties to

ensure voters had been registered during the thirty days

before the election, one college student who had been

registered since 2000 and was living away from home was

denied a provisional ballot.

Analysis

Mr. Blackwell's failure to articulate clear and consistent

standards for the counting of provisional ballots likely

resulted in the loss of several thousand votes in Cuyahoga

County alone, and untold more statewide. This is because the

lack of guidance and the ultimate narrow and arbitrary review

standards imposed in Cuyahoga County appear to have

significantly contributed to the fact that in Cuyahoga

County, 8,099 out of 24,472 provisional ballots, or

approximately one third, were ruled invalid, the highest

proportion in the state. This number is twice as high as the

percentage of provisional ballots rejected in 2000.

These series of events constitute a possible violation of

the Voting Rights Act, as not only were legitimate votes

apparently thrown out, they undoubtedly had a

disproportionate impact on minority voters, concentrated in

urban areas such as Cuyahoga County which had the highest

shares of the state's provisional ballots. The actions may

also violate Ohio's constitutional right to vote.

2. Justice Delayed is Justice Denied--Recounts were Delayed

Because of a Late Declaration of Results

Facts

Ohio law requires the Secretary of State to provide county

boards of elections with directives governing voting

procedures, voting machine testing, and vote tallying. Prior

to the election, Secretary Blackwell thus issued a directive

providing that Ohio boards of elections would have to

complete their official canvasses by December 1, almost one

month after the date of the 2004 election. The directive

further states that ``no recount may be held prior to

the official canvass and certification of results,'' so

that county boards would have to wait until Secretary

Blackwell decided to certify the results before proceeding

with recounts.

Ohio law also sets deadlines for the conduct of recounts.

First, applications for statewide recounts must be submitted

within five days of the Secretary of State's declaration of

results. Second, such recounts must begin within ten days of

the recount request. Secretary of State Blackwell gave county

boards of election until December 1 to certify their returns

and then waited to another five days, until December 6, to

certify the results. As a consequence, recounts could not be

sought until at least December 11, and were required to begin

by December 16. The Green/Libertarian recount began on

December 13, 2004. As a result, the recount was pending when

the Secretary of State sent certificates to electors on

December 7, and before the electoral college met on December

13. Because it appeared the Secretary of State had

intentionally delayed certification to ensure that the

recount could not be completed by these time periods, 11

Members of Congress, including Rep. Conyers, wrote to Gov.

Taft asking that they delay or treat as provisional the

December 13 meeting of the state's presidential electors.

The counties completed their recounts on December 28, 2004,

but due to a variety of irregularities and alleged legal

violations in the recount, they remain embroiled in

litigation as of the date of this report.

Analysis

The scenario created by Secretary Blackwell effectively

precluded recounts from being concluded prior to the December

13 meeting of electors. By setting the vote tally deadline so

late and then delaying the declaration of results--it took a

full 34 days after the November 2 election for the results to

be certified--Secretary of State Blackwell insured that the

time for completing recounts, therefore, was pushed to after

the date of the Electoral College meeting. As a result of

this intentional course of conduct, it appears that Mr.

Blackwell has ensured that the controversies concerning the

appointment of electors could not be resolved by December 7,

2004, thereby causing Ohio to lose the benefit of the

electoral college safe harbor so that there appointment of

electors is not necessarily binding on Congress. In addition,

this diminishment of the recount law may violate the voters'

right to equal protection and due process, as well as

undermine the entire import of Ohio's recount law.

3. Triad GSI--Using a ``Cheat Sheet'' to Cheat the Voters in

Hocking and Other Counties

Facts

Perhaps the most disturbing irregularity that we have

learned of in connection with the recount concerns the

activities and operations of Triad GSI, a voting machine

company. On December 13, 2004, House Judiciary Committee

Democratic-staff met with Ms. Sherole Eaton, Deputy Director

of Elections for Hocking County. She explained that on

Friday, December 10, 2004, Michael Barbian, Jr., a

representative of Triad GSI, unilaterally sought and obtained

access to the voting machinery and records in Hocking County,

Ohio.

Ms. Eaton witnessed Mr. Barbian modify the Hocking County

computer vote tabulator before the announcement of the Ohio

recount. She further witnessed Barbian, upon the announcement

that the Hocking County precinct was planned to be the

subject of the initial Ohio test recount, make further

alterations based on his knowledge of that information. She

also has firsthand knowledge that Barbian advised election

officials how to manipulate voting machinery to ensure that a

preliminary hand recount matched the machine count.

According to the affidavit, the Triad official sought

access to the voting machinery based on the apparent pretext

that he wanted to review some ``legal questions'' Ohio voting

officials might receive as part of the recount process. At

several times during his interaction with Hocking County

voting machines, Mr. Barbian telephoned into Triad's offices

to obtain programming information relating to the machinery

and the precinct in question. It is now known that Triad

officials have intervened in other counties in Ohio--Greene

and Monroe, and perhaps others.

In fact, Mr. Barbian himself has admitted to altering

tabulating software in Hocking, Lorain, Muskingum, Clark,

Harrison and Guernsey counties. Todd Rapp, President of

Triad, also has confirmed that these sorts of changes are

standard procedure for his company.

First, during an interview, film maker Lynda Byrket asked

Barbian, ``you were just trying to help them so that they

wouldn't have to do a full recount of the county, to try to

avoid that?'' Mr. Barbian answered, ``Right.'' She further

inquired: ``did any of your counties have to do a full

recount?'' Mr. Barbian replied, ``Not that I'm aware of.''

Second, it appears that Mr. Barbian's activities were not

the actions of a rogue computer programmer but the official

policy of Triad. Rapp explained during a Hocking County Board

of Elections meeting:

``The purpose was to train people on how to conduct their

jobs and to help them identify problems when they conducted

the recount. If they could not hand count the ballots

correctly, they would know what they needed to look for in

that hand count.''

Barbian noted that he had ``provided [other counties]

reports so they could review the information on their own.''

As one observer asked, ``Why do you feel it was necessary

to point out to a team counting ballots the number of

overvotes and undervotes when the purpose of the team is to

in fact locate those votes and judge them?''

Barbian's response was, ``. . . it's just human error. The

machine count is right . . . We're trying to give them as

much information to help them out.''

In addition, Douglas W. Jones, a computer election expert

from the University of Iowa, reviewed the Eaton Affidavit and

concluded that it described behavior that was dangerous and

unnecessary:

``I have reviewed the Affidavit of Sherole L. Eaton (``the

Eaton Affidavit''), the Deputy Director of the Hocking County

Board of Election, as well as the letter of Congressman John

Conyers to Kevin Brock, Special Agent in Charge with the FBI

in Cincinnati, Ohio. In light of this information, and given

my expertise and research on voting technology issues and the

integrity of ballot counting systems, it is my professional

opinion that the incident in Hocking County, Ohio, threatens

the overall integrity of the recount of the presidential

election in Ohio, and threatens the ability of the

presidential candidates, their witnesses, and the counter-

plaintiffs in the above-captioned action, to properly

analyze, inspect, and assess the ballots and the related

voting data from the 2004 presidential election in Ohio. It

is my understanding that 41 of Ohio's 88 counties use Triad

voting machines. As a result, the incident in Hocking County

could compromise the statewide recount, and undermine the

public's trust in the credibility and accuracy of the

recount.''

We have received several additional reports of machine

irregularities involving several other counties serviced by

Triad, including a report that Triad was able to alter

election software by remote access:

In Union County, the hard drive on the vote tabulation

machine, a Triad machine, had failed after the election and

had been replaced. The old hard drive was returned to

the Union County Board of Elections in response to a

subpoena.

The Directors of the Board of Elections in both Fulton and

Henry County stated that the Triad company had reprogrammed

the computer by remote dial-up to count only the presidential

votes prior to the start of the recount.

In Monroe County, the 3% hand-count failed to match the

machine count twice. Subsequent runs on that machine did not

match each other nor the hand count. The Monroe County Board

of Elections summoned a repairman from Triad to bring a new

machine and the recount was suspended and reconvened for the

following day. On the following day, a new machine was

present at the Board of Elections office and the old machine

was gone. The Board conducted a test run followed by the 3%

hand-counted ballots. The results matched this time and the

Board conducted the remainder of the recount by machine.

In Harrison County, a representative of the Triad company

reprogrammed and retested the tabulator machine and software

prior to the start of the recount. The Harrison County

tabulating computer is connected to a second computer which

is linked to the Secretary of State's Office in Columbus. The

Triad technician handled all ballots during the machine

recount and performed all tabulation functions. The Harrison

County Board of Elections kept voted ballots and unused

ballots in a room open to direct public access during daytime

hours when the courthouse is open. The Board had placed voted

ballots in unsealed transfer cases stored in an old wooden

cabinet that, at one point, was said to be lockable and,

at another point, was said to be unlockable.

On December 15, 2004, Rep. Conyers forwarded information

concerning the irregularities alleged in the Eaton Affidavit

to the FBI and local prosecutors in Ohio. He has not received

a response to that letter. On December 22, 2004, Rep. Conyers

forwarded a series of questions concerning this course of

events to the President of Triad GSI and to Mr. Barbian.

Counsel for Triad GSI has indicated that a response would be

forthcoming later this week or shortly thereafter.

Analysis

Based on the above, including actual admissions and

statements by Triad employees, it strongly appears that Triad

and its employees engaged in a course of behavior to provide

``cheat sheets'' to those counting the ballots. The cheat

sheets told them how many votes they should find for each

candidate, and how many over and under votes they should

calculate to match the machine count. In that way, they could

avoid doing a full county-wide hand recount mandated by state

law. If true, this would frustrate the entire purpose of the

recount law--to randomly ascertain if the vote counting

apparatus is operating fairly and effectively, and if not to

conduct a full hand recount. By ensuring that election boards

are in a position to conform their test recount results with

the election night results, Triad's actions may well have

prevented scores of counties from conducting a full and fair

recount in compliance with equal protection, due process, and

the first amendment.

In addition, the course of conduct outlined above would

appear to violate numerous provisions of federal and state

law. As noted above, 42 U.S.C. Sec. 1973 provides for

criminal penalties for any person who, in any election for

federal office, ``knowingly and willfully deprives, defrauds,

or attempts to defraud the residents of a State of a fair and

impartially conducted election process, by . . . the

procurement, casting, or tabulation of ballots that are known

by the person to be materially false, fictitious, or

fraudulent under the laws of the State in which the election

is held.'' Section 1974 requires the retention and

preservation of all voting records and papers for a period of

22 months from the date of a federal election and makes it a

felony for any person to ``willfully steal, destroy, conceal,

mutilate, or alter'' any such record.

Ohio law further prohibits election machinery from being

serviced, modified, or altered in any way subsequent to an

election, unless it is so done in the presence of the full

board of elections and other observers. Any handling of

ballots for a subsequent recount must be done in the presence

of the entire Board and any qualified witnesses. This would

seem to operate as a de facto bar against altering voting

machines by remote access. Containers in which ballots are

kept may not be opened before all of the required

participants in are attendance. It is critical to note that

the fact that these ``ballots'' were not papers in a box is

of no consequence in the inquiry as to whether state and

federal laws were violated by Barbian's conduct: Ohio Revised

Code defines a ballot as ``the official election presentation

of offices and candidates . . . and the means by which votes

are recorded.'' Ohio Rev. Code Sec. 3506.01 (B) (West 2004).

Therefore, for purposes of Ohio law, electronic records

stored in the Board's computer are to be considered

``ballots.'' Triad's interference with the computers and

their software would seem to violate these requirements.

Further, any modification of the election machinery may

only be done after full notice to the Secretary of State.

Ohio Code and related regulations require that after the

state certifies a voting system, changes that affect ``(a)

the method of recording voter intent; (b) voter privacy; (c)

retention of the vote; or the (d) communication of voting

records, must be done only after full notice to the Secretary

of State. We are not aware that any such notice was given to

the Secretary.

Finally, Secretary Blackwell's own directive, coupled with

Ohio Revised Code Sec. 3505.32, prohibits any handling of

these ballots without bipartisan witnesses present. That

section of the code provides that during a period of official

canvassing, all interaction with ballots must be ``in the

presence of all of the members of the board and any other

persons who are entitled to witness the official canvass.''

The Ohio Secretary of State issued orders that election

officials are to treat all election materials as if the State

were in a period of canvassing, and that, ``teams of one

Democrat and one Republican must be present with ballots at

all times of processing.''

Triad has sought to respond to these charges by arguing

that Ohio law requires a Board of Elections to prevent the

counting or tabulation of other races during a recount and

limit these activities to those offices or issues for which a

formal recount request has been filed. However, this

requirement does not supercede the above requirements that

election machinery only be serviced or otherwise altered in

the presence of the full elections board and observers. There

are at least two ways this recount process could have been

conducted legally. First, recounters could have been given

the full ballot and been simply instructed not to count

the other races recorded. Second, the service company

employees could have waited to alter the software program

until the official recount began in the presence of the

board and qualifying witnesses. Neither of these scenarios

occurred in the present case.

In addition to these provisions imposing duties on the

Board of Elections, there are numerous criminal penalties

that can be incurred by those who actually tampered with the

machines. These apply to persons who ``tamper or attempt to

tamper with . . . or otherwise change or injure in any manner

any marking device, automatic tabulating equipment or any

appurtenances or accessories thereof;'' ``destroy any

property used in the conduct of elections;'' ``unlawfully

destroy or attempt to destroy the ballots, or permit such

ballots or a ballot box or pollbook used at an election to be

destroyed; or destroy [or] falsify;'' and ``willfully and

with fraudulent intent make any mark or alteration on any

ballot.''

It is noteworthy that the companies implicated in the

misconduct outlined above, Triad and its affiliates, are the

leading suppliers of voting machines involved in the counting

of paper ballots and punch cards in the critical states of

Ohio and Florida. Triad is controlled by the Rapp family, and

its founder Brett A. Rapp has been a consistent contributor

to Republican causes. In addition, a Triad affiliate, Psephos

Corporation, supplied the notorious butterfly ballot used in

Palm Beach County, Florida, in the 2000 presidential

election.

4. Greene County--Long Waits, the Unlocked Lockdown and

Discarded Ballots

We have received information indicating negligence and

potential tampering with Greene County ballots and voting

machines. On December 9, election observers interviewed the

County Director of Elections, Carole Garman, and found

substantial discrepancies in the number of voting machines

per voter in low-income areas as compared to other areas.

Apparently, some consolidated precincts had almost the state

imposed limit of 1,400 registered voters and others had only

a few hundred voters. One of the precincts disproportionately

affected included Central State University and Wilbur Force

University, both historically black universities.

The next day, the observers returned to that office and

requested voter signature books for copying. Ms. Garman

granted such access. After leaving the office for three

hours, the observers returned and had been advised that,

under Ohio law, they were entitled to copies of the precinct

books for a nominal fee, and requested such copies from

Garman. Garman did not concur with that view of Ohio law and

telephoned the office of Secretary Blackwell, eventually

reaching Pat Wolfe, the Election Administrator for the

Secretary of State. Garman then advised the observers that,

per Blackwell, all voter records for the State of Ohio were

``locked down'' and they now were ``not considered public

records.'' Garman subsequently physically removed the books

from one observer's hands'' After attempting to persuade

Garman to reverse this decision to no avail, the observers

departed the office.

The observers returned the following day, a Saturday, at

10:15 am. While a number of cars were parked in the parking

lot and the door to the office was unlocked, and there was no

one in the office. One light was on in the office that had

not been on the previous night after the office was closed.

In the office, unsecured, were the poll books that had been

taken from then observers the day before. There were also

voting booths, ballot boxes apparently containing votes, and

voting equipment, also unsecured. Shortly after the observers

had left the office, a police officer arrived and later

elections officials and members of the media. The officials

were unable to offer any explanation for the unsecure office,

other than negligence, and said they would ask a technician

(from the Triad company) to check out the machines on Monday.

A number of other substantial irregularities in Greene

County have come to our attention that were uncovered after

the office

was discovered to be unsecure. In the short period of time

that observers were given to examine voting records, ballots

were not counted for apparently erroneous reasons. In a

number of cases, Greene County officials rejected ballots

because the secrecy envelope for the ballot appeared to

indicate that the voter had voted in the wrong precinct,

notwithstanding the fact that a notation was made--apparently

by an election worker--indicating the vote should count. The

records appeared to indicate that, in some cases, voters were

sent to the wrong precinct by election workers and, in

others, were given the wrong precinct's envelope for the

ballot because election workers had run out of envelopes for

the correct precinct.

These records also appeared to indicate that some voters

were purged from the voting rolls on the basis that they

failed to vote in the previous election, while other voters

who had not voted in several elections had not been purged.

On October 26, Secretary Blackwell issued a directive and

provided it to Greene County officials regarding the ``pre-

challenging'' process, where a voter's eligibility is

challenged prior to the election, and sent an attached list

of voters who were to be pre-challenged in Greene County, to

the Board of Elections. Notice was sent by the Board to these

voters on the Friday before the election by registered mail,

and was likely not received until Monday, advising such

voters of their right to be present at a Monday hearing,

where the voter's eligibility would be decided.

Other irregularities appear in the official ballot counting

charts prepared by election officials, including a number of

precincts where the number of voters do not match the number

of votes cast despite the fact that the charts indicate that

those numbers ``must match.''

We have also obtained evidence indicating that eligible

voters did not have their ballots counted for invalid

reasons. For example, an overseas military ballot was not

counted because it was a photocopy rather than the original

ballot; an 85 year old voter did not have his absentee vote

counted because it did not have a stub attached; a disabled

voter who indicated she marked her ballot with the assistance

of election workers did not have her absentee vote counted

because no stub was attached; an absentee voter with a

properly postmarked ballot did not have his vote counted

because it was received ``too late,'' but before the initial

certification of results; and provisional ballots that were

not counted because an election official forgot to sign as a

witness when the ballot was cast. Substantial numbers of

provisional ballots appear to have been rejected because

voters were purged in the last two years.

Analysis

Numerous Ohio laws appear to have been broken in Greene

County. First it is a misdemeanor to deny the public access

to election records. Ohio law clearly states that ``No

director of elections, deputy director of elections, or

employee of the board of elections designated by the director

or deputy direct shall knowingly prevent or prohibit any

person from inspecting, under reasonable regulations

established and posted by the board of elections, the public

records filed in the office of the board of elections.'' Not

only is this a crime, but grounds for dismissal from election

duties--required whether the offender is an official or an

employee. It does not appear that anyone has been prosecuted,

and no one has been dismissed as required by statute.

Second, the complete lack of security on Friday night

violates any number of Ohio laws requiring that ballots and

machinery be kept absolutely secure. Section 3505.31 requires

that ballots, pollbooks, poll lists, tally sheets and voting

machines be kept tamper-proof and under seal. Ballots are to

be held secure until a recount is properly conducted in front

of witnesses, and ballots may not be handled by anyone except

the board and its employees. Failure of these duties by board

members and their employees, is a felony, as ``No member,

director or employee of a board of elections shall willfully

or negligently violate or neglect to perform any duty imposed

upon him by law, or willfully perform or neglect to perform

it in such a way as to hinder the objects of the law.''

Again, it requires that the offender be dismissed, and again,

it appears that those actions have not been taken in Greene

County. It is important to note that this statute does not

require any intent of wrongdoing--simple negligence is enough

to invoke the statute and there is no explanation as to why

it has not been enforced.

Third, Greene County's operation seems to have several

Constitutional problems, both federally and at the state

level. The selective use of challenges and purges invokes the

Equal Protection clause. We were unable to confirm any

legitimate reason why some voters were challenged and then

purged, and others were not. There are also Due Process

concerns as those to be purged were not given sufficient

notice to meaningfully participate in their scheduled

hearings. And finally, these actions violate Ohio's own

constitution that guarantees the right to vote.

5. Other Recount Irregularities

We learned of numerous additional troubling recount

irregularities in the course of our investigation. The

groundwork for these problems was laid when the Secretary of

State failed to issue specific standards for the recount. In

essence, Mr. Blackwell's directive on recount procedures

permitted each county board of election to determine its own

recount rules. Mr. Blackwell failed to issue such standards,

notwithstanding the fact that election officials themselves

had offered contrasting election recount procedures,

including some counties who sought to unilaterally oppose

doing any recount whatsoever.

Some of the serious recount irregularities that we learned

of in connection with our investigation include the

following:

a. Irregularities in Selecting the Initial 3% Hand Count--Many County

Boards of Elections Did Not Randomly Select the Precinct Samples

In the course of our investigation we learned:

Mr. Keith Cunningham, Director of the Allen County Board of

Elections, explained that it would take considerably longer

to carry out the recount if there were a random selection

process employed. Instead, the Board pre-selected four

precincts, totaling slightly more than the required three

percent, for the recount. Democratic and Green Party

witnesses raised objections but to no avail.

The Clermont County Board of Elections selected the 3%

precinct samples by choosing the thirteen precincts with

lowest number of voters plus the next number of precincts

that reached the total of 3% of the total votes cast in that

county. This selection process eliminated larger and more

diversified precincts. The staff of the Board admitted that

small precincts were chosen because fewer problems would be

encountered in smaller precincts. A witness objected to

this selection process, but to no avail.

The Cuyahoga County Board of Elections decided to choose

only precincts with 550 votes or more and from a cross-

section of areas--one East side, one West side, one affluent,

one non-affluent. This criterion left only eight percent of

precincts available to be selected. In addition, witnesses

observed that the ballots were not in a random order, and

that they had been previously sorted. As the ballots were fed

into the counting machines, there were long runs of votes for

only one candidate and then long runs for another, which

seemed statistically improbable.

The total number of votes cast in Morrow County was 16,694.

Three percent of this would be 501. The Morrow County Board

of Elections selected the Harmony Township precinct for the

initial hand count because it had 517 ballots cast. When

observers complained this was not random, the Board responded

that it had the right to select the precinct. During this

discussion, an election official with the Board called the

Secretary of State's office and reported that the Secretary

of State's office stated that the Board was correct.

The Hocking County Board of Elections met and Rod Hedges, a

Republican Board member, stated that he believed the Board

should select a precinct that was not heavily in favor of

George W. Bush or John F. Kerry. The Board decided to

consider only the precincts where the vote totals for Bush

and Kerry were similar. An observer objected that this was

not a random selection, but to no avail.

Election officials in Medina County were aware of several

``problem'' districts, but instead chose to perform the

manual 3% test recount on two precincts that had been part of

a school levy recount the previous Monday. That meant that

those ballots had been taken out of the standard ``double

lock'' situation and had been handled several times since

that Monday.

The Board of Elections in Vinton County selected a precinct

3% manual recount test simply because its vote total was

closest to 3% of the total votes cast in the county.

The Summit County Board of Elections selected precincts

randomly with the Director and Deputy Director of the Board

of Elections and two other Board employees present, both of

whom were IT specialists for the Board so that they could

compute the three percent. The Board shuffled 475 precinct

cards and then chose randomly from the pile. The Summit

County Board of Elections conducted this selection without

any recount witnesses present.

b. Irregularities in Applying the Full Hand-Count Requirement--Counties Not Conducting Full Hand Count After 3% Hand and Machine Counts Did Not

Match

In the course of our investigation we learned:

In Monroe County, the 3% hand-count failed to match the

machine count twice. Subsequent runs on that machine matched

neither each other nor the hand count. The Monroe County

Board of Elections summoned a repairman from Triad to bring a

new machine and the recount was suspended and reconvened for

the following day. On the following day, a new machine was

present at the Board of Elections office and the old machine

was gone. The Board conducted a test deck run followed by the

3% hand-counted ballots. The results matched this time and

the Board conducted the remainder of the recount by machine.

In Fairfield County, the hand recount of the 3% test sample

did not match the machine count, even after two attempts. The

Board suspended the recount and stated that Secretary

Blackwell recommended that the recount should begin again

``from scratch.'' The Green recount observers were then told

that it was 4:00 PM, the building was closed, and all had to

leave. The Republican recount observers, however, were

allowed to stay in a

conference room for an additional ten minutes or so for a

private discussion. When the Board reconvened a few days

later, it announced that it would be conducting a machine

count of the county's votes. When a Green Party observer

objected, she was told by the Board that she was not allowed

to speak.

c. Irregularities in the Treatment of Ballots--Some Counties Marking

Ballots and Some Counties Not Securely Storing Ballots

In the course of our investigation we learned:

In Washington County, the Board of Elections had, in the

first count, excluded ballots which included no votes and

overvotes. During the recount, the Board altered many such

ballots to make them work. An observer protested this

practice. An election official pulled a black marker from his

right pocket near the beginning of the recount and stated

that he was the mark-up man. He proceeded to do all of the

marking of the ballots. Another election official assisted

with the ``band-aids''. The observer noted that all the re-

marking and band-aiding of ballots did reflect the will of

the voter, with one exception. In the precinct Belpre 4A, a

voter had both marked the oval and put an X through it for

presidential candidate Michael Peroutka and had marked the

oval for Bush. The election official put a band-aid over the

Peroutka vote and put his own X on the Bush vote. The

observer objected that it should be counted as an overvote.

The Board ruled that the vote should count for Bush.

In Lucas County, an observer witnessed the physical

alteration of three ballots for the apparent reason of

ensuring that the vote count produced by the optical scan

machine would match the 3% hand count. At least one of the

election officials stated that she did not want the hand

count and machine count to be different because they did not

want to do a complete hand count. The Board made the

alterations to the ballot after determining the intent of the

voters. Following a lunch break during the recount, the Board

kept recount observers waiting while a technician from the

Diebold company reprogrammed the machine.

In Ashland County, ballots cast in the presidential

election were stored by precinct in open cubicles along one

wall in the employee lunchroom/meeting room, completely open

and visible to anyone who enters the room. Piled on top of

the cubicles were bags of Doritos, mugs, cleaning products,

Glad Wrap and other miscellaneous items. Board of Election

officials said the room was kept locked, except when used.

In Coshocton County, the Board stored voted ballots mixed

with blank, unused ballots in partially-opened boxes,

unsealed at the time of observation and apparently never

sealed after the election. While ballots were stored in a

locked room, all Board employees had keys to the room.

In Belmont County, the Deputy Director of Elections stated

that her county had hired an independent programmer (``at

great expense'') to reprogram the counting machines so that

they would only count votes for President during the recount.

In Portage County, all ballot boxes were locked and

reopened, locked and re-opened again--always in plain sight--

and transported methodically from the visual inspection area

to the tabulator room.

d. Irregularities in the Treatment of Witnesses at the Recount and

their Access to Ballots

In the course of our investigation we learned:

In Summit County, recount witnesses were threatened with

expulsion if they spoke to counting teams. In some instances,

they were expected to ``observe'' from up to 20 feet away,

which prevented them from being able to actually observe

recount.

In Huron County, the punchcard tabulator test was observed

only by Republican witnesses. This test was conducted the day

before the Green Party witness was invited to observe the

recount.

In Putnam County, Board of Elections officials told

observers that their Board would meet on December 15th to

decide the start date. When the observer called back on the

15th, she was told the recount had already taken place.

In Allen County, observers were not allowed to examine

provisional ballots and absentee ballots during the recount.

The Board told them that they must make an appointment at a

later time working around the Board's schedule. The Board

further stated that only the specific person who cast such a

ballot is allowed to inquire whether his or her vote was

counted.

In Holmes County, observers asked to see the spoiled ballot

pile, comprised of five ballots, but the Board denied access,

stating that they were in a sealed envelope that could not be

opened.

In Licking County, the Board denied observers access to

view provisional and absentee ballots.

In Mahoning County, the Board denied observers access to

view rejected absentee ballots.

In Medina County, the Board denied observers access to view

provisional ballot tallies, provisional ballots, and the

actual machines and ballot booklets used.

In Morgan County, 30 of 160 provisional and absentee

ballots were not counted, and the Board denied observers

access to view these ballots. The Board stated that these

ballots were locked away and would be destroyed 60 days after

the election.

In Stark County, the Board denied an observer request to

view the provisional ballots.

In Warren County, the Board denied an observer request to

view provisional and absentee ballots. The observer has

requested that the Board have this decision reviewed by the

county prosecutor and the Board is now awaiting the county

prosecutor's decision.

Analysis

The Secretary of State's failure to issue specific

standards for the recount was a major problem. It appears to

have contributed to a lack of uniformity that may very well

violate both the Due Process Clause and the Equal Protection

Clause of the Constitution. As the U.S. Supreme Court held in

2000, ``Having once granted the right to vote on equal terms,

the State may not, by later arbitrary and disparate

treatment, value one person's vote over that of another.''

As the Court articulated in that case, ``It is obvious

that the recount cannot be conducted in compliance with

the requirements of equal protection and due process

without substantial additional work. It would require not

only the adoption (after opportunity for argument) of

adequate statewide standards for determining what is a

legal vote, and practicable procedures to implement them,

but also orderly judicial review of any disputed matters

that might arise.'' It may also have violated Ohio state

law which charges the secretary of state with ``[issuing]

instructions by directives and advisories to members of

the boards [of elections] as to the proper methods of

conducting elections'' and ``[preparing] rules and

instructions for the conduct of elections.''

In terms of the specific irregularities, they would seem to

be inconsistent if not in outright violation of several

aspects of Ohio's recount law. Those counties which did not

randomly select the precinct samples appears to violate the

Secretary of State's directive on this point. Those counties

which did not conduct a full hand count after the 3% hand and

machine counts did not match is inconsistent with Ohio's

statutory right to have inconsistent results rechecked. Those

counties that allowed for irregular marking of ballots and

which failed to secure and store ballots and machinery appear

to have violated provisions of Ohio law mandating that

candidates have the right to ensure that ballots are secure

between the election and the official recount, that ballots

may not be handled by anyone besides Board members and their

staff, and may not be handled outside of the presence of the

Board and qualifying witnesses. Finally, those counties which

prevented witnesses for candidates from observing the various

aspects of the recount appear to have violated provisions of

Ohio law providing that candidates have the right to observe

all ballots.

Recommendations

A. Electoral College Challenge

We believe there are ample grounds for challenging the

electors from Ohio as being unlawfully appointed.

We say this for several reasons. First, there is

considerable doubt that all controversies regarding the

appointment of the electors were lawfully resolved six days

prior to the meeting of the electors (on December 7) in order

for the state's electors to be binding on Congress as

required by 3 U.S.C. Sec. 5. This is because, among other

things, the Secretary of State appears to have intentionally

delayed the initial certification of the electors until

December 6, making it impossible for the recount (of which he

was fully aware) to be completed by December 7, let alone the

December 13 meeting of the electors.

Second, there are numerous irrefutable instances where Ohio

election law has been violated by the Secretary of State and

others such that the election cannot be said to comply with

Ohio law, and the electors cannot be considered lawfully

certified under state law within the meaning of 3 U.S.C. Sec.

15. These violations of law are highlighted throughout this

Report.

The failure to provide adequate voting machinery would

appear to violate both Ohio's Constitution, that provides all

eligible adults the right to vote, and the Ohio Revised Code

which requires the Boards of Elections to provide ``for each

precinct a polling place and provide adequate facilities at

each polling place for conducting the election.'' Secretary

of State Blackwell's failure to initiate any investigation

into this pivotal irregularity notwithstanding his statutory

duty to do so under Ohio Revised Code Sec. 3501.05,

represents another likely violation of Ohio law.

The ``caging'' tactics targeting 35,000 new voters by the

Ohio Republican Party for preelection legal challenge were

found by three federal courts to be illegal as being

politically and racially charged, and burdening the

fundamental right to vote. The tactic would also appear to

violate Ohioans' right to vote under the Ohio Constitution.

Mr. Blackwell's decision to prevent news media and exit

polls from interviewing Ohio citizens after they voted was

found by a federal court of appeals to have violated the

First Amendment's guarantee that state conduct shall not

abridge ``freedom . . . of the press''. His decision also

likely violated Ohio's Constitution that provides: ``Every

citizen may freely speak, write, and publish his

sentiments on all subjects, being responsible for the

abuse of the right; and no law shall be passed to restrain

or abridge the liberty of speech, or of the press.''

Mr. Blackwell's decision to prevent those voters who

requested absentee ballots, but did not receive them on a

timely basis from being able to vote, was found by a federal

court to violate HAVA. This restrictive directive also likely

violated Article 5, Section 1 of the Ohio Constitution,

granting every Ohio citizen the right to vote if he or she is

otherwise qualified.

Numerous incidents of voter intimidation and misinformation

engaged in Ohio on election day likely violate the Voting

Rights Act, the Civil Rights Act of 1968, and the Ohio right

to vote. Mr. Blackwell's apparent failure to institute a

single investigation into these acts likely represents a

violation of his statutory duty to investigate election

misconduct.

The voting computer company Triad has essentially admitted

that it engaged in a course of behavior during the recount in

numerous counties to provide ``cheat sheets'' to those

counting the ballots. By insuring that election boards were

in a position to conform their test recount results with the

election night results, Triad's actions may well have

prevented scores of counties from conducting a full and fair

recount. Triad's action appears to violate Ohio law

prohibiting election machinery from being serviced, modified,

or altered in any way subsequent to an election, unless it is

done so in the presence of the full board of elections and

other observers.

Numerous Ohio laws appear to have been broken in Greene

County, where after initially being granted access to poll

books to conduct an audit, election observers had this access

abruptly revoked under the orders of Secretary Blackwell, and

arbitrary and capricious practices and counting procedures

that disenfranchised hundreds of voters were identified.

These practices violate Ohio law requirements preventing the

denial of public access to election records; requiring that

ballots and machinery be kept absolutely secure; and

protecting the right to vote.

The Secretary of State's failure to issue specific

standards appears inconsistent with Ohio state law which

charges the secretary of state with ``[issuing] instructions

by directives and advisories to members of the boards [of

elections] as to the proper methods of conducting elections''

and ``[preparing] rules and instructions for the conduct of

elections.''

There were numerous specific irregularities in the recount

that are inconsistent with several aspects of Ohio's recount

law. Those counties which did not randomly select the

precinct samples violated the Secretary of State's directive

on this point. Those counties which did not conduct a full

hand court after the 3% hand and machine counts violated

Ohio's statutory right to have inconsistent results

rechecked. Those counties which allowed for irregular marking

of ballots and which failed to secure and store ballots

and machinery appear to have violated provisions of Ohio

law mandating that candidates have the right to ensure

that ballots are secure between the election and the

official recount, that ballots may not be handled by

anyone besides Board members and their staff, and may not

be handled outside of the presence of the Board and

qualifying witnesses. Finally, those counties which

prevented witnesses for candidates from observing the

various aspects of the recount violated provisions of Ohio

law providing that candidates have the right to observe

all ballots.

Whether the cumulative effect of these legal violations

would have altered the actual outcome is not known at this

time. However, we do know that there are many serious and

intentional violations which violate Ohio's own law, that the

Secretary of State has done everything in his power to avoid

accounting for such violations, and it is incumbent on

Congress to protect the integrity of its own laws by

recognizing the seriousness of these legal violations.

B. Need for Further Congressional Hearings

It is also clear the U.S. Congress needs to conduct

additional and more vigorous hearings into the irregularities

in the Ohio presidential election and around the country.

While we have conducted our own Democratic hearings and

investigation, we have been handicapped by the fact that key

participants in the election, such as Secretary of State

Blackwell, have refused to cooperate in our hearings or

respond to Mr. Conyers questions. While GAO officials are

prepared to move forward with a wide ranging analysis of

systemic problems in the 2004 elections, they are not

planning to conduct the kind of specific investigation needed

to get to the bottom of the range of problems evident in

Ohio. As a result, it appears that the only means of

obtaining his cooperation in any congressional investigation

is under the threat of subpoena, which only the Majority may

require.

Given the seriousness of the irregularities we have

uncovered, and the importance of the federal elections, we

recommend that the House and Senate form a joint, select

committee to investigate the full gamut of irregularities

across the board.

Among the issues which require further attention at

Congressional hearings are the following:

The misallocation of voting machines. Congress should

examine the extent to which the lack of machines in certain

areas led to unprecedented long lines that disenfranchised

predominantly minority and Democratic voters.

The decisions to restrict provisional ballots to actual

precincts and to deny them to voters who did not receive

absentee ballots. Congress should examine the extent to which

the decisions departed from past Ohio law on provisional

ballots, how many voters were impacted, and whether a broader

construction would have led to any significant disruption at

polling places.

The use of partisan, pre-election ``caging'' tactics.

Congress should examine to what extent caging is used and to

what degree minority voters were targeted for intimidation

and suppression.

The use of voter suppression and intimidation tactics.

Congress should investigate reports of intimidation and

misinformation in violation of the Voting Rights Act, the

Civil Rights Act of 1968, Equal Protection, Due Process and

the Ohio right to vote.

The use of partisan challengers. Congress should examine

whether the use of such challengers is disruptive and

intimidating to voters. Further, Congress should investigate

whether the precinct judges, which are required by law, are

sufficient to regulate voting practices.

Voter purging and other registration errors. Congress

should look at what methods of voter purging are used and

whether they target minority groups.

The prevalence of undervotes, in which ballots are cast but

lack votes for president. Congress should further investigate

whether undervotes are principally caused by punchcards and

what reforms can be made to prevent them.

The need for greater accountability in ballot counting.

Congress should examine whether an audit capability for

voting machines would enhance the ability to verify voter

choices.

The lack of national standards for issuing provisional

ballots and conducting recounts. Congress should examine

areas in which national standards would promote the

guaranteed right to vote and would ensure that every vote

counts.

Restrictions on the use of government-granted power for

political or personal gain. Congress should investigate the

need for restricting the ability of state contractors and

public officials involved in the administration of elections

to participate in campaign activities.

C. Legislation

Our investigation has made it abundantly clear that

Congress and the States must reform the election laws to

address the many inequities that have come to light. At the

very least, we must--

Develop a fair and uniform system of processing provisional

ballots, including training of poll workers and counting

votes.

Ensure that every voting machine has a verifiable audit

trail, guidelines for which could be established by the

Election Assistance Commission.

Consider an Amendment to the Constitution of the United

States to reaffirm the right to vote.

Facilitate voter turnout through the establishment of a

national election day holiday, the expansion of early voting,

and the re-enfranchisement of former felons.

Ensure full enforcement by the Justice Department of anti-

voter intimidation laws, including prohibitions on voter

suppression and caging.

Establish national standards for voter registration,

polling place opening hours, and ballot recounts.

Establish an explicit private right of action for voter

rights in the Help America Vote Act.

Ensure that state and local election officials involved in

the administration of elections do not use their offices for

political gain.

Ensure enough accessible voting machines and poll workers

are available at all precincts such that waiting times are

reasonable, including in lower-income and minority

communities.

Consistent with the First Amendment, restrict state

contractors from participating in campaign activities.

Develop and fund public campaigns to educate voters on

voting rights, anti-voter intimidation laws, etc.

Fully fund the Help America Vote Act.

Clarify that provisional ballots are available to all

citizens who request them, as long as they are in the

appropriate County.

We recommend that House and Senate Members join together in

reforming these laws and preserving our democracy.

Mr. Speaker, I yield to the gentleman from Missouri (Mr. Clay) for the purpose of making a unanimous consent request.

(Mr. CLAY asked and was given permission to revise and extend his remarks.)

Members of the House, we are here today not as partisans for one Presidential candidate or another, but because we want to do our duty under the Constitution to protect our democracy. We are here because of the inner-city voter in Franklin County who waited 10 hours in the pouring rain while suburban voters in the same county had no wait because election officials decided to reallocate voting machines from Columbus to the suburbs. We are here because of the Hispanic voter in Hamilton County who also stood in line for hours, but was directed to the wrong voting table and had his ballot thrown out because of a decision by the Secretary of State of Ohio to throw out ballots cast at the right polling place but the wrong precinct.

We are here because of the elderly voter in Lucas County who requested an absentee ballot that never showed up and was refused a provisional ballot because of another partisan decision by the Secretary of State of Ohio. We are here because of the new voter in Delaware County whose registration form was thrown out because it did not meet the paper weight requirements set forth by the Secretary of State. We are here because of the African American voter in Summit County who was targeted with an unlawful voter challenge because of her race and because she refused to answer a certified letter from the chairman of the Republican Party.

Most of all we are here because not a single election official in Ohio has given us any explanation for the massive and widespread irregularity in the State. No explanation for the machines in Mahoning County that recorded Kerry votes for Bush. No explanation of improper purging in Cuyahoga County. No explanation for the lockdown in Warren County. No explanation for the 99 percent turnout in Miami County. No explanation for machine tampering in Hocking County.

Read on our Web page 101 pages of great staff work that takes this out of semantics, of partisanship; and I appeal to every Member of this body to sustain this objection.

We are here today, not as partisans for one Presidential candidate or another, but because we want to do our duty under the Constitution to protect our democracy.

We are here because of the inner city voter in Franklin County, who waited 10 hours in the pouring rain, while suburban voters in the same county had no wait because election officials decided to reallocate voting machines from Columbus to the suburbs.

We are here because of the Hispanic voter in Hamilton County who was directed to the wrong voting table, and had their ballot thrown out because of a decision by the Secretary of State to throw out ballots cast at the right polling place but the wrong precinct.

We are here because of the elderly voter in Lucas County who requested an absentee ballot that never showed up and was refused a provisional ballot because of another partisan decision by the Secretary of State.

We are here because of the new voter in Delaware County, whose registration form was thrown out because it did not meet the paper weight requirements of the same Secretary of State.

We are here because of the African American voter in Summit County, who was targeted with an unlawful voting challenge because of her race and because she refused to answer a certified letter from the chairman of the Republican Party.

Most of all we are here because not a single election official in Ohio has given us any explanation for the massive and widespread irregularities in that State: No explanation for the machines in Mahoning County that recorded Kerry votes for Bush--No explanation for the improper purging in Cuyahoga County--No explanation for the lock down in Warren County--No explanation for the 99 percent voter turnout in Miami County--No explanation for the machine tampering in Hocking County.

The debate we have today will not change the outcome of November's election. We know that. But out of today's debate, I hope this Congress will respond to our challenge:

A challenge to hold true bipartisan hearings to get to the bottom of what went wrong in Ohio and around the Nation on election day.

A challenge to show the same concern about voter disenfranchisement in this country that we show in Afghanistan, and the Ukraine, and Iraq.

A challenge to enact real election reform; that gives all citizens the right to a provisional ballot; that gives all voters a verifiable paper trail; and that bans election officials from serving as campaign chairs.

The thing we should never fear in Congress is a debate, and the thing we should never fear in a democracy is the voters. I hope that today we have a fair debate and 4 years from now, we have an election all our citizens can be proud of.

Mr. Speaker, I am proud to yield the balance of my time to the distinguished gentleman from Vermont (Mr. Sanders).

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I want to thank all the Members of the House who have stayed here with us, who have participated in the debate, who have shared their views, as different as many of them are, because this is the way we work.

This debate, I think we all know, will not change the outcome of the November election. But we do know that out of today's debate, the Congress will respond to the challenge that has been raised here in connection with a better system of voting, not just for Ohio but for everywhere. A challenge has been raised here this afternoon to hold true bipartisan hearings to get to the bottom of not just what went wrong in Ohio but around the Nation on Election Day. This day, the first time in our history, that since 1877 this law has been used in which the Senate and the House have come together to say that an objection has enough merit to keep us here in this discussion.

Join us. Enact real election reform and give the citizens the right to an operative provisional ballot and give all voters a verifiable paper trail. We should never fear this debate in the Congress, and I hope that today we have a fair debate and that 4 years from now, Mr. Speaker, we have an election that all our citizens can be proud of.

Mr. President, I thank the Chair and I thank my colleague, the chairman of the Senate Budget Committee, for the many courtesies he extended to me and to my staff during consideration of the budget in the Budget Committee. He described it accurately and well, that it was a very professional process and we had a good

debate on a whole series of issues. Many of those debates will now be out on the Senate floor.

I do not think it will surprise people that my take on this budget is somewhat different than the distinguished chairman's take on it. That is what debate is all about. That is what democracy is all about, the chance to have differences and to debate them and to vote on them. That is the genius of our system. The way we arrive at truth, to the extent we do in this system, is we have a debate and a discussion, and we have a contest over ideas. That is a healthy thing. It is a good thing. That is what we are about to go through.

As I look at this budget, I see something quite different than the chairman sees. I see a failure to face up to the major challenges confronting the country. I agree with him in terms of his diagnosis of where this is headed with respect to deficits, debt, and the explosion of the costs of the entitlement programs. I agree with that diagnosis. Where I disagree is that this budget does anything in any significant way to confront those challenges.

In fact, this budget makes it all worse. That is the fundamental reality. This budget digs a hole deeper. This budget produces more deficits than if we did not have a budget resolution at all. If we put it on autopilot, we would be better off than what this budget does.

Each and every year of this budget, the deficit is increased over the so-called baseline budget. That is the reality. Perhaps to understand how we got to this circumstance, we have to look back before we can look forward. We have to look back first to 2001, when the President told us:

[W]e can proceed with tax relief without fear of budget

deficits, even if the economy softens.

That is what the President told us in 2001. But look what happened. The President was wrong. We went from a surplus in 2000, the year before President Bush came into office, and the deficit situation has declined each and every year to now record levels of deficit, the biggest deficit in dollar terms we have ever had.

So when the President assured us we could have massive tax cuts and we would not have deficits, he was simply wrong. But he was not just wrong on that issue, because the next year he told us:

. . . [O]ur budget will run a deficit that will be small and

short term . . .

He said this in his State of the Union Address on January 29, 2002. Unfortunately, that was wrong, too, because these deficits are not small and they are certainly not short term. In fact, what we see going forward to 2015 is an ocean of red ink, the biggest deficits we have ever had in dollar terms.

So when the President said they would be small, he was wrong. They are very large deficits. When he said they would be short term, he was wrong again. These are long-term deficits and deficits that are as far as the eye can see. That is not just my conclusion, that is the conclusion of the Congressional Budget Office as well.

If we put back the things the President has left out, the ongoing war costs, the need for alternative minimum tax reform, and the money he is taking from Social Security--it is an interesting thing because at the same time the President says there is a shortfall in Social Security, under his budget each and every year he takes every dime of Social Security money that is available to take and uses it to pay for other things. Again, the President was wrong when he told us these deficits were going to be small and short term.

The next year the President told us in his budget submission:

[O]ur budget gap is small by historical standards.

Again, the President has simply proved to be wrong. Let us put up that next slide that shows a historical comparison of the deficits under President Bush compared to the three previous administrations. The President says the deficits he is writing are small by historical standards. One can look at the last three administrations and see that his deficits are by far the largest.

Let us go to the next slide. The President now says to us, well, we have deficits, so forget about that assertion that there are not going to be any. They are clearly not small and short term. They are clearly not small by historical standards. So now he assures us he is going to cut the deficits in half over the next 5 years. Well, let us look at the reality with respect to that assertion, because what we find is something quite different.

This is the President's claim. He says the deficit is going to be cut in half over the next 5 years, but he gets that result simply by leaving out things. He leaves out war costs past September 30 of this year. He leaves out the need to reform the alternative minimum tax, which is the old millionaire's tax which is rapidly becoming a middle- class tax trap. It costs over $700 billion to fix. There is not a dime in this budget to do it. Surprisingly, he leaves out the cost of his major proposal, which is to change Social Security, and the cost of his proposed change is in the trillions of dollars, over $700 billion the first 10 years but over 20 years over $4 trillion of costs. He does not have any of it in his budget.

The President also told us back in 2001:

. . . (M)y budget pays down a record amount of national debt.

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

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

Future generations shouldn't be forced to pay back money that

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

children and grandchildren.

We can now look back and check the record and see if the President's assertions were correct or incorrect. Again, he was wrong with virtually every major claim he made on the deficit. Unfortunately, the same is true with respect to the debt. The President said he was going to pay down $2 trillion of debt. Unfortunately, we do not see any paydown in debt. The debt is exploding.

The assertion by the President that he was going to pay down the maximum amount of debt available to pay down evaporated, like his claims on the deficit. Instead, the debt is skyrocketing, and under the budget the President has sent to us, we see nothing but continued growth of the debt.

When the President came into office, the publicly held debt was $3.3 trillion. We now forecast by 2015 it will be $9.4 trillion, almost a tripling of the debt at a time the President said he was going to have maximum paydown of the debt.

One of the most interesting claims I get from colleagues on the other side of the aisle is that these massive tax cuts have nothing to do with the deficits and nothing to do with the growth of the debt. Well, how is that? How can that possibly be true?

I remember very well this chart that the Congressional Budget Office showed us back in January of 2001. This chart shows the range of possible outcomes for the deficit, and the administration chose the midpoint of this range in telling us in 2001 we could expect $6 trillion of surpluses over the next decade. But now we are able to go back and see what actually happened.

I remember so well, my colleagues on the other side told me, when I warned them against taking this 10-year forecast in the Budget Committee to the bank--I repeatedly warned it was very risky to count on a 10-year forecast--many of my friends on the other side said: Kent, you are being much too conservative. Don't you understand the tax cut will generate even more revenue? Don't you understand, when we put in place these tax cuts, we are going to get a tremendous revenue impact, more revenue than is forecast? They told me we are going to be in the top end of this range.

Let's look at what actually happened. We can now see the record. The record is the red line. This is what happened to the deficits. We didn't get more money, we got less money, and the result is, combined with more spending on defense and homeland security and rebuilding New York, that the deficits are far worse than even the low end of the range projected back in 2001.

Let's check reality. When our friends say if you cut taxes you get more money, that has not been the experience. The experience has been very clearly when you cut taxes, you get less money. In fact, we got a lot less money, 3 years in a row with less money than the year before. That is unprecedented since World War II.

It is not just tax cuts. Tax cuts are about half the reason. The other half is economic downturn and forecasts that were overly optimistic.

Nonetheless, I want to go back to the point. I don't want anybody to miss

this point. Here is what is forecast, this possible range of outcomes. They chose the midrange on which to base their spending and taxing policies. Many said, with the massive tax cuts you will get more money. But here is the reality. Here is what happened in the real world: A lot less money, much bigger deficits, and an exploding debt.

If we look at the budget turnaround since 2000, that is the difference between what was projected and what actually occurred. What we see is that the revenue loss accounts for the bulk of the budget turn around. In fact, reduction in revenue is three-quarters of the reason for the move from dramatic surpluses to dramatic and growing deficits. I think it is very important for us to be dealing in facts here, not rhetoric, not hope, not ideological belief, but facts. The facts are that the revenue side of the equation collapsed.

Do you remember, back in 2000, revenue was running at almost 21 percent of GDP? The President said: That is very high by historical standards. And he was right. He said: As a result we need to cut taxes. I must say I also supported cutting taxes. I didn't support the particular plan that he advocated, but I believed we needed to cut taxes to give lift to the economy at the time. But I also believed we needed to reduce the amount of the tax cut over an extended period so that we would avoid going back into deficit and debt. That is where the President and I parted ways. I believed we needed to have tax cuts. In fact, I supported greater tax cuts than the President proposed, to give lift to the economy at a time of economic weakness. But the President wanted to go much further, and here is what happened.

We had 21 percent of GDP in 2000 coming in, in revenue. Last year we were down to 16.3 percent of GDP. That is the lowest it has been since 1959. The revenue side of the equation collapsed. Again, about half of that is due to tax cuts.

I listened very carefully to my colleague. He talked about the reason the revenue had gone down. He never mentioned the single biggest reason. He never mentioned the tax cuts. But the tax cuts are the biggest single reason for the revenue collapse. Again, I, too, supported tax reductions at a time of economic weakness to give lift to the economy. I didn't think the particular mix of tax cuts was the most effective because, unfortunately, the tax cuts that were put in place were largely weighted to the wealthiest among us. I think we would have been much better targeting the middle class and lower middle class because those are the ones most likely to spend those tax cuts. But beyond that, the question is, going forward, How much can we afford? What is the relationship between spending and revenue? That is what is critical. That is what creates deficits.

Our friends on the other side only want to talk about spending. Spending is one-half of the equation, revenue is the other half of the equation. It is the difference between how much you are raising and how much you are spending that leads to deficits. This chart goes back to 1980: The red line is the spending line, the green line is the revenue line. You can see very clearly back in the 1980s we had a big gap between spending and revenue. We were spending much more than we were taking in. As a result, we had record deficits at the time.

Then we got spending under control. In fact, interestingly enough, during a Democratic administration spending as a share of our national income went down every year. Spending went down in a Democratic administration and revenue went up. It was that combination of reducing spending and raising revenue that brought us back to balance. In fact, for 3 years we were running surpluses. We even ran surpluses sufficiently strong to stop taking Social Security money and using it to pay for other things. We stopped the raid on Social Security.

Then President Bush came into office. We had the tax cuts, we had an economic slowdown, and the revenue side of the equation plunged. We didn't get more revenue from tax cuts, we got less revenue. Is anybody listening? We didn't get more money with tax cuts, we got less money. And spending went up--though still far below where it was in the 1980s and 1990s, but spending went up. I am not faulting the President. We all agree spending had to go up on defense, on homeland security, on aid for New York, on the bailout of the airlines, and 91 percent of this increase in spending was in just those areas: Defense, homeland security, aid for New York, and bailing out the airlines. That is where the increase in spending occurred. Still, the spending is substantially below where it was in the 1980s and 1990s.

The biggest culprit in the explosion of deficits was on the revenue side of the ledger. These are facts. This is not an ideological argument. It is just facts. I think that is what we have to concentrate on if we are going to get out of this mess. It is going to take spending discipline without question. We have to deal on this side of the ledger. But we are also going to have to deal on the revenue side of the ledger, and our friends on the other side of the aisle never want to talk about it.

This year, the President has said:

We've got to do something about the deficit. . . . it's

important.

He is right. We have to do something about the deficit because these deficits are much too high, and as far as the eye can see there is no reduction anywhere in sight. If we look at the President's budget, what we find in terms of doing something about the deficit is largely rhetorical. What the President's idea is of doing something about the deficit is just leave out things. Leave things out of the budget and that makes the numbers look better. It doesn't really change things though. This is the way you fool yourself, and this is the way others might get fooled. This is how institutions, companies, and individuals get into trouble. They start not quite telling the whole story. Maybe they don't even quite tell the whole story to themselves.

When I look at the President's budget, that is what he and his people are doing. They are not really including everything. They are leaving things out to make the numbers look better.

What have they left out? First of all, they switched from 10-year budgeting to 5-year budgeting because they know right beyond the 5-year budget window things look much worse.

They have left out funding for ongoing war costs beyond September 30 of this year. Just don't include it. They say to me: It is hard to predict what the war costs might be. That is true, it is hard to predict. That is what a budget is all about. Can you imagine a family leaving out their utility bills because they are hard to predict month to month? Can you imagine a family leaving out the food bill because it is hard to predict? But that is what the President has done. He has left out the war costs past September 30 of this year because it is hard to predict.

He has left out the cost of alternative minimum tax reform. Alternative minimum tax, that is the old millionaire's tax. It affects 3 million people now, and 10 years from now it is going to affect 40 million. It costs over $700 billion to fix. The President doesn't have one dime in his budget to address this problem. Last year, interestingly enough he had 1 year of fix in his budget. This year he doesn't even do that. I can make a budget look pretty good if I leave things out, and that is what the President is doing.

Most remarkably, he has left out completely the cost of his Social Security privatization plan. He doesn't have one dime in his budget to cover the cost of a Social Security privatization plan that in the first 10 years costs over $700 billion. He doesn't have a dime in his budget. Over 20 years, his plan costs over $4 trillion. His answer is, borrow the money. On top of the already record deficits, borrow the money.

I am going to, in a minute, get into why that is a very risky course for this country.

The President also does something very interesting in this budget. He only provides details on discretionary spending. Those are accounts like education, law enforcement, parks--he only provides what he intends to spend in those areas for 1 year. Not since 1989 has a President failed to tell Congress and tell the American people what the outyear effects of his programs are; what the future years' effects of his programs are. But this President, for the first time since 1989, says he is not going to tell us that.

I suspect the reason he is not going to tell us that is because it gets pretty grim by the time you get out to the third, fourth, and fifth year.

When the President's people came to me and said they had a plan to cut the deficit in half over 5 years, and they showed me the plan, I said to them: Why don't you leave out some more things and claim you balanced the budget because what you are doing is you are making progress by denial, by leaving things out.

When I go back and add in what the President has left out, I get a very different picture than is being presented on this floor about the budget going forward. When I go back and add up the things the President has admitted--the need for alternative minimum tax reform and the war costs, when I put in the amount of Social Security money that the President is taking to pay for other things, to try to arrive at what the real operating deficit of the United States is, here is what I find. I find an operating deficit in 2006 of $579 billion; increasing in 2007 to $584 billion; in 2008 to $586 billion; in 2009 to $595 billion; and improving by $1 billion in 2007 to $594 billion.

These are my best estimates of what the operating deficits are going to be under the President's plan. Not an improvement. There is no cutting the deficit in half. Instead, massive operating deficits, adding to the debt by almost $600 billion a year, each and every year for the next 5 years, and after 5 years, it gets much worse. This is not what the American people deserve in terms of being told about the fiscal condition of their country.

Let me go back to the specifics of the things the President has left out. In war costs there is $82 billion in a budget supplemental put in this year, but there is nothing past September 30th of this year in the President's budget. The Congressional Budget Office says $383 billion is what we can expect. There is $300 billion left on the cutting room floor, real costs that a real budget would include.

It is not only that we see a hiding from the American people of how serious our fiscal condition is. The President's tax cut proposal is where it is most dramatic. The dotted line on this chart is the first 5 years of the President's plan. Making the tax cuts permanent has a modest cost in the first 5 years. But look what happens right outside the budget window: The costs of the President's tax cut plan absolutely explode. Is this, perhaps, a reason the President moved from 10-year budgeting to 5-year budgeting? Did he want to disguise the full effect of what he is proposing from the American people? Did he want to hide it so that people did not see where this is all headed?

I have already shown in the next 5 years the operating deficits will be running in the neighborhood of $600 billion a year. Look what will happen if the President's plan is adopted. These deficits are going to skyrocket because the revenue hemorrhage will skyrocket.

It is not just the revenue hemorrhage but the other items as well. This is, according to the Congressional Budget Office, the money that is needed to fix the alternative minimum tax. I said it was over $700 billion. It is actually $774 billion. Not a dime of it is in the President's budget. And it gets much worse after the first 5 years. Of course, the President's budget has none of it. That is hidden from the American people.

On the President's Social Security plan, the first 10 years cost $754 billion. Here is what is in the President's budget: zero. Nothing. When we get to the 20-year cost, others are saying even more than this. My own projection is $4.4 trillion for the cost of the President's privatization plan. Why? Because if you take some of the payroll taxes and divert them into private accounts, you have to replace the money you have taken from somewhere. The President's proposal is, borrow it. Just borrow another $4 trillion.

I am at a loss for words. I feel as though I am involved in a surreal discussion in a surreal exercise on the budget of the United States. We have record deficits now. The President says, cut the revenue some more and add more to the spending, but he leaves a lot of it out of the budget and says he is going to cut the deficit in half. He has been wrong on each and every one of his forecasts. Not wrong by a little bit, but wrong by a country mile.

Here is the Comptroller General of the United States, the head of the Government Accountability Office. He warns the fiscal outlook is worse than claimed. He said to the National Press Club in February of this year:

The simple truth is that our nation's financial condition

is much worse than advertised.

That is the truth. That is the truth, right here. Here is a guy who is telling the truth.

The simple truth is that our nation's financial condition

is much worse than advertised.

I go back to the chart. The President says he is going to cut the deficit in half, but he gets there by leaving out things. When you put the things back, what you see is massive deficits, massive additions to the debt. In fact, by 2015, each family's share of the debt will total, according to our calculations, over $73,000.

That is where these fiscal policies are leading. When the President says ``the people's money,'' he is exactly right. It is the people's money. It is also the people's debt. The President says let's not pay the people's bills. Let's borrow the money. Guess what. In whose name is he borrowing it? He is borrowing it in our names. He is borrowing it in the names of all of us who are responsible for ultimately paying off this debt. When the President says the people's money, absolutely, it is the people's money; it is also the people's debt. The President is running up the debt in a record way and at the worst possible time, right before the baby boomers retire.

There is another part of this that I don't think is being shared with the American people. Where are we borrowing all this money from? Where is it coming from? Increasingly, it is coming from abroad. Here is what has happened. When the President came into office, we owed an external debt. Foreign holdings of our debt were just over $1 trillion. In the short time this President has been in office, that has almost doubled. Foreign holdings of our debt have gone up 92 percent in the term of office of this President. It took 200 years to get external debt of $1 trillion and this President has taken us to $2 trillion in just over 3 years.

Here is where the money is coming from. We have now borrowed over $700 billion from Japan. Hard to believe, isn't it? We have borrowed over $700 billion from Japan. I read in the paper the other day that Japan now holds $840 billion of United States dollars. They are sitting on $840 billion of United States dollars. We have borrowed $712 billion from Japan. We borrowed $160 billion from England. We borrowed $69 billion from the so-called Caribbean banking centers. We have borrowed $69 billion from South Korea. We have borrowed $60 billion from OPEC. That is the oil exporting countries.

Here we are. We have borrowed money all over the world. And it is increasing dramatically. So what? What difference does it make? The difference it makes is it makes us more and more vulnerable to the decisions of foreign central bankers as to the economic security of this country. It is that simple. It is that important.

What happens to your relationship with the banker when you owe money versus when you have a big deposit? Does your relationship change? Sure it does. Our relationship is changing with the rest of the world because we have gone from being the biggest creditor nation in the world to being the biggest debtor nation in the world. So now we are very dependent. When we have a bond action to finance the credit and debt, we are increasingly dependent on foreign governments and foreign central banks to buy this debt. This is a story from January from the Financial Times. ``Central Banks Shun US Assets.'' ``Shifting reserves to eurozone will deepen Bush's difficulties in funding deficit.'' ``Actions likely to undermine dollar's value further.''

Friends, that is the risk being run by these massive budget deficits, by these massive trade deficits. We are more and more dependent on others. We are more and more dependent on Japan loaning us money; on China loaning us money; on South Korea loaning us money.

What happens if they decide some day they are not going to continue loaning us money? What happens then? We have had a couple of indications in the last few months. A few weeks ago, February 23, Korea said they were going to limit their dollar holdings. ``Central bank's plan upsets exchanges.'' ``Fears flared anew yesterday that the United States dollar

might lose a crucial underpinning of support--purchases by the world's central banks--after South Korea's central bank said in a report that it plans to invest more of its holdings in the currencies of other countries.''

What happened? ``news of the report,'' . . . ``sent the dollar skidding on foreign exchange markets. The Euro was trading at $1.3259 late yesterday, up from Monday's close of $1.3067. The dollar fell against the 104.04 yen . . . '' and ``the greenback also sank against the British pound, the Canadian dollar and Swiss franc. The dollar's slide, together with a rise in oil prices, drove stock prices sharply lower.''

These are the risks being run due to a reckless fiscal policy. This fiscal policy of massive record deficits with no end in sight and record massive trade deficits with no end in sight is putting the economic strength of this country at risk.

It is not only Korea. On March 11, last week, Japan followed Korea:

Talk in Japan shakes dollar and treasuries.

The dollar fell and treasury yields rose yesterday after

the Japanese Prime Minister made remarks that suggested the

country's industrial bank could be shifting some of its huge

reserves out of dollars and treasury securities.

What happened? The dollar took another hit. So now we have Korea saying they are going to diversify out of dollars. We have Japan, the biggest lender to our country, warning of the same thing. What would happen if they didn't show up at a bond auction? We hold an auction of United States securities to float the boat to cover these deficits, because when you are spending more money than you are taking in, you have to borrow the money. In the past, we borrowed almost all of it from ourselves. Not anymore. Increasingly, we are borrowing from all over the world. And they are warning us: You are going too far; we might not continue buying this debt.

What happens if they don't show up? We all know what happens. We would have to dramatically increase interest rates to entice them back. That would have severe consequences for our economy.

It is not only Koreans and Japanese. Here is one of the most successful investors in the history of the United States, Warren Buffett. What is he saying? He says in 2005, he is still betting against the dollar. Warren Buffett, one of the most successful investors in America, is betting against the dollar.

When the stock market was soaring in the late 1990s, Warren

E. Buffett now says, he should have sold stocks rather than

just complain that they were overvalued. Now Mr. Buffett, the

billionaire investor, says he is acting on his view that the

dollar is still headed down, even though it makes him nervous

that so many agree with him.

So he has bet a huge amount of money that the dollar is going to continue to decline in value.

We have the South Koreans warning us. We owe them almost $70 billion. We have the Japanese warning us. We owe them over $700 billion. And we have Warren Buffett.

I can tell you, I was with a man who is one of the foremost financial advisers in the country, and he told me last year he was at the annual meeting of one of the wealthiest families in America and the discussion at their annual meeting was exactly what we are talking about here: the enormous risks being run by the United States with these massive budget deficits, massive trade deficits, leading to unprecedented borrowing, not only from our own people, but from countries around the world.

They saw that as a serious vulnerability--this, one of the wealthiest families in America. And the debate was whether they should diversify out of dollar-denominated investments. They concluded, apparently, that they would do that.

Now, all we have to do is look at what has happened to the dollar against the Euro since 2002 to see why they might be concerned. Look what has happened to the value of the dollar. It has declined 33 percent against the Euro in just that period of time. That is dramatic. Every dollar we have has lost 33 percent of its value against the European currency.

So if you are a central banker in Japan, you are a central banker in Korea, and you have loaned all this money to the United States, and you see that those dollar holdings you have in your central banks have declined in value by almost a third against the European currency, might you conclude that it is time to invest some of your money somewhere else?

Friends, this is the risk that is being run by this policy of debt and deficits. These deficits are out of control. They are undermining confidence in the American currency. They are undermining confidence in the long-term economic strength of the country. And this budget does not do anything about it. In fact, this budget makes it all worse. This budget means bigger deficits, not smaller.

The Congressional Budget Office put out a baseline budget, if we made no policy changes, of what would happen. But this budget does make policy changes, and you would think that given these facts, the policies would be to reduce the deficits. That is not what this budget does. This budget increases the deficits each and every year compared to a policy of putting everything on automatic pilot. Now, that is a fact.

What are the potential consequences here? If the dollar were to decline even more precipitously than it has already, there are very few options left. You have to, first of all, dramatically increase interest rates. What difference would that make? Well, let's look for a typical American family.

A 1-percent increase in interest rates will raise the payment on a 30-year home mortgage of $150,000 by $1,200 a year. On a $300,000 mortgage, it would raise it $2,400 a year. On a $450,000 mortgage, it would raise the payment $3,600 a year. And it would not be only on a house mortgage. It would be on a car payment, student loan payment, all the corporate debt that is out there, and all the Government debt. If interest rates rose dramatically in order to offset the effect of foreign central banks being unwilling to loan us more money, the economic consequences here could be severe.

When I look at the tax policy that underlies this budget, it also raises the serious question of fairness. Because under the President's plan, the top 1 percent in our country, those who earn over $402,000 a year, get 30 percent of the benefit. The top 1 percent get 30 percent of the benefit. The top 20 percent get over two-thirds of the benefit. They get almost 69 percent of the benefit.

We hear a lot from our friends: Well, the higher income people pay more in taxes. That is true. They pay more in income taxes. But our friends on the other side always want to leave out the payroll taxes that everybody else pays. And when you put the two together, you find that the wealthiest among us do pay more, but they do not compare anywhere close to the proportion of the tax cuts they are getting.

When we look at 2004 and how the tax benefits stacked up in that year, what we see is, from the combined effect of the 2001 and 2003 tax cuts, a middle-income household got $1,000 and the top 1 percent, those earning over $400,000, got $78,000. If we were going to have a bar on the chart to compare what those earning over $400,000 got in tax benefit as compared to what a middle-income household got, the bar would have to go 17 feet higher. It would go almost to the ceiling of this Chamber to compare what the top 1 percent got in comparison to the middle-income people in the country. Is that fair? That is what the President's tax policy says is fair. Give those who are the top 1 percent $78,000 in tax benefit; give the middle income $1,000.

In this budget is a continuation of the dividend and capital gains tax cut. Those cuts will provide a millionaire, on average, with a tax cut of $35,000. Somebody earning $50,000 to $200,000 gets $112. Let me go through this again. This is the Urban-Brookings Tax Policy Center that has done this calculation. The dividends and capital gains tax cut that my colleague was praising gives those who earn less than $50,000 a year, on average, a $6 tax reduction. That is the vast majority of people in this country.

For these tax types--dividends and capital gains--the average savings for an American earning less than $50,000 is $6. For somebody earning $50,000 to $200,000, they get a tax savings of $112. And the dividends and capital gains tax cuts are a major part of this budget.

For those earning $200,000 to $1 million, they get an average tax cut of $1,480. But for those who earn more than $1 million, they get, on average, a tax cut of $35,000.

Now, this is some people's sense of fairness; it is not mine: $6 to those who earn less than $50,000 a year, and $35,000 to those who earn more than $1 million. We have the biggest deficits in the history of the country, and no end in sight, and this is what we are going to do? That is what we are going to do if we pass this budget.

Our friends on the other side say: Well, those who are at the top pay more in taxes. That is true. Those who are at the top pay more in taxes. That is absolutely true. But do you know what, they are getting 30 percent of the benefit of this tax cut, and they pay 16 percent of the tax burden. So they pay more, but they are getting much bigger benefit than what they pay.

My friends, at some point we are going to have to deal with reality. The reality is, we are not paying our bills in this country. We are not coming anywhere close to paying our bills. And our friends on the other side come with a budget that says we have no intention of paying our bills any time in the foreseeable future. We are not going to come anywhere close to paying our bills.

Then you get to the question of priorities, which is a very important question as we go forward. Let me say to my colleagues, for those earning over $1 million in 2006, the total cost of the President's tax cut proposals for that 1 year alone is $32 billion. Let me repeat that. For those earning over $1 million a year in 2006, the tax cuts to them cost $32 billion in that year alone.

On the other hand, the cost to maintain veterans funding at the 2005 level would be about $300 million. So in this budget, they are saying it is 100 times as important to give the Bush tax cuts to those earning over $1 million a year as it is to maintain funding for our veterans. Is it 100 times as important? Is it 100 times as important?

Well, it is not only veterans. That same question can be asked of the COPS Program that has put 100,000 police on the street to make our cities and towns safer. Again, the cost of the tax cut for those earning over $1 million a year in 2006 is $32 billion for that year alone. The money to restore the COPS Program would be $500 million. So what you have to ask yourself is, is it 60 times as important or could the very wealthiest among us, those earning over $1 million a year, give up one-sixtieth of their tax cut for that year to keep 100,000 police on the street? I think that is a question we should ask. I know what my answer would be.

Education. It would cost $4.8 billion to restore the education programs cut in the President's budget. Again, for that same year, the tax cuts for those earning over $1 million cost $32 billion. Would the wealthiest among us be willing to give up one-sixth of their tax cut to restore the cuts to education?

The same applies to community development funding. I have heard from virtually every mayor in my State. It costs $1.7 billion to restore the cuts there. At the same time, we are going to give a $32 billion tax cut to those earning over $1 million a year in that 1 year alone.

Low-income heating assistance. It costs $220 million to restore the money, a little tiny sliver on the chart--$220 million. At the same time, we are going to spend $32 billion on tax cuts for those earning over $1 million a year.

For agriculture, this chart looks at it in a little different way. The President is cutting $7.5 billion there. The cost, over the same period of time, for those earning over $1 million a year is $185 billion. That is 25 times as much.

My friends on the other side say that somehow this budget is going to reduce the deficit. No, this budget does not reduce the deficit. If we compare it to the Congressional Budget Office's baseline--there are no policy changes; we continue what we are doing now--this budget increases the deficit each and every year.

The biggest increase is in the next year--$63 billion of additional deficit if we pass this budget compared to continuing what we are doing now. If we make no policy changes, just continue what we are doing now, we would have $63 billion less in deficit than if we pass this budget.

I want anybody who votes for this budget to go out and explain to the American people why, at a time of record budget deficits, they are passing a budget that increases the deficit. I want to hear that explanation.

Again, when we go back and look at the things that have been left out of this budget compared to, if we go back and include the additional war cost that is left out of this budget, the alternative minimum tax expense that is excluded, if we take the money that is being diverted from Social Security and used to pay for other things, here are the operating deficits we see under the budget that is before us. It is a little better than the President's, but not much: $587 billion, $583 billion, $582 billion, $582 billion.

What is all this talk about cutting deficits in half? The only way they get there is they leave out things. They leave out the money they are taking from Social Security. They leave out the money for the war. They leave out the money for the alternative minimum tax. Just leave out things. If you put them back, massive deficits.

This is what is going to get added to the debt, not the numbers they are talking about. This is what is going to be added to the debt.

And if you doubt this is the case, let's look in their budget. Let's look at their own document. This is their own budget resolution. Let's look year by year. I have said that they are going to be adding almost $600 billion a year to the debt. I understated it. I apologize. They are going to be adding much more to the debt than that. I was just doing an operating budget.

If we look at what their own document says, they are going to add to the debt every year. For 2005, $669 billion is going to get added to the debt, according to their own calculations. Next year they are going to add $636 billion to the debt. The next year is $624 billion. The next year is 622. By the fifth year, 611. Where is the cutting of the deficit? Where is it? It is magical. There is no cutting. This is what they say about their own budget.

This is what they say they are going to add to the debt. This isn't my number. This isn't my presentation. This is theirs. This is from their own budget document. And what does it say? They are going to add to the debt $600 billion every year of this budget.

The President says it is important to do something about the deficit. They say it is important to do something about the deficit. They are not doing anything about the deficit. That is their own calculation about what is going to happen.

Remember what the President told us about 2008. He told us in January of 2001 that there would be virtually no debt left by 2008. That is what he told us. This is what we now believe the debt will be in 2008. Instead of virtually no debt, we are going to have almost $6 trillion of debt. This is what he said was going to happen. This is what is really happening.

The President of the United States has been wrong by a country mile on every one of his major assertions about the fiscal condition of our country. It has real consequences.

When we look at the budget that our Senate Republican colleagues have put up, let me just say it is a little bit better than the President's in some ways. But it still has additions to the deficit, bigger deficits, more debt by their own calculations. It still has flawed priorities. Here is veterans funding. It costs $300 million to maintain veterans funding. They are going to give $32 billion in tax cuts to those earning over $1 million a year. On the COPS Program, it costs $500 million to restore the cuts in the COPS Program and put 100,000 police on the street. But they would rather give--in fact, by a sixtyfold margin--tax cuts to the wealthiest among us. That is more important to them.

It is more important to them to give those tax cuts to those earning over $1 million a year than it is to restore the cuts to education, six times as important. Are those really the priorities of this country? Is that what this country thinks is important?

I will have more to say about this budget as we go forward. But this is a budget that is not facing up to the real challenges facing our Nation. This is a budget that basically ducks and runs. This is a budget that basically says: We don't have to worry about that. We will talk as though we are worried. We will use the words. But the actual budget is not going to do anything about these mounting deficits and debt that fundamentally threaten the economic security of the country.

We should be doing much better than this. At some point, I hope it is not a crisis that gets us that. I still believe we have the ability and the will to act to face up to the crisis rather than letting it overcome us. But this budget doesn't face up to it. This budget doesn't do that. This budget just lets the good times roll--more tax cuts, more spending, even though we cannot pay our bills now. I believe deeply that is a fundamental threat to the economic security of our country because we are not just borrowing this money from ourselves anymore, we are borrowing from countries all over the world. That makes us vulnerable to their decisions about whether they are going to continue to loan us money.

I believe it is past time for the President to reverse course and to call on Congress and to put his administration to the task of an overall plan to face up to the shortfalls in Medicare, in Medicaid--by the way, the shortfall in Medicare is eight times the shortfall in Social Security. The President has no plan to deal with that, none. He would rather focus on Social Security, which is a challenge, a long- term funding problem. I will repeat, the funding problem with Medicare is eight times as big as in Social Security. My own view is that we ought to be working on it all. We ought to have everything on the table--Medicare, Medicaid. I salute my colleague from New Hampshire who put a focus on Medicaid, where spending is going through the roof in States and for the Federal Government, but we ought to be putting the focus on all of these areas, including the budget deficits, because I believe only in that way will we come up with a plan that really strengthens the country.

I yield the floor.

Mr. President, the words of my colleague are right on target. I wish the budget matched the words. The Senator acknowledges the need for fiscal discipline. This budget does not provide it. As I have indicated and shown from their own numbers, the debt goes up $600 billion a year under the budget the Senator advocates. That is fiscal discipline? No, no.

My belief is that fiscal discipline represents a deficit going down, not going up. My view of fiscal discipline is one that reduces the debt, not increases the debt.

The Senator's own budget documents show that he is going to add to the debt $600 billion a year each and every year for the next 5 years. And they call that fiscal discipline? I mean really, this stands words on their head.

It reminds me of Orwell: War is peace, love is hate. Fiscal discipline is adding $600 billion a year to the debt? Please.

Now, the Senator says we did not offer an alternative in the Budget Committee. That is true. We offered alternatives by amendments. The Senator says we would have added spending. The Senator is correct. We paid for every dime of it and over and above. What was the spending we added? The Senator says we added over $200 billion in spending. The Senator is correct, and $200 billion of it was to pay for the war they do not pay for. Now, who is being straight with the American people-- those of us who paid for the war or those who make believe they do not have to pay for it?

We provided the revenue to cover the cost. That is a new idea around here, to actually pay for something. Those are the amendments we offered. If we take out our amendment to cover the war costs, we offered $20 billion of spending and $47 billion of deficit reduction. We had more in deficit reduction than we had in spending, and we paid for the war. That is fiscal responsibility.

There is no fiscal responsibility in a budget that adds, by its own terms, by its own calculations, $600 billion a year in debt. That is not my estimate; that is theirs.

Let us review the history because history is important. This goes back to 1980. The red line is the spending line of the United States. The green line is the revenue line. One thing our Republican friends have been very consistent about is massive deficits. That is what happened the last time they were in charge back in the 1980s: massive deficits, much more spending than revenue. Then the Democrats took over. The spending went down.

The Senator says spending never goes down. Wrong. Spending went down as a share of gross domestic product, which is what the economists say is the best way to measure it because it takes out the effects of inflation. Spending went down from 22 percent of gross domestic product to just over 18 percent of gross domestic product when the Democrats were in charge. The revenue went up. Yes, we raised taxes on the wealthiest among us so we could balance budgets, so we could pay for things.

What was the result of those policies? The longest economic expansion in our Nation's history, the lowest unemployment in 30 years, the lowest inflation in 30 years, and one of the strongest periods of business investment in the Nation's history. That is the result of those policies combined with private sector initiatives made possible by real fiscal responsibility.

Our friends always want to concentrate on the spending side. They forget that deficits are the result of the relationship between spending and revenue. They never want to talk about the revenue side because look what happened on the revenue side on their watch. It collapsed. Even with spending that increased again under their watch--I am not faulting them for this increase in spending because it was largely defense and homeland security--the fact is the spending increased.

Look going forward; their spending continues to go up.

Meanwhile, the revenue goes up a little bit, but it is far short of what they want to spend. So what they are telling the American people is, more deficits, more debt, more deficits, more debt. That is their plan. And then what? What are they going to do when the baby boomers retire? I can tell everyone what they are going to do. They are going to slash Social Security. They are going to slash Medicare. That is going to be their answer. Meanwhile, deeper and deeper into debt we sink.

Is my colleague seeking time? I am happy to yield time to the Senator off the resolution.

Mr. President, again, my colleague referred to what Democrats offered in the committee. To be clear, we offered amendments costing $217 billion. We offset that with revenue of $245 billion. But one amendment alone of ours cost $197 billion. What was it? It was to pay for the war. It was to pay for the war. Our friends' budget does not pay for the war. They make believe there are no costs. We do not think it is responsible, so we put the war cost in the budget, and we paid for it. That is fiscally responsible. That is exactly what a budget is supposed to be about.

The President sent up a budget with no war cost past September 30 and said it is hard to estimate. Of course it is hard to estimate. That is what a budget is about. There is no family in America which leaves out the utility bill because it is hard to estimate. There is no family in America which leaves out the food cost because it is hard to estimate.

They leave out things. It is no wonder we are in deep deficit and a massive increase in debt when they come with a budget and they leave things out.

My colleague says the mark has no assumptions concerning discretionary policy, that all he is providing to the Appropriations Committee is a budget authority total and an outlay total. It is true that the budget resolution does not dictate policy decisions to the Appropriations Committee. However, it is also true that there are policy assumptions embodied in the numbers. This is not just numbers on a page. That is not what a budget is about. There are assumptions about how you get to those numbers. And while it is true the Budget Committee cannot and does not dictate to the Appropriations Committee how they use the money allocated to them, it is true there are assumptions behind the budget.

As we look at the assumptions in this budget, we see a striking resemblance to those of the President's. Are we to assume it is a mere coincidence that the chairman's mark is nearly identical to the President's request? Did that just somehow happen but it is not connected to any policy recommendations? The President has made quite clear in his budget what he anticipates cutting and what he anticipates increasing. In the budget offered by our colleagues in the Senate, the numbers--the big numbers--are the same as the President's numbers.

Now, do they have the same assumptions or different assumptions? Look, I think we all know that they have carefully tracked the President's proposal. They have said that to us themselves. We also know that at the end of the day the Budget Committee says this is the amount of money available; that is it. When you get past that money, it is not going to be available.

The budget determines how much money is available for the Appropriations Committee to spend.

We don't dictate how they do it. We don't dictate how the Finance Committee raises the money. We tell them how much money to raise. We tell them how much money they have to spend. But these numbers didn't pop out of nowhere. They are based on assumptions of how much each of the committees would get for all of the purposes contained in their area of responsibility. We know this budget is tightly linked to the President's budget. In fact, the numbers of spending are the same. These amendments do send a clear signal on what the priorities are of the Congress.

Mr. President, let me respond briefly by saying, I commend the Senator for putting $50 billion in his budget. I referred in my earlier remarks to the President's budget that had no money past September 30 of this year for the war. In the Senator's budget, it is true, he has put in $50 billion

for the coming year. But that is well short of what the Congressional Budget Office tells us is going to be necessary. The amendment we offered on our side in committee was to fully fund the war obligations according to what the Congressional Budget Office has told us would be required.

Mr. President, I am happy to yield 20 minutes to my colleague, the Senator from Oregon, who is a valuable member of the Senate Budget Committee.

Mr. President, the Senator is correct on both counts. No. 1, there is $70 billion of tax cuts that are in this budget before us; that is, net tax cuts. Ironic, given the fact that we are running record budget deficits. Secondly, with respect to Medicaid, the two drivers that are very adversely affecting Medicaid are, No. 1, we have had millions of additional people come into the system, so the number of people who are dependent on Medicaid is growing dramatically. Of course, as the Senator well knows, medical inflation is running much higher than the underlying rate of inflation. That has put enormous pressure on the Medicaid program.

It is also fair to say it is undeniable that there are people who are engaged in spend-down schemes to reduce their assets so they qualify for Medicaid. That is also putting pressure on the overall circumstance we face. We have had, between 2000 and 2003, 8.4 million new enrollments in Medicaid. That is because, as the Senator so well knows, of the economic downturn. The recession meant millions of additional people were pushed onto the Medicaid rolls. That has put enormous pressure on spending.

We also have the hard reality, as I mentioned this morning, of the United States not being able to pay its bills. We face an incredible challenge going forward with respect to Medicare. In fact, the shortfall in Medicare is many times the shortfall in Social Security. I indicated this morning, the shortfall in Medicare is eight times the shortfall in Social Security.

I wanted to talk a little bit about the Social Security problem because we are going to be addressing that a lot. One of the things that gets too little attention is the underlying assumption about Social Security. The forecast for economic growth that is the basis for the concern about Social Security is a very low rate of economic growth over the next 75 years. They are projecting a rate of economic growth of about 1.8 to 1.9 percent. Economic growth over the previous 75 years was 3.4 percent.

One of the major components of economic growth is productivity growth. This chart shows the Social Security actuaries are assuming productivity growth at this red line. They are assuming productivity growth of 1.6 percent for the next 75 years. Yet in recent years, we have been getting much higher rates of productivity growth than their estimates. You can see in 2000 to 2004, the productivity growth has been in the range of 3.6 percent.

It is important for people to know that the underlying assumptions about a problem in Social Security assume quite pessimistic views of economic growth, and of course productivity growth is one of the central components of economic growth going forward. The actuaries are assuming over the next 75 years productivity growth of 1.6 percent, when in the most recent 4 years we have had productivity growth of more than double that amount.

Here is the problem we face with Social Security, and we face this problem with Medicare and, to an extent, we face it with Medicaid as well. This is the number of Social Security beneficiaries who are going to retire. Currently we are at about 40 million beneficiaries. As this chart shows, that number is going to grow dramatically to over 81 million by 2050. It is this demographic bulge that is putting enormous pressure on the Social Security Program, Medicare Program, the Medicaid Program, and what makes the overall budget circumstance utterly unsustainable.

Curiously enough, the President acknowledges we have a shortfall in Social Security of $3.7 trillion. But in his budget, the first thing he does is take another $2.5 trillion out of Social Security over the next 10 years. I want to be clear about this. The President says we have a shortfall in Social Security. He is right. The estimates are widely put at $3.7 trillion over the next 75 years. Again, that is based on a very pessimistic forecast of economic growth, much lower economic growth for the next 75 years than we have had over the previous 75 years.

The President's first move is to take all the money that is available to take out of Social Security over the next decade, $2.5 trillion worth, something he had promised not to do. So he is making the problem much worse.

In fact, when the President submitted his budget in 2002, he said:

None of the Social Security surplus will be used to fund

other spending initiatives or tax relief.

Now let's look at what he is doing. He is doing precisely the opposite. He is taking every penny of Social Security money that is available and using it to pay for other things. Over the next 10 years, from 2006 to 2015, here are the Social Security surpluses during that period. I use the word ``surpluses'' advisedly because it is really not surplus. It is a temporary surplus. There is more money coming in from the Social Security trust fund than is going out in each of these years for the next 10 years, $184 billion in 2006 income over and above outgo. That builds up by 2015 to a $300 billion surplus in Social Security. That is, we are getting more revenue than we are spending in benefits.

Under the President's budget and under the budget that has been submitted by our colleagues, every penny of this money is being used to pay for other things, every penny of it, instead of being used to prepay the liability or pay down the debt to better position us to meet the promise of Social Security. Instead, under the President's plan, he is taking all of it, $2.5 trillion, and using it to pay for other things.

When the President says there is a shortfall in Social Security of $3.7 trillion, again that is based on an assumption. The assumption is the economy is going to grow at about 1.8 or 1.9 percent every year for the next 75 years.

In the previous 75 years, the economy has grown at 3.4 percent. So this is a very pessimistic forecast. But using that forecast, the shortfall of Social Security over 75 years is $3.7 trillion. Over the same period, the cost of the President's tax cuts is much more--$11.6 trillion. So I hope that helps to put this in some perspective for those who are listening.

The President's answer is to, first of all, cut the benefits dramatically. He proposes moving from an indexing of the benefits from a so-called wage indexing to price indexing. The benefit reductions that flow from that decision are the following: Those retiring in 2022 would see a 10-percent reduction; in 2042, a 26-percent reduction; in 2075, almost a 50-percent reduction. So that is what happens to those folks.

Then there is another part of the President's proposal that deserves attention, and it has gotten virtually none. That is the offset provision. The way the offset provision works is quite unusual. Under the President's plan, if you set aside money for your private account-- let's say you set aside, over 40 years, $1,000 a year. That account balance assumes a real rate of return of 3.7 percent. Real rate of return is rate of return plus inflation. The rate of return is 6.5 percent. The loan is compounded at a 5.8-percent nominal rate. To put it in plain English, say you put aside $1,000 a year and you get a 6.5- percent rate of return during that period. At the end of the period, you would have $92,000 in your account in today's dollars. But that is not yours free and clear under the President's plan, because they assume the Social Security trust fund loaned you that money. They want to get paid back and they want to get paid back with interest. So when you hear the President say that is your account, you got your name on it, nobody can take it away from you, that is true as far as it goes. But it leaves out a very important fact. The very important fact it leaves out is that you owe the money--underlying money, the thousand dollars a year plus interest--you owe it back. But you don't pay it back out of your individual account. You pay it back out of your other Social Security benefits. Under this scenario, where you have put aside $1,000 a year and you have gotten a 6.5-percent rate of return, you would owe back $1,000 plus the real rate of return of 3 percent, or roughly 5.8 percent, including inflation. So you would owe back $78,000--not out of your individual account, but out of your already reduced Social Security benefits.

I have never heard the President describe it this way, but I have gone over his plan in great detail with his people and that is how it works.

Let me give you another possibility, because you know this is assuming--the first chart here--a 6.5-percent rate of return. What if you don't get that good a rate? What if you get a lower rate than 6.5 percent on your investment? Under the President's plan, workers earning 5 percent must repay 120 percent of the value of their individual accounts. I know that sounds unbelievable, but that is the way it works, because they are making an assumption that the money that went into your individual account was loaned to you by the Social Security trust fund; they expect to be paid back and they expect to be paid back with interest. Whether you made money on your account or not, they are expecting you to be paying back the money that was theoretically loaned to you, plus interest. So in this case, let's assume you put $1,000 a year aside in your account, and that your account only got a 5-percent rate of return. At the end of the period, you would have $64,000 in your account, but you would owe back $78,000 because they are expecting that thousand dollars a year back, plus interest. They are expecting a real rate of return--3 percent plus inflation--roughly 5.8-percent rate of return on what you have to pay back.

Now, I want to go through this again because I don't think a lot of people understand that is how these private accounts work. I hope it is clear to people from looking at this, you could wind up owing back more than you have in your account. OK. Let's go over it one more time so that people have a chance to see how this works.

Under the President's plan, you are able to put aside $1,000 a year into your account. You are able to earn a return on that. In this example, over a 30-year period, if you set aside $1,000 a year and you have a 6.5-percent rate of return, you would have $92,000 in your account in today's dollars. But, remember, you have to pay back what was theoretically loaned to you from the Social Security trust fund. You have to pay back the $1,000 a year, plus interest. The interest that they are expecting to get back is 5.8 percent. So you owe back, under this example, $78,000 in today's dollars. Again, you don't pay it out of your individual account or your personal account; you owe it back out of your traditional Social Security benefits.

I am going to conclude on this example. I see the leader is here. I want to make sure we go to him next. He has a lot of other things to do.

In this example, let's say you only earned 5 percent a year for 30 years. Actually, this example is over 40 years. If you only earned 5 percent a year, you would have $64,000 in your account, but you would owe back $78,000--again, not out of your personal account, but out of your already reduced Social Security benefits. So I think it is very important for people to understand how this works.

The final point I will make is, at the very time the trust funds of Social Security and Medicare go cash negative, the cost of the President's tax cuts explodes. Remember, he is making these tax cuts permanent. The cost increases dramatically over time. What this chart shows is the green bars, which are the Social Security trust fund, running, as we described, surpluses now. The blue bar is the Medicare trust fund. When those go cash negative out here, at that time, the cost of the President's tax cuts explodes, driving us right over a cliff into huge deficit and debt.

This is a plan that does not add up. It does not make sense and it fundamentally threatens the economic security of the country.

I thank my colleagues and yield the floor.

Mr. President, I will take a couple of brief minutes to respond to the leader and indicate that the problem I see is the words continue to be good, but the words are almost totally divorced from the reality of this budget. The longer I am here, the

more stunned I am at what a gap there is between rhetoric and reality.

The rhetoric is all about fiscal responsibility and restraint, but that is not what this budget does. That has almost no connection to this budget.

What am I talking about? I am talking about going back and looking at what this budget is doing and adding back the costs it has omitted. The majority leader talked about the $80 billion of the supplemental it has for the war. Yes, it does. Unlike the President, he has no money for the war past September 30. At least this budget has $50 billion in a reserve fund for the war, but nothing beyond that.

The Congressional Budget Office says that is not the cost of the war. The cost of the war is over $380 billion, not $130 billion. There is a $250 billion difference. Well, if we put that back in and we put back in the alternative minimum tax that costs $700 billion to fix, there is not a dime in this budget to do it. We all know it is going to have to be done. Three million people were affected last year. Ten years from now it is going to be 40 million people. Does anybody believe we are not going to do anything?

Last year, the President at least said, here is the money for 1 year. Now he has nothing. This budget from our colleagues has nothing. The $700 billion is left out. I said to the President's people when they showed me this budget, why did you not leave out some more things and claim you balanced the budget?

They said they are going to cut the deficit in half. They are going to cut the deficit in half by imagining. They are going to cut the deficit in half by leaving things out. When we put back the Social Security money that they are taking, $2.5 trillion that they do not count, here is what one sees: Operating deficits every year approaching $600 billion.

Somebody out there may be saying, well, that is Senator Conrad. He is from the other side. He is the loyal opposition. He is giving his view of it.

No, it is not just my view of it, this is their own budget document. Looking at their own budget document, this is what it shows. This is their projection of what the debt will increase by every year of this budget. This is a copy of their budget document, page 5. Here is what it shows. This is their estimate of how much the debt is going to increase every year if their budget is adopted.

Remember what the words were that we just heard. He said the deficit is going to get cut in half over the next 5 years. Is that not what he said? Did he not say he is going to cut the deficit in half over the next 5 years?

Well, here is what their budget document says is going to happen. They say the debt is going to increase in 2006 by $636 billion. This year, they say it is going to increase by $669 billion, then $636 billion, then $624 billion, then $622 billion, $611 billion. Does one see it getting cut in half? Where is it getting cut in half?

They are talking about a deficit projection that leaves out things. When the things are put back that are left out, the amount that is getting added to the debt every year is not getting cut in half. It is hardly being cut at all. This is their budget document.

In this town, words seem to matter more than reality. If the deficit is going down, how can it be the debt is going up so fast? Could it be something is being left out?

Here is what has happened to the debt: $3.3 trillion in 2001, headed for $9.4 trillion in 2015. This debt is going up like a scalded cat. And that is the publicly held debt. Here is the gross debt: $5.8 trillion in 2001. We are headed for $15.8 trillion in 2015, all at the worst possible time, right before the baby boomers retire.

They can put any characterization they want on this budget. They can use any words they want. They can talk about fiscal restraint and getting serious about the deficit. The numbers do not lie. The numbers in their own budget show the debt going up $600 billion a year every year of this budget. Those are their numbers. So when they say they are cutting the deficit in half and they are being fiscally responsible, it is all words, but it is totally detached from the reality of this document, and it is totally detached from the reality of this budget because their own numbers show--and I will go back to it. This is their document out of their budget. They say the debt is going to go up $669 billion, and then the next year it is going to go up $636 billion, and then the next year it is going to go up $624 billion, and then the next year $622 billion, and the next year $611 billion. Where is the deficit getting cut in half?

These are not my numbers. These are their numbers in their budget document. None of this adds up. Running massive budget deficits, running massive trade deficits, $600 billion a year of trade deficits, we are borrowing money all over the world.

Foreign borrowing by this President has gone up 92 percent. We had a trillion dollars of foreign holdings of our debt in the first 200 years of this country. Under this President, in 4 years it has gone up almost 100 percent. As a result, we owe Japan over $700 billion. We owe China almost $200 billion. We even owe South Korea $69 billion. So what? What difference does it make? The difference it makes we have seen twice in the last 2 months. We saw South Korea announce they were going to diversify out of dollar-denominated securities. The stock market went down 170 points in a day. The dollar went down sharply. Then, just a week ago, the head of Japan said they are going to diversify out of dollar-denominated securities. The dollar took another big hit. The dollar is down 33 percent against the Euro in the last 2.5 years. Is anybody watching? Is anybody paying attention? Does anybody care? Does anybody understand the consequences of the risks that are being run here, of massive deficits, of massive debt, of massive borrowing from countries all around the world that makes us more and more vulnerable to decisions they make in their central banks, and the warning signs?

First South Korea says: Boy, I don't know about holding all these dollars. These dollars keep going down in value. Why should we hold onto them? Maybe we should get into some other currency.

The head of Japan says: Boy, this is risky business. I don't know if we should keep doing this.

Warren Buffett, one of the most successful investors in the world, says he is betting against the dollar in 2005. Last year, he made a $300 million bet against the U.S. currency, and he made a lot of money on that bet. This is risky business.

I indicated the last few weeks I talked with somebody who, last year, had been at the annual meeting of one of the most wealthy families in America. They told him they are getting ready to diversify out of dollar-denominated securities because of these massive deficits that are being run and the risks of a run on the dollar. This budget just continues that risky strategy.

I see the Senator from New Mexico is here. I yield 20 minutes off the resolution to the Senator from New Mexico.

Amendment No. 143

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

Mr. President, today we begin discussion of the Federal budget, which is, of course, one of the primary functions we are supposed to do as a governing body in the Senate and the House. Interestingly enough, under the rules of the Congress, something which I don't think most people recognize, the President has no official role in the budget. It is a document which is produced by the Senate and the House. It is called a resolution. The President doesn't sign it. The President sends up his budget, but his budget is not officially part of the process in the sense that he signs the final document. In a unique way, the Budget Act puts on the Congress the responsibility of doing a budget.

Now, the President has sent up a budget. Of course, he is the leader of our party and of the country. As such, we have given it very significant credibility and have actually tracked it quite closely in the budget which was produced by the Budget Committee.

Before we begin the specifics of the discussion on the budget, I want to thank the members of the Budget Committee for pursuing a very efficient and professional markup last Thursday. I especially thank members on my side, who were there for all of the votes. It is the only committee in the Senate that requires that you actually be there and physically vote versus using a proxy. They participated aggressively in the debate. I also thank the ranking member, Senator Conrad, and the members of his party for expediting the process. They had a lot of amendments they wanted to put forward. They put them forward in an extraordinarily professional and effective way. As a result, we were able to move through the process and debate issues which are critical to the Nation.

A lot of issues are raised by the budget because it touches everything. There are two basic issues which I think our budget attempts to address. The first, of course, is how you control spending, how you make sure that you do the most with the dollars you have, but that you don't demand of the American people more dollars than they can afford to pay through taxes, and that you not end up passing on to your children and your children's children significant deficits, that you not borrow excessively in order to fund the Government. The short-term issue which that involves is the fact that we have, for the last few years, been running very significant deficits. Those deficits are, in my opinion, a function of two basic events.

The first is that in the late 1990s, we saw the largest economic bubble in the history of the world. A bubble is an inflation of the market, a perversion, really, of the market and a period where you essentially find that the economics of the times, specifically the ability to issue stock through IPOs, through creation of corporations, is creating artificial value, that the stock is not supported by real value. It is actually a form of printing money, for all intents and purposes.

In the history of the world there have been a lot of these bubbles. The two most significant ones were the tulip bubble in Holland and the South Seas bubble involving the English investment in South Seas companies. As a percentage of the economy in the world at that time, they were huge bubbles and they led to significant economic disruption and negative events.

They were nothing compared to the Internet bubble. When the Internet bubble burst, as all bubbles do--especially economic bubbles--there was a significant downturn in the economy, and a huge recessionary event was generated. Explosion of that bubble was also followed by, obviously, the attacks of 9/11. They had a massive impact on us. Obviously, we lost many lives and it changed the whole culture of our country. But the economic impact was also dramatic. The economy slowed dramatically as a result of the attack. We had to reorient the Federal Government activity and we had to significantly, dramatically ramp up our commitment to national defense, homeland defense, make massive capital expenditures that we had not anticipated making in the area of homeland defense. Not only did the economy slow, which means revenues slowed, but spending had to go up dramatically as a result of that.

The effect of that was we headed toward a recession, went into a recession, and revenues of the Federal Government dropped precipitously and spending went up to fight the war on terrorism.

Some would argue that the deficits were also a function of President Bush's decision to reduce taxes during this period. I argue the opposite. I would say that the decision to reduce taxes, especially taxes on people's income, was one of the best economic decisions of the period, because it meant more money was left with consumers and, as a result, the economy had more money in it and, as a result, people were able to spend more money and, as a result, the recession was shallowed out. There would have been a much more severe, dramatic, and damaging recession had those tax cuts not gone into place. We are seeing now, as a result of those tax cuts, their benefit, which is that the economy is coming back in an extremely strong way and

revenues are starting to grow with equal strength. Last year, they grew at 9.5 percent. This year, they will grow by about 7 percent. For the foreseeable future, Federal revenues are going to grow over 6 percent, which is a function of the fact that we have changed the way taxes are collected in this country, so we are incentivizing people to go out and be productive and spend money to create jobs and, as a result, we are seeing more economic activity and we are seeing more revenues come in because there are more taxes being collected from the economic activity.

Two of the most successful tax cuts during this period were, in my opinion, the dividend rate cut and the capital gains cut, both of which led specifically to dramatic increases in Federal revenue. The capital gains rates have seen huge jumps in revenues at the Federal level, which are a function of the fact that people who had been sitting on economic growth and assets, capital gains, had just been sitting there. They didn't want to pay the tax, so they were sitting on the assets. With the capital gains cut, people said I can now sell this asset and reinvest. That has two very positive economic effects.

The first is it means more revenues for the Federal Treasury. Those gains would not have occurred without that rate cut because there would have been no sale and no taxable event.

Second is that the money generated from those sales is being reinvested more efficiently in the economy because people are taking cash and reinvesting it in a way that it will earn more money. Therefore, you are creating more jobs as a result of putting more capital more efficiently back into the marketplace.

The same could be said for the dividend cut. For years, corporations in America had basically piled up dividends, piled up resources, and not paid them out to their stockholders because it was a double tax. First, they are taxed on profits at the corporate level at 32, 35 percent; and then when we pay out the profits out, the individual taxpayer who happens to be an owner of the company, most of whom are working Americans and have that ownership through their pension plan-- truck drivers, restaurant people, people who work in manufacturing facilities--then pay another tax because they are hit with the tax as the money is paid out in the form of tax on dividend income--double taxation, rates from 50 to 70 percent as a result of double taxation. So we cut the dividend rate. The practical effect of that was to say to corporate America, you can now pay your stockholders, most of whom are working Americans, who have a 401(k) or a pension plan--you can pay the Americans who have invested in America through the stock market a dividend and you are not going to have to pay a punitive double tax event. You are going to still pay double tax, but it will not be as punitive as before.

The effect of that was major corporations did pay dividends. Microsoft alone, I think, paid out a $32 billion one-time dividend--a massive dividend payout. The effect of that was to, I think in and of itself, create a 1-percent growth in the economy of the U.S.--or the net worth of America, I think is the term that should be used--but a huge benefit that was to Americans across the board who invested in Microsoft. Millions of Americans working in technology jobs and in restaurants and working in the military, who had stock through their 401(k) or through various other investments, suddenly got this payment which managed to increase significantly their personal wealth and which they could then use to reinvest, which they have, or which they could use to consume, which they have, and as a result the economy is growing faster than at any time since the mid-1990s. It grew 4.4 percent in the last quarter. We have the lowest unemployment in years. All of this is a function of having made the right decisions at the right time on the issue of cutting taxes.

That brings me back to the deficit. Now, the one cloud on our horizon--there are actually two, and they are both tied to the fact that the Federal Government is spending more than it is taking in in the short term and long term. In the short term, that deficit is large. By historical terms, it is not the largest we have had, but it is a large deficit. It is one that must be reduced in the short term. In the long term, we have a much more significant problem. We know there are already on the books Federal programs, specifically in the area of retirement, that are going to radically expand the cost of Government in the next generation. Those programs, which are Social Security, Medicare, and Medicaid, are targeted on benefiting retired people.

We have in this country today a demographic specific that cannot be denied. That is this: There are a lot more people headed toward retirement than has ever occurred in the history of America. The baby boom generation, the largest generation in America's history, is now headed toward retirement. They will begin to retire in 4 years. When that generation begins to retire, it is going to overwhelm the retirement system. This generation is so large that it has overwhelmed every system it has ever hit. In the early 1950s, it overwhelmed the country to make baby carts and cribs. In the late 1950s, it overwhelmed education through elementary schools having to be built. In the 1960s, it changed the culture by moving forward in civil rights and women's rights, and the war in Vietnam became a major issue. As we moved into the 1970s and 1980s and 1990s, it has been the most productive generation in American history and, as a result, has caused America to jump ahead in the area of personal wealth and economic opportunity.

Now this generation heads for retirement and it is going to take on a retirement system--Medicare, Medicaid and Social Security--which was never structured to deal with this size of a generation. All of these major retirement systems were designed with the concepts of the 1940s and 1950s. The Franklin Roosevelt approach, the genius of Roosevelt in the area of retirement systems, was that he and other people understood you could support a pretty decent retirement system as long as you had a lot more people working than retired. Back then, there were 16 people working for every person who was retired. Those 16 people would pay a little bit of their income to make sure the person who is retired had a decent lifestyle. That was the right approach. Today, we have 3\1/2\ people working for every one person who is retired. The result is that we can still support the system. But by the late 2020 period--or the mid-2020 period, when the baby boom generation is fully retired, we go from a pyramid to a rectangle, where there will be two people retired for every person working. The practical effect of that is those two people working for every one person retired are going to have to bear a massive increase in taxes in order to support that one person who is retired.

It is a simple fact of statistics. If you had 16 people supporting 1 retired person--16 people working for 1 retired--and you go down to 2 people working for every 1 retired, it is obvious those 2 people are going to have to bear a much higher burden than the 16. And we have at the same time significantly increased the benefit structure for retired people.

The practical effect of this is, the young people here as pages are going to go out and get jobs--and I am sure they are all going to get jobs and be well employed Americans--they are going to find their payroll taxes to support my generation will have to double--double. Their quality of life, therefore, will be radically reduced because they will not have the extra spending power to send their kids to college. They will not have the extra spending power to buy a nicer house. They will not have the extra spending power to have a good life of maybe taking a vacation. They will have to give up all that to pay taxes to support my generation in its retirement.

In fact, there is today on the books, according to the Comptroller General of the United States, Mr. Walker, $44 trillion--that is trillion dollars; it is hard to conceive what a trillion dollars is but, believe me, it is a lot of money--$44 trillion of unfunded liability which the next generation has already been told they are going to have to pay because our generation has already put the laws in place to require it. And of that $44 trillion, $26 trillion, over half of it, about 60 percent of it is directly tied to health care costs-- Medicare and Medicaid. They are huge numbers, massive numbers.

To put in context, the entire net worth of America, if we took everything America owns today, is only $47

trillion, and yet we have $44 trillion of debt on the books.

Put it in another context, if you take all the taxes paid in American history since George Washington crossed the Potomac, came over here and started this Capitol, $43 trillion, and yet we have a $44 trillion debt on the books and almost the vast majority of it is health care debt required to pay for senior retirement. These are huge numbers we are placing on our children.

To put it in another context, today the Federal Government consumes about 20 percent of the gross national product of the United States, all the Federal Government--that is national defense, that is education, that is environmental protection, that is Social Security, it is health care, everything, put it all together and historically it has been about 20 percent of the gross national product. By the year 2025, if you just take Social Security, Medicare, and Medicaid--those three programs alone--they will absorb over 20 percent of the gross national product and will be going up.

It will mean we are going to put the Federal Government in a historic position: we cannot spend any money on national defense; we cannot spend any money on education; we cannot spend any money on environmental protection, roads, or anything else because it will all have to be spent on this retired class.

What is the point of all this? The point is this: The short-term deficit is a problem, and we have to address it. But the long-term threat to our economy created by these entitlement programs, known as Social Security, Medicare, and Medicaid, is even more dramatic, and we need to do something about it.

We have an obligation to do something about it. That is our job as people who have been sent here by our States to look at an issue which we know is coming at us, an issue of public policy of such significance, and try to reduce its impact, try to make it a more positive event, try to make it an affordable event for our children and our children's children.

So the President's budget which was sent up has attempted to address both these issues. He has first attempted to address the short-term deficit and, second, to address this outyear problem of the entitlement spending. He has also, outside the budget, taken on one of the major entitlement issues, which is Social Security--how to make that system solvent so that it gives decent benefits to those who are retired, but also affordable so that young people, when they pay into the system, which they have to, will get something back on their investment.

You have to give him credit. He stepped into dangerous political waters, but it is appropriate that we address the Social Security issue, and I congratulate him for that. But the budget is not about Social Security because the law does not allow the budget to address Social Security. The budget is about the other elements of Federal spending.

The Federal budget, as brought forward today, tracks fairly closely the President's proposals. It does not reconcile taxes as much as the President asks or might have wanted, and it does not reduce the rate of growth of entitlements as much as he may have wanted, but generally it tracks the proposals the President has put forward.

In the short term, the budget that has been brought forward will reduce the deficit by half. That is over the next 5 years. In the long term, this budget begins to address one of the three key elements of the question of how we try to make the retirement benefits for my generation more affordable to our children, specifically in the area of Medicaid.

Let me go back and go through a few specifics, and then I will turn the rostrum over to the Senator from North Dakota who has been generous to sit through all of this.

On the spending side, to try to get the deficit under control, what this budget does is essentially sets a top number. The Budget Committee does not have the authority to develop programs. We are specifically excluded from that authority. We can make suggestions, but both the Appropriations Committees and authorizing committees that are separate from us ignore our suggestions almost as a matter of course. The only place they cannot ignore us is the upper line number. So we have set what is known as a hard number at the top.

On the discretionary side, discretionary spending making up about 30 percent of Federal spending, about half of which is defense spending, we have set the top number at $843 billion. This number represents about a 4.5-percent increase in defense spending, and it represents basically a hard freeze on nondefense spending.

The defense number may seem large, but actually it is significantly less than what the Defense Department originally planned as part of their spending program. Their ox has been gored, and if you do not believe that, all you have to do is walk outside this room and you will run into six or seven defense lobbyists who say they need more money for more programs to deal with the Defense Department.

On the nondefense discretionary side, it is obviously a hard number, a firm number where we are freezing. We raise that number a little bit in the next 2 years but not much. It is more than what the President asked for, but not a great deal. We cap these numbers with something called a budgetary cap, and that is the key. We essentially say that any Member of this Congress--this Senate anyway--who believes that a committee exceeded the allocation which it will get in the area of discretionary spending--is spending more, in other words, than this top line number as it is distributed amongst committees--that any Member who believes that has happened may come to the floor of the Senate, object to that spending, and get a vote of 60. A supermajority must be voted in order to go forward with that spending. It is a pretty strong budgetary tool for enforcement, and that is in this budget. So we have put in place stringent discretionary controls.

On the entitlement side, we cannot control entitlements with anything other than changes in entitlements. There is this philosophy of something called pay-go. It has no impact on entitlements unless we create new entitlements. The existing entitlements are the problem. They represent about 57 percent of Federal spending, and nothing can control that. They can grow as much as they want, and there is no budgetary way to affect them unless we go back to those entitlements and say to the committees that have jurisdiction over those entitlements: Take another look; see if there is some way we can save some money. And that is what we have done here.

It is not as much as the President asked. He asked we do $62 billion in net number. We have done about $32 billion of entitlement control. It is called reconciliation.

Essentially, the key elements of this reconciliation bill involve the PBGC, which is a Pension Benefit Guaranty Corporation, which needs to be reformed. It is a huge outyear liability for us as a nation. It is massive because so many of these companies that have gotten into trouble have pension funds which are underfunded. This bill tries to begin the process of reforming them, and that is a major positive public policy step of this legislation, not mentioned much by anybody, but it is a big one.

Second is Medicaid reform. This needs to be put in context because there are a lot of people running around here today who are saying: We cannot cut Medicaid; we cannot cut Medicaid. To begin with, we are not cutting anything in the entitlement accounts. That is the nature of the beast. Medicaid spending in the next 5 years will be approximately $1.12 trillion without any action. With this action, Medicaid spending will be about $1.11 trillion, a little bit more. We are suggesting a 14-percent reduction in the rate of growth of Medicaid spending over the next 5 years off a $1.1 trillion base, which means we are suggesting about a 1-percent reduction in the rate of growth of Medicaid.

Medicaid at that period will grow at about 39 percent instead of 41 percent. So we will still have a 39-percent rate of growth in Medicaid instead of 41 percent. Remember, large functions of Medicaid today need reform and that reform will not impact the quality of care given to people.

A significant amount of dollars in Medicaid today is used for general funds for operations of States. We have

serious problems with the way pharmaceuticals are distributed under Medicaid. We have serious problems with the way insurance is handled under Medicaid. There is a whole series of items where we can save money in Medicaid, and this is a minuscule amount of restraint in growth that we are proposing, and will not impact at all--in fact, probably will improve--the delivery of service by giving Governors more flexibility to do more creative things.

That is our plan: to work with the Governors, to reach an agreement, take that agreement to the Finance Committee, and have a concept put forward where the Governors are comfortable--many of the Governors are comfortable--with a change which will give them significantly more flexibility with a little less rate of growth in the dollars.

It is a very doable event. The idea that it is not doable, the idea that anybody would stand up here and say we cannot cut Medicaid's rate of growth by $14 billion off a $1.12 trillion base implies to me that individual does not have any interest in our children or our children's children's future because if we do not get a handle on the health care accounts in this country--and this is just a minuscule attempt to do that--we are essentially passing on to our children a no-win situation where they will never be able--never be able--to pay the cost of the retired population because we are going to grow so much and there are going to be so many of us.

If you deny this change, you are basically denying that you are willing to take on your responsibility to govern, and you are going to kick that can down the road and at some point simply not going to be able to kick it any further. It is simply going to be a bill passed on to our kids.

This is not a big change. In fact, it is a marginal change at best. To describe it as ``marginal'' is probably even an exaggeration. But it has certainly engendered enough run-and-hide policies around here so one would think it was big.

That is the entitlement side: $32 billion of reconciliation instructions over the next 5 years on a base of something like--I have forgotten what the base is--$8 trillion, something like that. I have lost count of what the base is, making that $32 billion adjustment on, but it is huge.

The last item of this budget, of course, is tax reconciliation. That is a point of legitimate contest between two parties. One party likes to raise taxes, and one party thinks people ought to keep their money and spend it themselves. The simple point is, we do not believe we should raise the taxes that have already been put in place at certain rates. For example, we believe we should extend the R&D tax credit, the tuition tax credit, the dividend rate, the capital gains rate, and the small business tax expense. And that is what this package of reconciliation numbers involves, extending all of those.

There is an irony to the Congress. The irony is this: Spending programs never die. They never die. They go on and on. This alleged pay-go concept does not have any impact at all on them. If it is on the books, it keeps going. But if there is tax rate or a tax proposal that has been put in place, they do lapse. They have to be reauthorized. So it suddenly becomes inappropriate to do that. It is called fiscally responsible to have to pay for that, and yet there is no attempt to pay for the extension of the entitlement programs, no attempt to justify those at all. Inconsistency, ironic, and, to say the least, it takes the attitude that the people's money is not their own, that the people's money is Washington's. It is our money, you should not have it anyway. Let us have it and we will spend it for you. That is basically the philosophy behind this approach to governance.

Well, it is not my philosophy. I believe we should maintain a low tax burden on people, or as low as we can afford. Let us remember that the tax revenues are going up dramatically all through this: 9\1/2\ percent last year, 7 percent this year, 6\1/2\ percent next year. The tax revenues are going up. The traditional level of taxes in this country has been about 17.9 percent of gross national product. We are going to hit that number before this 5 years is over.

Sure, we are starting at a low base, but we are starting at a low base because we went through a recession and an attack on 9/11. Now we are headed back up and revenues are headed up because people are productive and they are taking the risk necessary to create jobs because they know their return will be higher as a result of the tax rates being reasonable.

So this concept that we should not be reconciling any taxes is a philosophical difference. That is all there is.

So that is the budget we have prepared, what we brought forward. It is a budget which reduces the deficit over the next 5 years, puts in place stringent enforcement on the discretionary side, addresses the entitlement side through minor reconciliation efforts, addresses the taxes which may expire in this window.

I would note as an aside that the big fight on taxes occurred last year, and the big fight on taxes is going to occur next year because last year we had some major taxes expire, specifically the marriage tax penalty and the child credit. Next year, the window of the budget will pull in the rate reduction, which will expire, and the death tax, which will go back up if we do not do something.

Next year we will have a big tax fight, I am sure, but this year is a lull period. Every tax that is being considered under reconciliation is a tax proposal that has a fair amount of support, whether it is the R&D tax credit, the dividend, the capital gains. These are not the biggies. These are good policy items that should be extended. The tax fight is a lot more smoke than fire in this budget, but it has taken on a personality of its own, and so I presume we will pursue it again.

In any event, as I mentioned, the budget controls discretionary spending with a hard cap. It tries to address the entitlement accounts growth but most specifically addresses the one health care account we are able to address, which is Medicaid--Medicare being off the table for this year as a result of passage of the drug bill last year--and addresses tax reconciliation. There are three elements to it.

If it is passed, it will lead to the first budget since 1996 which fires with real bullets on the issue of controlling spending at the Federal level, and that is the most important point I want to end on.

This is a real budget in the area of pushing forward some fiscal responsibility by having reconciliation instruction on the entitlement accounts.

The discretionary caps are also essential. They have lapsed because we did not have a budget last year, and if we are going to get control over discretionary spending, we need them. So for the first in a long time we have a budget that is serious about disciplining spending. I presume there are going to be a lot of amendments brought forward on this floor to try to get around it because people do not like to address the spending side of the ledger. They would rather spend money. It is much easier.

The people who get the money are the most active in saying the money has to be spent. The people who support spending restraint tend to be less vocal. It is human nature to want to accommodate the people who come to our offices and say, I have to have this money for this program or this money for that program. So spending tends to go up, never goes down.

This budget attempts to at least restrain it so it is affordable, and that is what is critical--putting forward a budget which is legitimate and which attempts to restrain spending so we can begin the process of passing on to our children a fiscally healthy nation.

I thank the Senator from North Dakota for his courtesy in putting up with this long talk, and I thank the President pro tempore for his courtesy in sitting through it.

I yield the floor.

Mr. President, I thank the Senator from North Dakota for his presentation. I wanted to respond to a couple of items. I think they go to the essence of the issue here. First, the vast majority of the Senator's time has been spent discussing the President's budget. We are not voting on the President's budget. I will admit that the blueprint for our budget was based off of a large percentage of what the President proposed. But there are very significant items the President didn't have in his budget that we have in ours.

Specifically, as to this argument that there is no funding for the war, our budget has funding for the war. We have a reserve fund of $50 billion, the purpose of which is to pay the cost of the war in the next budget. No, it doesn't have reserve beyond that because, hopefully, we will be out of the war when 2007 rolls around. Even if it is not, it is appropriate to wait until the 2007 budget before we go forward with another reserve account, when we will have a more accurate estimate. But the $50 billion for 2006 is reasonable. Progress is being made there.

It is very interesting that folks in this body who for so long have criticized the President for pursuing terrorism through the war in Iraq, which has been one of the primary issues in the fight on terrorism--now when things are going fairly well, they are suddenly complaining we are not putting in the money to fight the war in Iraq. Things in the Mideast, as a result of this President standing up and following through in the face of a lot of naysayers and second-guessers and Monday morning quarterbacks and folks who simply don't have confidence that we as a nation can project liberty across the globe-- those naysayers have found that maybe they were wrong. They are not willing to admit it yet, but an election in Iraq was a huge success; the Palestinians holding an election, a huge success; movement toward peace between Palestine and the Israeli Government, a huge success; Syria pulling out of Lebanon, a huge success with people in the streets demonstrating for peace. Egypt is moving toward an election--not necessarily the most open election--freeing the No. 1 dissident and opposition party leader just this weekend. Democracy seems to be making progress in that part of the world, and with that we are undermining the breeding grounds of fundamentalist Islam which has targeted America because we stand for freedom around the globe, and because we stand for women's rights, because we stand for a market economy. We are making progress.

Now they want to have it both ways. They want to say Iraq was terrible, wrong, and should not have occurred, even though things are progressing there and it looks as if there is an end in sight. Then they say, Now you have to budget for 5 years from now to be in Iraq because that is what we are planning to do, when, of course, that is not what we are planning. These are one-time items, the fighting of the war in Iraq. It should not be built into the defense base. We did not build it in because 2 or 3 years from now, when we are no longer in Iraq, I don't want the defense base inflated by that number. I want it accurate according to what the Defense Department calls for relative to its needs. So we put in the $50 billion for fighting the war in Iraq.

So when the Senator from North Dakota talks about the failure to address the issue of reserving for the war in Iraq, he is referring to the President's budget, not the budget that is before us.

On the issue of Social Security, the Budget Committee doesn't address Social Security. That is by law. There will be a lot of talk about it on the floor, but we have no authority to do anything in Social Security. The idea that we should actually account for Social Security, when the Democratic Party has said they are not going to do anything on Social Security--they are going to bury their head in the sand on it and walk in lockstep on Social Security, relative to burying their heads in the sand, so that the likelihood of moving legislation through this body is significantly less because it takes 60 votes to move it through here. When you are facing that type of stonewalling on a critical issue that should be addressed, why would anybody put it in the budget when, first off, we are not supposed to address Social Security? Why would they put it in the budget when you cannot legally put it in? And even if you could, why would you put it in in the face of that type of opposition, especially when it is such a fluid situation?

On the issue of revenues hemorrhaging, again, the Senator from North Dakota referred to charts with red lines going here and there. They were the President's numbers, they were not the budget numbers. The budget has basically not taken that tack. We have talked about the 5- year window, and it is an accurate discussion of that 5-year window. What is important to note, however, from the proposals from the other side is that there is no proposal, no budget being brought forward. There is a lot of criticism about the budget but no budget being brought forward.

As the Senator from North Dakota said in the markup: Listen to our amendments to see our budget structure. Fine, we will listen to their amendments. I note that in the markup, when the Democratic Senators had the opportunity to put forward a budget, they did not. But they did put forward a lot of amendments. They put forward about 10 or 12 amendments on just about everything from worthless programs, such as ATP, to programs that have value but we have not necessarily figured out how we are going to pay for them, such as CDBG.

In the total, their amendments added up to $229.8 billion of new spending, and then their amendments added up to either $244.9 billion of new taxes or $276.9 billion of new taxes, depending on how you account for the tax on the top income people in this country. They did put forward a proposal. It was their budget, and it was your classic tax-and-spend budget, $229 billion in new spending and $244 billion or potentially $270 billion in new taxes.

Why is it important to mention that? It is important, first, because that is the definition they gave to their budget, but it is also important to understand the difference of opinion here. You cannot on one hand talk about need for fiscal responsibility when on the other hand you are proposing $229 billion of new spending. You cannot discipline the Federal Government by raising spending.

The American people are not a fundamentally undertaxed people. The American people pay a lot of taxes. The concept that you can continue to raise taxes and continue to spend money does not work. You have to discipline the spending side of the ledger.

We have done it. Granted, we have not done it as well as I would like; I

would like us to slow spending a lot more, but we have done it. We have frozen nondefense discretionary, we slowed the rate of defense discretionary to 4.5 percent, and we did not stick our little toe in the water, but we came to the water's edge and looked down at the issue of entitlement accounts, specifically Medicaid. That is what is important about this debate. This is the essence of the budget, the question of how we deal with Medicaid.

The Senator from North Dakota and I agree on this subject--we agree on a number of issues, but what we agree on is that the outyear issue in this country is entitlement spending, and at the essence of that issue is health care spending. And there are two accounts, Medicare and Medicaid. The Senator was correct, this budget does not address Medicare. Hopefully we will do it later on. But it does address the other major leg of this problem--there are three legs to this issue; it does not address Social Security--and that is Medicaid. The three legs are Medicare, Medicaid, and Social Security.

This is the essence, this is the point of this question: You cannot tax your way out of this problem. You cannot raise taxes enough on the next generation that they will ever be able to afford the present programmatic activities we have on the books in the area of retirement benefits in this country. You cannot do it. We are not as a nation going to physically be able to do it, and this chart is the essence of that point. I do not use a lot of charts because sometimes they do not show up, but in this case, I am going to use this chart.

The historic spending of the Federal Government is 20 percent. If You get much over 20 percent, you have put in a tax rate which people cannot absorb. They do not make enough money to pay for it and still have a decent lifestyle. It reduces productivity and job creation if you start taxing people at rates over 20 percent, even over 18 percent, for that matter.

The cost of Medicaid, Social Security, and Medicare, by the year 2027, 2028, will absorb 20 percent of America's spending; 20 percent of the GDP of this country will be spent on those programs. And it keeps going up. So you cannot possibly raise taxes enough.

You could confiscate the wealth of every American in the top two brackets, which may be a proposal that will come at some date from the other side of the aisle--that was a proposal before Ronald Reagan was President when the 70-percent rates were in effect--and you still could not pay for the cost of these programs. The only way you can handle this is to begin to get ahold of the rate of growth of these programs, to put in place some structure that will control the rate of growth of these programs.

Social Security is being addressed in a forum outside this budget, in a debate outside this budget, although it is going to be brought into this budget--the debate will, the substance will not. With respect to Medicare, last year we passed the Part D program and, therefore, there is a desire to let that percolate until we figure out how that shakes out before we move on that.

The last leg of the stool is Medicaid. This budget begins a minor effort in the area of Medicaid. As I said in my opening talk, there is $14 billion of restraint in growth on a $1.12 trillion spending package, reducing the rate of growth from 41 percent to 39 percent over the next 5 years, all of which can be done without impacting the quality of services and, in fact, I suspect we will run into a lot of Governors who think it can be done and improve the quality of service by giving them more flexibility in how they distribute the benefits amongst their people in the States more efficiently than being subject to a lot of strings out of Washington.

This Medicaid issue is the core question and, of course, we look forward to the Democratic response to that, whether there will be a position that Medicaid reconciliation should be knocked out of this bill and a majority on the other side votes for it, or all on the other side of the aisle, for that matter.

The Senator from North Dakota also addressed this issue of borrowing. This issue needs to be touched on briefly because it is a big issue. The value of the dollar as the currency that is basically the currency of the world is one of our great benefits as a nation. It has been weakening. The dollar has been weakening.

The practical effect of a weaker dollar, of course, is that we export more goods. There is a lag time, so we have not seen it immediately, but over time, we will see more goods exported, and also the cost of oil being $55 a barrel undermines the ability to export, the ability to offset that trade balance.

We cannot afford to have the dollar weakened too much. We cannot afford it for a lot of reasons, not the least of which is the need to have capital flowing into the United States. We want capital from around the world coming to the United States. I do not find it objectionable that the people of Japan find it safer to invest in the United States than in Japan. That says something about the strength of our economy.

I do not find it objectionable that the people of France, when they look around the world and decide where they want to put their money, do not want to put it in some company in France but want to put it in a company in America. I think that is probably a pretty good sign that we have a pretty darn strong economy and a place where people feel they can invest and invest safely and get a decent return. But their willingness to continue to do that means the dollar cannot depreciate against the franc they put in here or against the yen they put in here. It is that simple.

If you are going to invest a yen--say 1 yen is worth 50 cents, something like that; I do not know what the yen is today; it is nowhere near that--you are not going to want to invest if that dollar is going to weaken so that when you take your yen back out, you have lost money simply on the exchange rate, even though you may have made a good investment in the United States.

So having the dollar drop precipitously is a huge problem for us, but it is not a problem from a standpoint of exports, and it is not a problem right now of people willing to invest here. Those are signs of good economic values. But it is a problem if, over the long run, it causes the dollar to weaken to a point where people do not feel comfortable investing here because they feel they will lose money in the exchange rate, even though they may make a good investment.

Critical to maintaining the confidence of the international community in the dollar is, quite simply, our willingness as a Federal Government to be fiscally disciplined. They are looking at this budget process and they are saying, hold it.

If the position of the Democratic Party is that the way we get fiscal discipline is by spending an extra $229 billion over the next 5 years, that is not discipline. Fiscal discipline means one contracts--or not contracts; we never contract. At least the rate of growth of Federal spending in core accounts is slowed down.

Yes, we are fighting a war, but those are one-time expenditures and they will be over. When they are over, they will be taken out of the base. They will not even be in the base, hopefully. So we do need to put in place some mechanisms which will say to the world markets and our own financial markets, yes, the Federal Government is serious about disciplining the rate of growth.

Two of those key elements are, one, a strict cap on spending on the discretionary side, which is in this bill, 3-year caps enforceable with a 60-vote point of order, and two, a move on entitlement issues so that we restrain the growth of the entitlements through reconciliation. Both of those elements are in this bill. The time restraints are not as big as I like, but they are there. Yet, as I listen to the other side of the aisle, all I hear about from their amendments is, let us knock those restraints out, let us shoot through those restraints, let us lift that cap, let us knock out those reconciliation instructions, and let us spend more money. We will raise taxes to do it, but we are going to still spend more money. That is not disciplining the Federal Government, and it is not going to improve the value of the dollar if we do that.

So this issue of borrowing is a complex one, but it does make a statement about where we are as a matter of policy, and if we wish to improve the value of the dollar, we need to pass a budget that has fiscal restraint in it.

I yield the floor.

Mr. President, I assume the time is being allocated relative to speakers by the side for which they are speaking.

Mr. President, I will briefly comment on a couple of things the Senator from North Dakota said. I agree with his view of the charts of the senior Senator from North Dakota--or maybe he is the junior Senator; actually, I think he is the senior Senator; I never figured it out because he took a year off and came back. But, in any event, I agree with his view of the charts and I want to identify myself with the Senator's thoughts on the Senator's charts.

Independent of that, the Senator got into quite a discussion about Radio Marti and how they wanted $8 million for a new plane and so on. We are going to hear about a lot of amendments brought up on the floor which are targeted on specific discretionary spending activity the Federal Government is pursuing. They have no relevance to what is happening here in this budget debate because the budget has no specific impact on programmatic activity on the discretionary side. All we do as a Budget Committee is send to the Appropriations Committee an upper- line number, in this case $843 billion, which becomes an enforceable number.

The Appropriations Committee then takes that number unilaterally, and I assure you with virtually no input from the Budget Committee, and divides that between the different subcommittees in what is known as a 302(b) allocation.

The President sends up his proposal, which again we are not signing on. This is not the President's budget. The President does not sign this budget. We as a Congress do this budget. It is a resolution of the Congress. We have used the President's budget as an outline off of which to develop some of our positions, but the President's budget, again, is a statement of where the President would go on these programs.

The final decision on these programs is going to be made by the committee of jurisdiction, which will be the authorizing committee and the subcommittees of the Appropriations Committee. All we do as a Budget Committee is say: You, Mr. Appropriations Committee, have this amount of money to spend. You can allocate it wherever you want amongst your different programmatic activities.

So for Members to come out here and offer a resolution to increase veterans funding or to increase funding for education or to increase funding for highways, all that does as an amendment is raise the amount of spending which we do. It goes over the cap. There is no obligation under such amendments for that money to be spent where the sponsors of the amendment allege they are going to spend it. Not at all. There is no way to tie the hands of the appropriators or the authorizers, and there should not be. That is their responsibility.

The point we make as a Budget Committee is that we give a top-line number, and then we expect, and we know, that the Appropriations Committee and, to some extent, the authorizing committees, within that number will make their decisions as to how best to spend the money. You will have a fight of priorities. And that is the way it should be.

But any amendment on this floor which says I am going to increase Radio Marti or I am going to increase veterans funding is actually an amendment which is simply saying I am going to increase general spending of the Federal Government. I am going to raise that top line. I am not going to live by that cap. That cap doesn't work for me. I want it to be higher. I want to spend more money. That is what that amendment says. And it does not say that money is going to go to that program which they allege they want to spend more money.

I think this is an important point to make. I intend to make it over and over because we are going to hear amendment after amendment which is specific to some program and in which there will be no impact on that program if it were to pass.

In the Budget Committee, there were offered about 13 different amendments by the other side of the aisle, totaling about--more than 13 amendments, but the amendments that spent money totaled up to about $229 billion. They would have raised the cap $229 billion. On the other side, they would have raised taxes by $240 billion or $250 billion. I lost track of how much money they were going to tax and spend. But not one of those amendments would have had the practical effect of actually moving money into the programmatic activity that they claimed it would have gone into. It would have simply freed up money to go above the cap, except in the rare instances where those amendments were targeted on reserve funds, in which case they are treated differently. But, again, they would end up raising the cap in all those reserve fund accounts.

So it is important to understand what we are dealing with here as a budget technically, which is that we are dealing with top-line numbers on the discretionary side and the specific numbers that we give to the different authorizing committees on the reconciliation side. The rest of it is a lot of good show and good press releases, but not a heck of a lot more.

Mr. President, I want to make one point. The Senator from North Dakota continues to return to the concept that this budget does not account for the war. It is important to note that this budget accounts for the war in the year of the budget. This budget is a 2006 budget. There is $50 billion of money put into a reserve fund for the purpose of paying for the war in the 2006 budget. The President's budget didn't do that, but this budget does.

In my opening statement I explained why we decided not to go to the 2007 number or the 2008 number, both of which are very difficult numbers to reach, because this war is hopefully going to be winding down by then and we can reduce the number significantly, and why we didn't put it in the base, which would have been a mistake, because we don't want to inflate the defense budget by an amount which should be a one-time item which is the need to fight the war.

Mr. President, I suggest the absence of a quorum and ask unanimous consent that the time be equally divided.

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

Mr. President, I will briefly respond to a couple of points raised by two of the prior speakers, the Senator from Oregon and the Senator from Massachusetts, relative to the Medicaid issue. It is critical to understand this issue in the context of Medicaid spending generally and more importantly in the context of the type of reform being proposed here by the President and through the President's lead counsel and promoter on this, Governor Leavitt, the former Governor of Utah, now head of HHS.

One would think from listening to the other side, especially the Senator from Oregon and the Senator from Massachusetts, that we were creating a scorched-earth policy against all poor children in America by initiating some sort of Medicaid reform. The hyperbole is rather excessive and does not comport with the numbers or with the actual proposal.

This chart reflects the rate of growth of Medicaid over the next few years on an annualized basis. Today we spend $191 billion in Medicaid. Under the proposal being put forward, we will spend $256 billion on Medicaid in the year 2007. That compares with the projected rate of growth of Medicaid of $260 billion for Medicaid. In other words, over a 5-year period, the actual reduction in rate of growth will be almost negligible by the terms of what the Federal Government looks at relative to numbers. It is obviously a big number, but it is still not, compared to the overall number, a large number. In fact, it is about 1 percent in the reduction of the rate of growth. To cite the numbers again, over the next 5 years we will spend $1.12 trillion on Medicaid.

The President has suggested we try to find $14 billion, that we restrain that rate of growth by $14 billion, which means a 1-percent reduction in the rate of growth, which is hardly dramatic and certainly not scorched earth, to say the least.

Members can only accept that type of hyperbole if you are not willing to accept the facts of what has actually occurred. That rate of growth will therefore be a 39-percent rate of growth over this period of time compared with what would have been a 40-percent rate of growth had we not made this reduction in the rate of growth. Hardly dramatic in terms of the overall context of either the program or the Federal budget, but anyone would think it was devastating.

To make this type of an adjustment, are we going to have to impact programs for children? No. Are we going to have to impact programs for senior citizens who want to go in nursing homes and who are poor? No, we do not have to impact either of those. There are at least seven or eight elements of the Medicaid Program that, working with the Governors, we could change which would significantly improve the

delivery of service and, at the same time, reduce the rate of growth of Medicaid to come up with these numbers.

Right at the top--everyone is familiar with it--is intergovernmental transfer taxes. Basically, what has happened for the last 12 years is that States have used Medicaid money through an intergovernmental transfer tax where they essentially spend money on the nursing home, they send Federal money to the nursing home, tax the nursing home, take the money from the nursing home, leave the nursing homes with a small percentage of what they were actually paid under the Federal program, take the balance off--sometimes 90 percent of it--put it into the general funds operation of the State and then run back to the nursing home another small percentage so that in the end the State government uses 80 or 90 percent of these funds for general operation accounts, for running the State government, but not for helping people who are on the Medicaid system. That is a game that has been played.

Every Governor knew 5 years ago this process was going to come to an end. And, in fact, there was a glidepath set up under the Clinton administration because the Clinton administration had about the same frustrations with this approach as the Bush administration did, a glidepath for basically weaning the States from this process of using Medicaid money for general operations accounts.

That glidepath was supposed to end about 2 years ago, maybe 3 years ago now. It did not. It has continued to bump along this process of taking money from Medicaid to fund general operations. This administration is suggesting we put an end to it. It may not be the approach the administration takes, but if it were to take that approach, that would be $5.5 billion potentially of the $14 billion number.

One of the other approaches which might be considered would be to limit the Medicaid pharmaceutical reimbursement to the average sales price plus some percent, say 6 percent. That is a reasonable approach, basically saying you cannot pay more for pharmaceuticals than the average price being paid out there plus some percentage. That would save $5.2 billion. So you already have over $10.2 billion worth of savings if you took those two. And you don't have to take those two because there are about six more.

You can close the loophole that permits managed care organizations to avoid Medicaid rules. That is about a $1.2 billion number. That is not going to hurt anybody out there other than the folks who have been gaming the system, again, the insurers in this case, through managed care systems.

You could permit States to require additional copays. That is also a reasonable approach, quite honestly, because there are a lot of folks out there who could afford additional copays. It would be up to the States to set that policy. That would save significant amounts, probably $2, $3 billion.

You could give States greater flexibility to allow them to use SCHIP to apply their benefit structure around. This issue of flexibility could actually, in this case, end up expanding coverage to many more kids while still probably saving the States money, depending on how the States manage this. That could be a significant savings.

There are literally, as I mentioned, 7, 8, maybe 10 different proposals out there which would get you the $14 billion without having any impact at all--any impact at all--on the number of kids covered by Medicaid or the number of people going into nursing homes, other than maybe expanding the numbers, because you have given Governors more flexibility with the dollars they will presently have. And most Governors will use it more efficiently and create more money.

One other issue I think Governors would like to address and could address is this whole situation of gaming the system. A lot of people are spending down. You can go on a Web site, especially in Florida, and you can see where they will tell you how to get rid of your assets so you can become a ward of the Federal Government and your assets are passed on to somebody else who happens to be a friend or family member, which is hardly fair to the rest of the taxpayers in this country who are then going to have to take care of you because you have decided to game the system with a spend-down proposal.

So the programmatic activity is clearly available. And how is this going to be approached? Well, essentially, we have suggested this $14 billion number. To put it in context, here is a chart that shows the $1.1 trillion that is going to be spent over the next 5 years. Here is the $14 billion. You can't see it on the chart because it is a very small line, but that number would be what we would ask the Finance Committee to reduce in the rate of growth of spending in the Federal Medicaid account. So they drop from 40 percent to 39 percent over the next 5 years.

To reach that number, how are they going to do it? I don't know how they are going to do it. But in meeting with Governors and in meeting with Governor Leavitt, it became very clear that there is, I believe, a willingness to develop a consensus as to how to approach this issue, and there is a genuine desire to do it. There is a genuine desire to accomplish this.

I suspect that before the Finance Committee marks up--and we actually put some flexibility on timing here relative to reconciliation so the Finance Committee will have time to work with the Governors--there will be a consensus position amongst many of the Governors, hopefully bipartisan--I suspect it might be bipartisan--as to how to set up this programmatic activity necessary to restrain the rate of growth in Medicaid and still deliver more services to more kids and more elderly who are moving into nursing homes. This will mean that although this bill states a number, it does not set the policy, but the policy will instead be set working in conjunction with the Governors, with Governor Leavitt leading the effort, and then working with the Finance Committee.

But why is the number so important? Why is it so important to have a reconciliation instruction rather than virtually saying to the Finance Committee, go ahead, you take care of this, you can do it on your own? Well, it is so important because without a number to drive the process, without a reconciliation instruction driving the process, nothing is going to happen. That is the nature of the beast. That is what happens. If we do not have some forcing mechanism, some catalyst to get everybody in a room together to say, well, we better do something because we have to act, nothing is going to happen.

Equally important, obviously, anything such as Medicaid reform is going to be very hard to get 60 votes on because there are a lot of folks around here who tend to be scared of their own shadow and don't want to vote on something that is going to put them in a position where they would actually have to make a reduction in the rate of growth of spending of anything, especially Medicaid. So it is critical to get to where we need to go. It will first be the catalyst which energizes the Governors coming together--they already are coming together, but it actually energizes an agreement, I believe. And it will give the Finance Committee the necessary guidance.

Why is this so important? Well, I return to the chart that is the essence of the argument around this debate of this budget, which is, what are we going to do about the outyear crises which we are facing as a nation? What are we going to do about the fact that our generation, when it retires, is going to have placed such a huge demand on our children that they simply are not going to be able to afford the decent lifestyle we have?

This chart puts it in stark terms. The Senator from North Dakota has a lot of charts that appear to be stark, but this is a truly stark chart because it makes it very clear that these three elements of the Federal Government--Medicaid, Medicare, and Social Security, the three retirement elements--will be unaffordable and will make the Federal Government inoperable within about 20 years from now unless we start to address it.

I wish Medicare were on the table. It is not. And maybe next year we can do that. But we are transitioning into a new Medicare system with the Part D drug program and people did not want to take on that issue right at this time. And I hope Social Security will be discussed at some point by the Senate and we will act on that. But that cannot be done by the budget because the budget does not have that authority.

That leaves us one more option, one place where we can actually make a conscientious effort to try to get something going in the area of addressing the outyear costs of this Nation, and that is Medicaid. That is why every time somebody comes to this floor and talks about how this Medicaid number is inappropriate and is going to have a dastardly effect on some poor and suffering population, I am going to rise and point out that is a lot of baloney, that the simple fact is the numbers point out just the opposite.

This is a very small restraint in the rate of growth of one of the three most critical programs we have in the area of entitlements. All the restraint which is proposed in this reconciliation instruction can be accomplished by addressing the provider groups and addressing better management of the system and addressing the fact that States have been gaming the system.

Amendment No. 142

Mr. President, I have a unanimous consent request. I send a technical amendment to the desk. This has been agreed to on both sides. I ask that the amendment be agreed to by unanimous consent.

Mr. President, I have listened with interest this morning to a fascinating debate and discussion about this country's budget priorities.

My colleague from North Dakota, Senator Conrad, knows of a man I have spoken about previously on the Senate floor. His name is John Smith. John Smith is called the Flying Farmer from Makoti, ND. What John Smith does is he gets these old cars and he goes to county fairs. He builds a ramp and jumps three or four other cars. He is kind of a daredevil. He works in a machine shop in Makoti, ND, and then he bills himself as the Flying Farmer from Makoti. During the summer, he goes to all these county fairs and does daredevil stunts.

The Flying Farmer, John Smith, is actually in the Guinness Book of World Records, and here is what his distinction is:

He drove a car 500 miles in reverse, averaging 36 miles an hour. Let me say that again. He is in the Guinness Book of World Records for driving a car 500 miles in reverse, averaging 36 miles an hour. That record might well be supplanted by this budget resolution, talking about going in reverse consistently for a long period of time. He may have nothing over the budget resolution that came out of this committee. This moves this country backward. In my judgment, it does nothing to address the central issues facing us in fiscal policy. I believe my colleague described the accurate numbers. If we go to page 5, for example, what we find is this: Federal debt subject to limit. Line 6 says, in fiscal year 2005, that Federal debt subject to limit is going to be $7.9 trillion, and then at the end of the fifth year of the budget, it is going to be $11.1 trillion. So this budget resolution calls for a dramatic increase in the Federal debt. Yet we have people coming out saying look at this budget resolution, what a responsible thing this is. It moves us in exactly the right direction.

That is nonsense. This is what it does. On page 5 it says we are going to dramatically increase Federal indebtedness from $7.9 trillion to $11.1 trillion over 5 years.

That is one thing. And this increase, incidentally, games the system because it doesn't include money for the war in Iraq and Afghanistan. It doesn't have money for many other things. But even with what it does have money for, on page 5, line 11, it tells you the truth of the matter. The truth is, this budget document calls for a dramatic increase in Federal indebtedness over the 5 years. Does that mean we are going in the right direction, or does that mean we are going in reverse? We know the answer to that.

The debate about the budget is more than just a debate about numbers. It is a debate also about values. What does this country stand for? What are our choices and priorities? What is our value system?

One hundred years from now everyone in this Chamber will be dead. Everyone now serving in the Senate will be dead 100 years from now. But the one lasting impression of who we were, what we stood for, what we thought was important, what our value system was, will be found in a budget document that says: here is what they decided to invest in. Here is what they spent money on. Here is what represented their value system. It is all historians will have to evaluate who we were and what did we decide was important in our lifetime.

This budget submission has some budget cuts. Let me describe what they are. We are spending less money on veterans than we need to spend to keep the current veterans programs funded. This budget includes a cut in veterans programs. The same is true in education, not enough money for current funding to continue, and the same for law enforcement and agriculture.

You can take a look at these and say, ``veterans,'' that's just a word. It is a lot more than a word. It is folks who

put on this country's uniform and went anywhere in the world they were asked to go and fought for this country.

I told my colleagues previously about a wonderful veteran. I pinned a medal on his pajama top one Sunday morning in a veterans hospital. He was an American Indian who fought in Africa, fought in Normandy and across Europe, came back and lived on the Indian reservation. He never had much, had a tough life.

His sister said: Can you get my brother his medals? He never got his medals from the World War II service. So I got his medals for him. He was very sick with lung cancer. At the VA hospital one Sunday we cranked his bed up to a seating position, and I pinned the medals on Edmund Young Eagle's pajama top 7 days before he died of lung cancer. And Edmund Young Eagle said, ``This is one of the proudest days of my life,'' because he served his country, and his country was saying thank you for what he did for America.

He didn't have very much in his life, but he was proud in his service. We have veterans coming back today, every day, who served in Iraq. We have World War II veterans who are reaching that age now where they need substantial health care help. At this very time we discover there is not enough money for veterans health care.

I asked the Secretary of Defense the other day, What is the difference between a soldier who is on active duty and a soldier who is now off active duty, trying to cope with a leg that is gone or a shrapnel wound in the head? What is the difference between those soldiers? They both fought for this country. There ought to be no difference. They both represent the cost of war: the cost of a soldier on active duty, or the cost of health care for a soldier who comes back and is now part of the health care system and needs some assistance.

The question is, What is our value system when we say as a country, veterans health care, that is not quite so important? That sort of gets short shrift. It takes second place to, let's say, a tax cut. In fact, this budget resolution says we need tax cuts more than we need to fully fund health care for veterans. What kind of a value system is that? Whose priorities are those?

Education--we all understand the value of education. This is more than spending. This is an investment. Our future is what our kids will be and what our kids allow America to become. So when we invest in education we invest in America's future. When we decide there are things more important than education, such as tax cuts for wealthy Americans, we shortchange our country's future. Yet we are told there is not enough money to fully fund veterans health care. There is not enough money to fully fund education.

Law enforcement: we know the scourge of methamphetamine addiction and production in rural areas of the country. This budget cuts Byrne grants, and the other programs that are so important for local law enforcement officials to wage this battle and make this fight. But we are told in this budget resolution we don't have enough money for that.

And family farming--these are America's economic all-stars. They are the ones who get up in the morning under that yard light that was lit all night long over that farm family. They say: We are going to work today to try to grow some food, make that soil produce a crop and then sell that crop at the elevator to feed a hungry world.

We are told we now have to change the rules on the farm program. That which we promised farmers, for an ability to get over periods when we have lower prices or tough times, we have to revoke that promise.

So these are the priorities in this budget resolution. We can't afford health care for veterans, education, law enforcement, agriculture.

Let's look at what they can afford. They can afford tax cuts. For example, this budget resolution allows for the permanent repeal of the so-called death tax. There is no death tax. I don't know how you permanently repeal something that doesn't exist. My colleague, the former Senator Gramm, and I had this debate on the floor before he left. I said: God forbid you die, but when you do your wife will own everything you own. There will be no death tax. There is a 100-percent spousal exemption. So there is no death tax.

However, there is a tax on inherited wealth in this country. And the majority party is intent on relieving this burden on the largest estates in this country. We have, by the way, one-half of the world's billionaires living in our country. The major party is so intent on relieving the tax burden on those multibillion-dollar estates, they are willing to make that a higher priority than funding veterans health care or funding education or funding law enforcement or funding family farmers. Permanently repealing the estate tax is a higher priority for them than doing all these things.

They do have a problem with the death tax, as they call it. They have created a Byzantine system which begins to phase out the tax on inherited wealth until the year 2010. Then in 2011, this tax on inherited wealth, or estate tax, is fully restored. So in 2010 tax on inherited wealth is completely repealed. Then in 2011 it is restored. Of course, no one understands that. It is one of the goofiest things ever done in this Chamber, but nonetheless it was done. So now they say this budget resolution allows for the permanent repeal of the estate tax.

This resolution also allows for the extension of the lower tax rates on capital gains and dividends. This is an interesting issue as well. It is always a very popular subject around here, if you can reduce the tax on capital gains and other investment income. The President and the majority party would like to have no tax on capital gains. In fact, they would like to tax work and exempt all investment from tax.

Here is what Warren Buffet, the world's second richest man, said about that issue in an op-ed piece that was published in the Washington Post some while ago. He described it in terms of his receptionist working in his office. Mr. Buffet said that he, the world's second richest man, and his receptionist paid about the same tax rate of 30 percent. She pays that high a rate because she pays a payroll tax on all of her earnings. He is one of the wealthiest people in the world. He pays a mix of different taxes on his salary, capital gains and so on. They each end up paying about a 30 percent tax rate, the world's second richest man and the receptionist who works in his office.

If the majority party and the President had their way, and we had a tax system that taxes work and exempts dividends, Mr. Buffett said: At that point my receptionist will be paying a tax rate that is 10 times higher than my tax rate. Warren Buffett said: My tax rate will be 3 percent, and my receptionist's tax rate will be 30 percent. The world's second richest man will pay a 3-percent tax rate, and the receptionist in his office will pay a 30-percent tax rate.

It is almost everything that is wrong with the philosophy of what is in this budget. I have told my colleagues often about a line from an old song by Bob Wills and the Texas Playboys in the 1930s: The little bee sucks the blossom, and the big bee gets the honey. The little guy picks the cotton, and the big guy gets the money.

It is right in the middle of this budget resolution: unburden the big interests and burden the small interests. Give the big guy a break. Give the big guy a tax cut, and lay it on the shoulders of working Americans.

In addition to the budget cuts I have just described, there are other things that are omitted in this budget. For example, there is not sufficient money here for Iraq and Afghanistan. Despite the fact that Congress asked for that to be included, we now have before this Senate an $82 billion emergency request for Iraq and Afghanistan. We knew Iraq was going to cost money. We are spending about $5 billion a month for ongoing efforts in those two countries. I was here a year ago and said: Look, this should be part of the budget. Let's at least have some reasonable estimate of how much it will cost. Guess what they put in the budget last year. Zero. Zero. So now we have an $82 billion emergency request before the Senate.

In the budget for the next year, what did the President have included? Zero. No money. Is this a budget game? And this gets paid how? And the Committee mark includes just a token amount. Senator Conrad talks about an amendment offered in the committee that

says, maybe we ought to pay for this. If we are going to go to war, maybe not just the soldiers should sacrifice; maybe the American people should be behind them and pay for the costs of it.

No. God forbid in this Chamber we ask anyone to pay for it. In fact, we will not even put a realistic amount of money in the resolution, let alone ask anyone to pay for it. We will have some amendments dealing with that subject.

The President does ask in his budget and this proposal assumes some spending increases. For example, we need to build, they say, a new nuclear weapons earth-penetrating bunker buster. We did not have enough nuclear weapons? There are roughly 30,000 nuclear weapons in the world. We do not have enough, someone says. We need to build a new designer nuclear weapon to penetrate bunkers. We need a penetrating bunker buster nuclear weapon. What a foolish thing to be talking about. Our goal ought to be to stop the spread of nuclear weapons, not talking about building new nuclear weapons. Yet that is exactly what this budget does. We do not have enough money for veterans health care, but we have enough money to build new nuclear weapons, nuclear weapons we do not need with money we do not have.

Of course, there are other areas of spending. Sometimes you can see the broader picture by taking a look at some of the smaller issues. There is one baffling to me. The administration proposes, and this budget would fund, a doubling of the amount of money to broadcast television signals to Cuba in something called Television Marti. It is ours. We create television broadcasts and signals, and we send those signals to Cuba to tell the Cuban people what democracy and freedom are really like. Of course, they hear that every day on Miami radio stations but, nonetheless, we are telling the Cuban people with television signals how great it is in our country.

There is one problem with that. The Cuban people cannot see the signals. The signals are broadcast from 3 a.m. to 8 a.m., and Castro jams the signals. So we have something called Fat Albert, which is an aerostat balloon. At 20,000 feet on a big tether, it broadcasts television signals to Cuba that the Cubans cannot see, and we will spend $10 million to do that. And guess what. The President--and this budget--says that is not enough, let's double the funding. If the Cuban people cannot see the signals now, let's double the funding.

It is not as if this budget brings some Spartan approach to spending. There are some areas in the budget where we increase spending at the least opportune time, especially this. We might as well dig a hole and throw money in the hole and cover it up. Just throw money down a rathole. It does not make any sense at all, but they want to double the funding. Do you know why? Instead of using Fat Albert and an aerostat balloon that got away from them once and they had to chase it down into the Everglades, now they want to buy an $8 million airplane so they can broadcast signals that Castro will jam so the American people will feel better, somehow, for having sent signals to Cuba that the Cuban people cannot see. Double the funding. We cannot afford veterans health care, but, boy, there is no limit on what we want to do in building new nuclear weapons or building broadcast devices to the Cuban people that the Cuban people can never see.

When we talk about spending, maybe we ought to talk about some of the small things that represent the message about larger issues and ask the question: Why is it you want to spend so much money on all the wrong things?

My colleague, Senator Conrad, talked this morning about the long term difficulty we have, and it is serious. I notice in the Newsweek Magazine this week ``The Incredible Shrinking Dollar'' is the cover story. And then inside, on page 38:

. . . greenback's fall is stoking fears of a global crisis.

Behind the slide, a world economy wildly out of balance.

It says that if you have been following closely, you know that the dollar has been declining steadily against many foreign currencies. From recent highs, reached in mid 2001 or early 2002, the dollar has dropped 38 percent against the Euro, 23 percent against the yen, and 25 percent against the Canadian dollar. And then it goes on to explain at great length what the prospect could be:

Worst case scenario, foreign central banks and investors

might lose confidence in their dollar holdings, rush to sell

American stocks and bonds, consumer and business confidence

would drop, and a recession in the United States and abroad

might follow.

This is serious.

This year, just this year, we have a budget and a trade deficit that far exceed $1 trillion. Far exceed $1 trillion. The combined trade deficit is around $620 or $630 billion, but the merchandise trade deficit is even higher, and you add to that the budget deficit, we have a country that is seriously out of balance with respect to its fiscal policies and its trade policies. You cannot hide it. The rest of the world knows it.

It is not that the proposed resolution does not attempt to hide it. This budget, incidentally, on page 5 and 4, brings us a 5-year projection. Why? Why only 5 years? Do you know why? Because they want to tell us things are getting better when they know, and we know, if you go out 10 years, which is what we have always looked at before, in 10 years, this thing just blows out of sight--huge deficits, huge increases in Federal debt. The fact is, because they hide it and don't print it doesn't mean it doesn't exist. My colleague, Senator Conrad, described at great length this morning the danger of that.

Let me talk about a couple of other issues. The Federal Reserve sits down in this concrete bunker downtown with about $11.1 billion in accrued surplus account.

Let me say that again. The Federal Reserve system now has $11.1 billion squirreled away in a rainy day fund, in case they might suffer a loss. It is pretty hard to see how the Federal agency that creates money is ever going to lose money, but they have squirreled away about $11 billion just in case they do. This Congress has an obligation to say to the Fed, enough of this. You don't need $11.1 billion squirreled away somewhere in the vault.

By the way, I won't go into Alan Greenspan at great length except to say he has been one of the great enablers for the current fiscal policy being so widely out of balance. He is the man who stood up in 2001 at the time many of us were cautioning--I know Senator Conrad was on the Senate floor--saying you can't see 10 years when there was a prediction of 10 years of robust budget surpluses, and saying maybe we ought to be conservative. Maybe you can't see 10 years, but let us at least slow down a bit. The majority said no. President Bush said, no, we want big tax cuts right now locked in place for the long term. Mr. Greenspan, at that propitious moment, weighed in the only way he could. He said: My greatest concern is we are going to pay down the Federal debt too fast.

They need to change the air-vac system in his building. He says: My problem is I worry they are going to pay down the debt too fast. Maybe he ought to be asked now is that his problem? Because now from the largest surpluses in the history of this country we have record deficits and debt on a yearly basis. And I wonder what he is worried about at the moment. Last week he was the enabler, once again. He came back to Capitol Hill and seemed to say: I kind of like these privatized accounts in Social Security.

He didn't highlight the point, of course, that it is going to cost trillions of dollars of additional indebtedness.

I just come back to say that they have $11.1 billion squirreled away.

I say to my colleagues, Senator Conrad and Senator Gregg, maybe we ought to take a look at that. I hope to do so by amendment.

Finally, I am going to offer an amendment during the deliberation on the budget that asks us to vote one more time on an issue that ought to be simple but one we can't seem to get passed through the Senate. Under current law, we tell U.S. companies if you close your American manufacturing plants, fire all the workers and move your production to China, Sri Lanka, or Bangladesh, we will give you a big tax cut.

I previously offered on the floor of the Senate an amendment that is very simple. It says if a company shuts down its American manufacturing plant and moves its manufacturing abroad and then sells those now foreign-made products back into America,

you don't get what is called the deferral tax break. It is the most perverse tax break in our entire Tax Code.

If we can't take the first baby step to shut down the tax break that rewards companies for shipping U.S. jobs overseas, you can't do anything that is worthy in this Chamber, in my judgment. So we will vote on that amendment.

The last time we voted on it, 60 Senators said, no, we want to keep the tax break that companies get when they ship U.S. jobs overseas. We believe that is a worthy thing to do.

I wonder if now, nearly a year later, they still think it is a worthy thing to do.

I might observe that none of them in dark blue suits have been among the 2.7 million people who have lost their manufacturing jobs. No one in this Chamber has lost their job because of outsourcing. Maybe that is why there is not quite the urgency in this Chamber that there ought to be. If we can't take the first baby step to shut down this perverse tax break rewarding companies that ship American jobs overseas for the sole purpose of producing goods to be sent back into the American marketplace, then we ought to hang our heads.

I think the question for this Congress is, Where is leadership?

I have described previously as well the John Adams book written by McCullough in which John Adams would write back to Abigail as he was traveling representing our country in England and France. He would plaintively write to Abigail: Where will the leadership come from to help put this new country of ours together? Where would the leadership emerge? Who will be the leaders to put together this new country?

Then, in the next letter, he would plaintively say: There is only us to provide leadership. There is Thomas Jefferson, there is George Washington, there is Ben Franklin, there is Mason, and there is Madison. There is only us.

Every generation of Americans ask the same questions. Who will be the leaders to help steer this country toward a better future and toward expanded opportunities? Who will be those leaders?

I regret that this budget resolution provides no leadership at all on the issues critical to our future.

I admit that both sides now talk about the long-term problems we have. What is going on is unsustainable. Both sides have talked about that.

But the majority that controls the White House, controls the House and controls the Senate continues to try to hide the seriousness of that by bringing us budgets like this and then saying things are really looking up. Things are getting better. They are not.

I ask anyone who wishes to know to go to page 5 and line 11. That is all you need to know. You don't need to know 10 numbers, or 5 numbers-- just 1. In the year 2010, we will have a Federal debt of $11.1 trillion. That is the only number you need to know. Is that number increasing or decreasing? It is increasing rapidly. You know the number, you know the direction, and then draw your own conclusion. Are we moving in the right direction, or do we need to make a U-turn? Are we really a people who have decided that our highest priority is to protect from taxation the assets of those who have made billions of dollars and who are now subject to an estate tax, a tax on inherited wealth? Is that a higher priority than helping veterans who need health care? Is that a higher priority than helping little kids who are entering our classroom doors, than all of the other things we are talking about? Do we really believe that?

That is exactly what this budget says.

This country will overcome this period. We will at some point have a fiscal policy that is thoughtful, in balance, and moving this country in the right direction. But it is not this fiscal policy.

My colleague, Senator Conrad, is prone to use a lot of charts. I have kidded him saying he is the only Member of the Senate who finds charts erotic. But charts are very useful to describe what is happening.

I think the chart that he used earlier today which is so important is this chart. It shows the burden of indebtedness that the American people will have to assume, unless we change course. I admit changing course is not easy. But we don't have many choices left.

About 4 years ago, we put in place a fiscal policy that I did not vote. I thought it was the wrong approach because I worried that things would happen that we didn't anticipate; and they did--a recession, an attack on 9/11, a terrorist attack, a war in Afghanistan, and a war in Iraq. And sure enough, those budget surpluses turned to budget deficits. But that didn't seem to deter anybody on either side. They acted as if none of that happened, except to the extent they want to extract some mechanism to deal with it. They want to take it out of veterans, kids, and those kinds of priorities.

I think, again, when the question is asked by this generation of Americans, Where will the leadership come from, it is not from the White House at this point, and it is not from those who control the House and the Senate.

My hope is that in the coming days we have the opportunity to cast votes on these issues. We can consider a series of amendments, have debate, vote, and begin to turn some of this around and begin to see if we can't create an economy and create economic opportunity that will allow the rest of the world to look at this Congress and say they did something that finally recognized the dilemma we are in, and finally made a U-turn to move in the right direction.

My colleague, the Senator from New Hampshire, has said that raising taxes will not solve any problems. I don't know of anybody who is talking about raising a lot of taxes, but I am talking about choices. Deciding that protecting the wealthiest Americans from a tax on inherited wealth is more important than dealing with veterans who desperately need health care is a bad choice. I think it is a bad priority. It is not about raising taxes. We have every right to revisit tax cuts that were ill-advised.

I would like to have a longer debate, and I shall not do it now. But I would like to have a longer debate about the question of, Why do we decide work has less value than investment? Why is it that this majority decides they want to tax work and exempt investment? Is work less worthy? Why is it they want Warren Buffett to pay a tax that is one-tenth the tax paid by the receptionist in his outer office? That is by his account. He does not agree with them, by the way. He does not think they ought to do that. But that is exactly what they want to do.

It is about choices. It is about priorities. My hope is, at the end of the day, with amendments--I described a couple--we will be able to dramatically improve this budget document.

Mr. President, I yield the floor.

Mr. President, I yield myself one-half-hour.

Mr. President, Americans are a strong and generous people, but this is a weak and selfish budget. It gives more to those who already have the most and further deprives those who have the least. It gives the rich and powerful what they want while denying our families, our communities, our Nation what they need.

Our national budget should reflect the generosity of spirit and the commitment to fairness and opportunity that characterizes the American people. Instead, this budget lacks the courage of American convictions. It betrays our most fundamental beliefs as a nation. As religious leaders of many faiths wrote Congress, this budget turns its back on our Nation's oldest and most enduring values of compassion, justice, and honesty. It demands an unequal sacrifice and so is unworthy of who we are as children of God.

As Americans, we are known for our rugged individualism. We are stirred, even today, by the heroic images of pioneers pushing westward to build new lives for themselves and their families. But we are also good neighbors. The settlers traveled to the West in wagon trains because they knew that the survival of their families depended on strong communities working together for the common good. They lived by the Golden Rule, not only as a moral mandate but as a necessity. That is our American heritage, neighbor helping neighbor, all of us contributing to our communities and to our Nation to make us stronger.

But this budget turns its back on those values. It assumes that Americans are selfish, that they prefer more tax breaks for wealthy individuals than greater opportunity for everyone. It assumes that Americans are selfish, by cutting back on access to higher education and training instead of enhancing our strength and competitiveness so that more of our citizens can fulfill the American dream in the global economy. It assumes that Americans are selfish, by increasing investments in defense without also increasing our commitment to reducing child poverty in America. It assumes that Americans are selfish, by borrowing billions more each year from Social Security to cover President Bush's distorted priorities instead of paying back the trillions of dollars that the White House has already taken from Social Security to pay for its tax breaks for the wealthy and the corporations.

It assumes that Americans are selfish by providing $70 billion more in tax breaks, primarily benefitting the wealthiest taxpayers, while cutting billions from Medicaid that would go to provide health care for our poorest citizens. The tax cuts on dividend and capital gains income provided for in this budget will give billionaires an average annual tax break of over $35,000 while families with incomes under $50,000 will receive only $6 per year in tax savings. To assure continuing opportunity for our citizens, we must strengthen our commitment to education and health care. Without these commitments we weaken the American middle class, and the challenge of poverty will continue to grow.

In just the past 4 years, middle-class families have seen their health insurance premiums jump 59 percent, college tuition rising some 35 percent, housing going up some 33 percent, and gasoline up 22 percent.

At the same time, their jobs, the middle class jobs, are being shipped overseas and the new jobs created in today's economy make it harder and harder to provide for their families and plan for their future. The newer jobs provide lower wages, less health care, and fewer opportunities to save for a good retirement.

The answer to this challenge is not to lower our wages but to raise our skills. We must invest more in education and job training.

Just a week ago we had the debate on the floor of the United States Senate

about increasing the minimum wage. We thank all of our colleagues on this side of the aisle for voting for it, and thank the handful of those on the other side voting for an increase in the minimum wage. Britain has now raised its minimum wage to $9.75 an hour, and it will be $10.29 an hour in the year 2006. It has seen a decline in unemployment, a steadying of its inflation rate, and has moved over a million children out of poverty.

Nonetheless, we refuse to give hard-working Americans an increase in their minimum wage at a time when those who have opposed our minimum wage are talking about more tax breaks for the wealthiest individuals in the dividend tax rate they are going to propose in this budget. A week hasn't even gone by since they said no to those interested in a raise in the minimum wage, and it is yes to those who are going to get a nice tax break.

When it comes to equipping our citizens for job opportunities for the future, this budget actually cuts back on our national commitment to education for the first time in a decade. The cuts in education over the next 5 years will total over $40 billion.

Look at this chart, ``The Proposed Education and Training Budget.'' ``Cumulative Cut of $40 Billion Over the Next 5 Years.''

The United States responded to the challenge of the Industrial Revolution by developing our high schools. Then came World War II, and what was our response? We had the GI bill. What the figures show is that every dollar that was invested in those veterans of the greatest generation was returned sevenfold into the Federal Treasury.

Then we were faced with the sputniks in 1957. What did we do, cut back on education? Cut back on training? Absolutely not. We went from about 2 cents out of our Federal dollar to 5 cents out of our Federal dollar. Now we are in a downward spiral in terms of supporting education over the period of the next 5 years. This is cumulative some $40 billion. We ought to be investing in our young people, providing them with continuing education and providing them with continuing skills. This budget cuts back on education and cuts back on the skills.

This chart reflects this budget that is before the Senate. They are advocating increased tax breaks for wealthy individuals, and this chart indicates where those tax breaks are going to come from.

I have shown in the past these budget cuts in a favorite proposal, No Child Left Behind. We will hear from the other side: We have increased it 20, 30, 40 percent over a period of years. But these are the number of children who are going to be left behind in the Bush budget that is before us at the present time. Don't ask those of us who are opposed to this budget, who think it doesn't reflect the best of our national priorities. Go and ask the head master at your local school. Go ask your school board. Go ask your teachers. Go visit the classrooms. Find the overcrowded classrooms. Ask your children if they are being challenged, whether they are getting the supplementary services? They will tell you they are not.

It is amazing. When we passed the No Child Left Behind, we thought included in that legislation was that at the end of 12 years every child in America was supposed to be proficient. That is in the legislation. Every child in America was supposed to be proficient. How are we going to have every child in America proficient when you are leaving out almost half them a year when we are supposed to have the No Child Left Behind?

When we passed Social Security, we didn't say we are going to leave out 20 or 30 percent; we said all seniors are going to be eligible. When we passed Medicare, we didn't say we are going to just do it for 80 percent or 70 percent; we said it is all Americans.

I liken this to if President Kennedy said we are going to go to the Moon and we went to the Moon and left the astronauts there. Included in going to the Moon was getting the astronauts back down. Not in the No Child Left Behind. We are leaving out all of these children. This budget continues it.

Again, money isn't the only answer in education, but it is a pretty clear reflection of what a Nation's priorities are. In this legislation, we are cutting back on student loans. Tiny increases to the Pell grants will mean college is still less affordable next year for 673,000 young Americans. Cuts are out there in the Gear-Up Program, in the TRIO Program, Upward Bound Programs--initiatives that will open up college doors for millions of young Americans--cuts in vocational education, cuts in adult education. Cuts in job training means that millions of our citizens will be unable to obtain the jobs they need to provide for their families and their communities.

Just look at what is happening now in America. This is the national average of what is happening in our schools across the country. Out of every 100 ninth graders, 68 of these 100 will graduate from high school. Out of every 100 ninth graders, 40 of them will enroll in college, and 27 will stay enrolled as a sophomore. Out of the 100 ninth graders, 18 will graduate on time. This is what is happening in the United States of America with K-12.

We don't say we have all the answers, but we have some. We know you have to have a well-trained teacher in the classroom. We know you have to have a small enough classroom so the teacher can teach the children. You know you have to have parental involvement. You know you have to be able to test children to find out why they are falling a little bit behind so you can get them supplementary services so they can catch up. We know what needs to be done. You have to give some of those limited English speaking students some additional help. You have to be sensitive to the needs of special needs children.

We know what needs to be done, but this is what is happening now in the United States of America. What does this budget do about it? Virtually nothing. It cuts back on further support. The Bingaman amendment addresses this issue and provides some help and relief in terms of the children.

We will come back to the issues on education, but I want to say another word about what this budget does with regard to Medicaid, which is a lifeline for 50 million poor women, children, elderly, and the disabled. In fact, a third of all newborns in America and their mothers rely on Medicaid for care.

The Republican Party and the Bush administration say they are for a culture of life, but this action makes that an empty claim. Cutting Medicaid is one of the most damaging actions to a culture of life any administration could take. This budget fails to reduce by a single person the 45 million Americans who are without health insurance today. The number is growing when it should be a high priority for Congress and the administration to ensure that no American goes without adequate health care.

I don't know about the rest of our colleagues, but when I travel around my State of Massachusetts, people say: What in the world are you doing in the Senate in terms of health care, coverage, and cost, and the cost of prescription drugs? When are you going to deal with it? You are taking care of the large corporate interests with your class action bill, and you have taken care of the credit card companies with the bankruptcy bill. Now you are considering a budget that is cutting back on the education and cutting back on the lifeline to many of the neediest people in our society and cutting back on Medicaid. It cuts back on children, it cuts back on the disabled, and it cuts back on the disabled who have been wounded, actually, in Iraq. They will depend upon the Medicaid Program because of their disability, and this program is being cut back. Still we see these reductions.

This budget freezes the fund for health research at the National Institutes of Health. We are in the period of a life science century with what we have seen in terms of mapping of the human genome, the sequencing of the gene, all of the possibilities that are out there at the present time, unlimited possibilities. If we saw the potential cure for Alzheimer's, we would empty two-thirds of the nursing home beds in my State of Massachusetts. We are at the brink of that. What does this budget do? It cuts back on those kinds of possibilities. It makes no sense whatsoever.

It cuts back on our commitment for disease prevention, for controlling the flu, the epidemics, minority health care, for children's hospitals. We are training the pediatricians--this budget

cuts back in that support. It cuts back in rural hospitals, the training for nursing, and the bioterrorism preparedness.

We worked in the area of bioterror preparedness to get our homeland security--to be able to detect it. We need to get support for the public health services and contain it. That is where you need the hospitals and the teams to be able to do it. You have to build up that infrastructure in order to be able to retain it, and you have to be able to treat the people affected by it. What we have seen in this legislation is the reduction in terms of those extremely important elements in our battle to deal with bioterrorism.

I thank the budget chair and the ranking members for including a provision in this reserve fund for using information technology that may be very helpful to us in terms of getting a handle on the issue of health care and health care costs, and also for the work that was done with regard to the pension system which we are dealing with at the present time.

I believe this budget fails the basic test of fairness and equity for the American people. It certainly does with regard to the education programs in this country.

I want to add a word of strong support for the Bingaman amendment which we will be considering very shortly, particularly the aspects of the Bingaman amendment that relate to school dropouts.

Dropout prevention is such an incredibly important program. We have areas in the country where we have as high as 30 or 40 percent in dropouts. That program has effectively been eliminated. The champion for that dropout prevention program is the Senator from New Mexico. I admire his perseverance and his commitment. Where we have dropout prevention programs, it makes a great deal of difference in keeping children in school rather than having them drop out into a life that lacks meaning and purpose. He has made this effort not only in the dropout program but also in the Gear-Up and in the TRIO Program.

Let me mention very quickly what the Gear-Up Program really says.

About 82 or 83 percent of our children in Boston are participating in the Gear-Up Program, which takes a whole class of children of the cities, and ties them, in effect, to our schools and our universities and our colleges of higher learning. We bring the colleges and the students together by the classes to provide help and assistance to the class itself, so the class has a sense that it is moving along and moving along together. It has had an extremely important and significant result. It has had a very important impact and result on the children that are part of the whole class that is moving up, to think that there are other children or young people and students who are in colleges that will work with them, spend time, volunteer, work with them on whatever their particular needs are.

And it has had a dramatic impact on children in college who have benefited, who have a sense of what it means to get back to these students.

Nonetheless, we see those programs--the Gear-Up Program and the TRIO Program--heavily undermined. The Bingaman amendment provides extremely important help and assistance.

Finally, on the education. We passed last week, under the excellent direction of our friend and colleague Senator Enzi, the career and technical program Perkins legislation, which had such extraordinary support in providing skills to individuals. The graduates in my State, even though we have one of the highest unemployment rates of any of the industrial States, are in excess of 90 percent. It has been that way for a very significant period of time. Better than 90 percent are passing the general academic tests. These young people are getting good academic training and are acquiring skills which are necessary in the new economy.

What are we saying to them? After we have a vote in the Senate of 99 to 0--not a single vote in opposition--we are effectively undermining that program in a dramatic way. The Bingaman amendment addressed that.

Before this budget debate is completed, I intend to offer an amendment that puts this Nation on the road and on the pathway of eliminating child poverty in this Nation. Let me show where we are with child poverty. The United States has the highest child poverty rate in the industrial world at the present time. It has grown over the last 3 years to an absolutely unacceptable rate. Over the last 3 years, the number of children now in poverty has grown by 1.3 million. This is completely unacceptable for this Nation.

This chart shows one in five American children now live in poverty. It is particularly endemic in terms of the national average now at 18 percent; 30 percent Latino, 34 percent for African Americans.

The children are much more likely to live in poverty than adults or the elderly. Adults 18 to 61, 11 percent; seniors 65 and older, 10 percent; children 18 years and under is 18 percent. This is a matter of national urgency. It is a matter of national disgrace.

I intend to offer an amendment for a 1-percent surtax on the taxes being paid by millionaires to be designated to battle the problems of child poverty in this Nation, with the goal of cutting it in half in the next 10 years. We will have an opportunity to do that.

I thank Members on our side, the Senator from North Dakota and our colleagues, for raising many of the issues on health and education in the course of the discussion and debate. Hopefully, some of these amendments will be favorably considered. If a budget is to reflect a nation's priorities, this budget needs a great deal of strengthening. I look forward to the debate and, hopefully, to the acceptance of some of these amendments.

Mr. President, I believe I have some time left. Do I? I ask if I would be able to have 3 minutes. I don't think I used all my time. Perhaps I yielded it back.

Mr. President, I ask to reclaim 3 minutes.

Mr. President, I would ask my friend and colleague from North Dakota--we heard about how plush the Medicaid Program is and that there are no alternatives left. It is my understanding in this particular proposal there is a $70 billion tax cut. Am I correct, there is approximately $70 billion that will be included in this budget?

So there are questions of priorities, that there will be $70 billion in tax cuts at a time when we are listening to those talking about the pressures that are on the States in terms of Medicaid. I am wondering whether the Senator would agree with me that we have seen a loss of health insurance for 5 million American workers, a growth in poverty among children--nearly three quarters of a million more children fell into poverty between 2002 and 2003, and 4 million more Americans fell into poverty in the last four years, and the States are hard pressed. Would the Senator not agree with me that all of us are strongly against the kind of asset protection frauds that take place? That isn't what we are talking about here. My understanding of this is that there are going to be some real cuts for people and real benefits for people. I was interested in what the Senator from North Dakota felt about these priorities.