Vehicle and Fuel Choices for American Security Act

I ask unanimous consent the time consumed since 9 o'clock be credited to the budget time and the budget time be reduced by that amount of time and that it be allocated to our side.

Mr. President, I understand Senator Feingold will speak to the amendment offered by himself and Senator Conrad and after Senator Feingold finishes speaking, I ask we go into a quorum call with the time equally divided as was ordered.

Mr. President, I rise to speak to the pay-go amendment. Pay-go is a term that has sort of taken on a motherhoodlike atmosphere around here. There are some terms which occur in the legislative process or in the political arena that become perceptionwise different than what they are in substance. The perception becomes the issue versus the substance.

Pay-go has taken on that sort of status because it sounds like something that makes sense. But to be honest, what pay-go is is a tax increase. It is that simple. The way this amendment is structured, it guarantees a tax increase. Rather than saying they are for tax increases, they are saying they are for pay-go. In fact, the last chart the Senator referred to which showed very large numbers in this bill which he didn't call taxes were just that--taxes.

If you want to adjust those numbers, you are going to have to raise taxes by the $214 billion he cited in that chart. So pay-go is a stalking horse for a tax increase. It is really that simple. It is also technically not an appropriate approach, and this is why.

CBO scores things around here, and CBO basically drives the decisions of the budget process because what the Congressional Budget Office says is what the baseline is; in other words, how much a program will cost in the outyears, how much tax revenue will occur in the outyears as a result of a tax proposal. But CBO uses different standards for different groups of spending and taxes. For discretionary spending, they have one set of standards. For entitlement spending, they have another set of standards. For tax revenues and tax cuts, they have another set of standards.

So when you create this pay-go language, which the Democratic side is offering, you are creating a one-size-fits-all and applying it to different accounting systems, and it produces perverse effects. The most perverse effect is it basically means you have to raise taxes, but you will never actually impact entitlement spending.

Why is that? Because under the way CBO works, they say entitlement programs never end. It is amazing. You can have an entitlement which had an authorization life of, say, 10 years, but CBO would score it as if it went on forever, never sunsets, never is perceived by CBO as having to be reduced or in any way adjusted. That is the decision they have made in scoring entitlements.

On the tax side, however, they take the exact opposite approach. If you have a tax cut which is authorized for 5 years or 10 years, at the end of the 5 years or 10 years, they presume that tax cut is followed by a tax increase and, as a result, they presume there has to be more income coming in because taxes will go up.

The practical effect of that is that this pay-go proposal will never actually be applied to an entitlement that already exists, but it will always be applied to a tax cut that already exists,

which results in tax cuts being significantly prejudiced by this approach because it is a one-size-fits-all approach.

If CBO were to change its scoring mechanisms and say that entitlements didn't go on forever, then it would be logical to have this type of an approach--potentially logical--because then you would actually have to pay for entitlements and you would have to pay for tax cuts. But under this proposal, that is not the case. Under this proposal, only tax cuts would have to be adjusted and paid for and would be affected by pay-go, and it would essentially be, therefore, a tax increase mechanism. So when our colleagues vote for this, they are voting for tax increases. It is that simple.

Another problem with this technical problem is it again goes to CBO scoring. For example, under the CBO scoring, CBO uses capital gains as a revenue loser. It does not score capital gains for the dynamic effect it has on the economy. When we cut capital gains rates--it has been proven every time we have done it--we generate revenue. Why is that? It is called human nature, and human nature usually overwhelms accountants. They just sometimes cannot handle the concept of human nature, but human nature goes to work when you cut the capital gains rates because when somebody owns an asset and has owned it for a while, it is an asset which they know if they sell they are going to have to pay 30 percent taxes on. Then we cut the tax rate on that asset to 15 percent, if they sell it, and there is an incentive for them to sell that asset and to reinvest those dollars in something that is probably more productive. But if the tax rate stays at 30 percent, there is no incentive for them to go out and make that sale because they recognize they are going to pay a very high level of taxes on it. So assets get locked up. Stocks that might be sold get locked up, investments in real estate that might be converted get locked up, small businesses that might be converted get locked up, and farms that might be sold get locked up because the incentive to sell is reduced by the high level of taxes.

So when we cut capital gains rates, which is what we have done, we create this huge infusion of economic activity. People start to sell assets which they wouldn't otherwise have sold, and that generates income to the Federal Government because taxes are being paid that would not have been paid before and there would be no tax revenue coming in because people would sit on these assets. We generate a tax event.

More important, the money which was invested in that asset is reinvested and, by human nature, it is reinvested in something that, to the person doing the investing, is going to be more productive. By creating more productive investments, we end up creating more economic activity, more jobs--many more jobs--and, as a result, once again, we generate more revenue to the Federal Government.

A capital gains cut actually generates a lot of revenue. We see on this chart that CBO--the blue line--simply is not willing to score that type of economic activity, the real economic activity, the actual economic activity generated from capital gains cuts. We have had a huge infusion of revenues into the Federal Treasury as a result of the capital gains tax, huge--$60 billion, $75 billion, $81 billion.

What happens is CBO uses these artificially low numbers to score that capital gains cut even though capital gains is paying for itself. If they used the accurate numbers, then pay-go wouldn't even apply to a capital gains cut because capital gains would pay for itself. It would pay for itself because it would generate so much revenue. But CBO scores it as a loser, even though it is a winner, so a capital gains cut is subject to the perverse approach under the CBO scoring rules of having to pay twice if you have pay-go in place. First, it would pay because it would generate the revenue to cover the cost of the cut, which CBO claims is a cost--it is not a cost; it is actually a revenue winner--and then it would have to pay on the presumption it was going to cost money, when, in fact, it is not going to cost money, and then you have to find revenues to cover it.

There is a perverse accounting mechanism working here if we put pay- go in place relative to items such as capital gains reductions. That is a technical reason this proposal does not work.

The bottom line of this proposal is simple: It is a tax increase. The basic engine of this proposal, the basic effect of this proposal would be the engine to drive tax increases.

There is a fundamental disagreement between the two parties as to whether we should have tax increases driven by an accounting mechanism or whether we should have them driven by policy. It may be we should do some tax increases around here in certain areas. The Senator from North Dakota has pointed out some loopholes that should be closed, and I am for that. And he has suggested we should collect more taxes that are owed. I am for that, too. But I don't think we should use an accounting mechanism to basically repeal the capital gains rate and the dividends rate, which is the purpose of this amendment.

This amendment is targeted to two tax cuts: dividends and capital gains. And then later on, when the rates adjust, when the rate adjustment comes to an end, it will be targeted on rates. It is like a laser beam aimed at those two issues. If it were to be in place today, it is unlikely we would have a capital gains rate or dividend rate at the present levels.

The result, in my opinion, would be to chill the economic recovery because I think a huge part of our economic recovery has been these numbers right here, capital gains activity: people realizing their gains, selling an asset, and reinvesting it in something more productive, which creates economic activity, jobs, and revenue.

There is a fundamental disagreement here. This is a stalking horse for a tax increase, in my opinion. It is doing it through a technical vehicle, but it is clearly going to have that result. If we were to put a major new entitlement on the books, it would actually impact that, I give it credit for that. But we already have on the books a pay-go which affects new entitlements--new entitlements. I would love to have a pay-go that affects existing entitlements, and if they want to redraft the amendment to do that, I would be happy to take a look at that.

The practical effect of this amendment is singular in purpose: It will force a tax increase.

I yield the floor.

Mr. President, let me briefly respond to the Senator from North Dakota. I was right then, and I am right now. Times change and dynamics of what is happening around here change substantively.

The only thing that will be impacted by this pay-go amendment, if it is adopted, is tax increases. That is it, because there isn't a major new entitlement being proposed. In fact, as I mentioned before, the way the scoring occurs around here, all the entitlements will continue.

These are the entitlements that are exempt: Food Stamp Program, TANF, Commodity Credit Corporation, veterans compensation, child care, State children's health, rehabilitation services, ground transportation, Federal unemployment insurance, child nutrition, and the list goes on of entitlement accounts exempt from the Senator's pay-go and pay-go generally. There is a pay-go in the bill.

What isn't exempt is the fact if this were in place today, capital gains and dividends would be subject to it. And that is totally inconsistent because capital gains, as I pointed out--what happened to my chart? Somebody took it down, I guess as a courtesy to the Senator from North Dakota because this is such a devastating chart and he didn't want it to undermine his arguments.

As this chart points out definitively, the money is in the bank, or at least it is in the Federal Treasury until we spend it. We are generating huge amounts of revenues from capital gains. Under this pay- go amendment, were it in place, you would have to pay for capital gains because CBO does not score it relative to what it actually does.

The next event to which this is going to apply is the death tax, if pay-go is in place. That is the only thing it will impact in this budget window over the next 5 years because the only thing that is planned in this next 5 years will be the death tax and the rates, and it will be used as the club to generate tax increases. That is all it is for in the context of today.

You look over this 5-year window of what this budget says, you take this pay-go language and lay it over that 5-year window, and the only thing it will impact is taxes, and it will basically be used as a lever, as a club, to raise taxes. It shouldn't be called pay-go, it should be called tax-go. The Senator from North Dakota made this case for us when he held up his chart that showed all these bars--and he didn't identify what they were--of numbers that this budget allegedly doesn't cover that are losses of revenue, according to the Senator from North Dakota, because we have cut taxes. He didn't actually say they were loss of revenue from tax cuts, he used some other term for it. I don't know what the term was, but he had one bar that was $216 billion. Well, that is death taxes, rate cuts, dividends and interest, for the most part.

There might also be some R&D tax credits in there and some State and local deductibility. So it is ironic, to say the least, that they would claim that this is a balanced approach.

Another ironic thing is we have heard the Senator from North Dakota and other Members come to the floor and say the AMT is an outrage, the alternative minimum tax. Well, I haven't heard them suggest how they are going to pay for fixing the AMT, but under their amendment, they would have to, and that is an $800 billion hole. I happen to think we should fix the AMT, and we should fix it in the context of revenue neutrality. But I don't see any amendments floating around here, and I haven't seen any amendments floating around here to accomplish that.

So I don't see how you can argue anything other than the fact that this proposal, as it is presented, has one fundamental impact: and that will be that over the next 5 years any attempt to extend any tax cut will be put to a 60-vote point of order and will be, therefore, pressure to raise taxes. It will be pressure to raise taxes to do that extension. It will have no impact on anything else because there are no new entitlement programs planned in this bill. And because CBO scores all entitlements that already exist as going on forever, they won't be hit by this proposal.

So as I said earlier, it is a one-size-fits-all proposal that disadvantages tax cuts. The irony is the tax cuts that pay for themselves, such as capital gains and dividends cuts, which generate economic activity, which generate income, will end up having to be paid for twice. That really doesn't make any sense, and it will be driven by an accounting mechanism. I don't think policy should be driven by an accounting mechanism when it is so unfairly applied where it basically impacts tax policy one way and entitlement policy another way. I would rather see something that was fair. But, in any event, I don't support this because it is a tax increase mechanism.

Mr. President, how much time is left on this amendment?

Mr. President, let me simply respond to some of the things the Senator said.

We haven't seen a budget plan from the Democratic side of the aisle for the last 2 years. In fact, even when they were in control of the Senate, we didn't get a budget across the floor from the other side of the aisle. I think one of the reasons is because they would have to openly admit to the fact that what they are basically saying, in language which is not specific but which is clear, is that they are going to raise taxes, that they want to raise taxes, and pay-go is just a stalking horse to accomplish that. It is that simple. The facts are very clear.

If you take this pay-go language and you template it over this budget, there are no entitlements that are going to be impacted. None. But there are taxes that are going to be impacted: specifically, capital gains, dividends--if they aren't addressed in this reconciliation package that is still being worked on--and the death tax.

I think most people in this country know that when their rates go up, they are getting a tax increase. And the effect of the pay-go language will be that if you get to the time when the rates have to be extended, the pay-go language will either force them to go up or force taxes to be raised somewhere else. It will be basically a major club used for the purpose of defeating the maintenance of things like the capital gains rate, dividend and interest rate, the dividend rate, and the death tax. That is the purpose, and it couldn't be any clearer from the facts.

I wish the Senator would present a budget because I think if he did, you would see that. Clearly, he hasn't addressed how they are going to do AMT. That amendment has been offered from their side. It was in committee, and it is, I presume, going to be offered again before we finish. Are they going to offset that with tax increases, that almost $1 trillion tax event? If they are going to stick to their language, they should. I don't think they will. So there is a different standard.

The point is obvious. This language, as it is presently structured, because of the facts that we have before us, which is a 5-year budget which has no new entitlements in it, and because CBO scores entitlements as going on forever and therefore they are never impacted by this pay-go language, this pay-go language will not affect the spending side of the ledger at all. But it will affect the tax side of the ledger. And when the death tax needs to be extended, this pay-go language will require a tax increase. When rates need to be extended, this pay-go language will require a tax increase. When dividends and interest, dividends and capital gains, should they not be extended in this reconciliation agreement need to be extended, this pay-go will require a tax increase, and that is the purpose of this.

This concept that CBO writes us back and says: Well, we can't really figure out that the capital gains cut generated capital gains income, that is one of the problems here. The CBO is taking a very strict green-eyeshade approach to budgeting. The way they build their baseline, they use four or five different major assumption groups. The assumption group they use for entitlement, the assumption group they use for taxes is entirely opposite and unfair and disproportionately impacts the capacity to do anything on the tax side of the ledger around here. And this amendment, if it were agreed to, would lock in that unfairness.

Clearly, capital gains generate revenue. Now, maybe the Senator from North Dakota wants to repeal the capital gains rate. He is saying in the outyears they don't generate revenue, they lose revenue. I happen to think they create a great deal of capital activity and investment and people are willing to take risks because they have a tax rate that is reasonable.

In the industrialized world, in major industrialized countries, we still have one of the highest rates of taxation on capital there is. Most industrial nations don't even tax capital formation because they recognize it creates jobs. We do, and the rate we have is reasonable, in my opinion. But if the Senator from North Dakota wants to raise it because he thinks in the outyears it is a revenue loser--fine. Say so. Offer a budget that does that. I would be happy to debate that rather than move under the terminology that is misleading, this motherhood terminology of pay-go, which is nothing more than ``tax-go'' in the way it will be applied to this bill and to the next 5 years. Obviously I oppose this amendment.

Mr. President, I appreciate the Senator from North Dakota telling us what I am saying. I do wish the Senator from North Dakota had brought forward a budget so we could see what he is saying and what their side thinks they should do. Right now their budget is a blank piece of paper as an overall document, and it has been for the last few years. But if we look at what they did in committee, I think you can get an idea. They proposed amendments which would have increased discretionary spending by almost $19 billion and mandatory spending by $127 billion. That is a lot of new spending. And they raised taxes by about $130 billion. That is a lot of new taxes. So there is no discipline on their side of the aisle relative to controlling the rate of growth of this Government. In fact, just the opposite. They want to expand the rate of growth significantly and they want to raise taxes on the American people to accomplish that. That has always been their position and we are going to see amendment after amendment offered to this budget which will essentially increase spending.

We have already got a few in line here. I think Senator Kennedy is going to offer one for $6.5 billion as the next amendment, or one of the coming amendments here. There are others coming down the pike. They are all going to be paid for by raising taxes.

The position of the other side of the aisle on this, although they manage to keep it a little foggy because they don't put forward their own budget, is pretty clear. They want to increase and grow the size of this Government significantly and they want to raise taxes to do that.

What the pay-go amendment does is raise taxes. You can't deny this. There are only three items of any significance that they are going to impact in this budget. My budget has no new entitlement spending in it so pay-go won't apply to any entitlement spending. It has a lot of entitlement spending presumed in it because entitlement spending is, of course, a big part of the budget. But none of that entitlement spending is affected by pay-go because, as a practical matter, pay-go will be exempting those entitlement accounts.

This reflects what were the amounts of tax increases offered from the Democratic side in committee when we marked this bill up: $133 billion, and the amount of new spending, $127 billion. It puts in stark terms how much new spending was proposed in committee by the Democratic membership, and new taxes.

Now they want to use this vehicle of pay-go to essentially repeal the tax cuts. That is what they are trying to do. The only items, as I mentioned, that are going to be impacted by this pay-go language will be the extension of the tax cuts. What tax cuts will need to be extended in the next 5 years? There are the rates, there are capital gains and dividends, and there is the death tax. Those are the big ones. Also maybe State and local deductibility in that category; I am not sure. That may be extended further than this window. But in any event, those are the big ones.

They are saying to a person whose rates go up: Your rates are either going to go up or taxes are going to have to be raised somewhere else to keep them at their present level. This argument that you are going to cut spending around here, and to raise taxes--I would love to see the other side of the aisle come forward with that proposal. I might be willing to do that and there might be two other people on this side of the aisle who might be willing to do that, but I have not seen a proposal from the other side of the aisle to cut spending anywhere.

The Senator from North Dakota argues that this budget adds enormously to the debt. It adds a lot less to the debt than anything the Senator from North Dakota has presented because he is not willing to freeze nondefense discretionary spending. He has not put forward a budget that reduces debt.

What this budget at least does is put in place discipline on the discretionary side of the ledger. It sets a cap--$873 billion. As long as you have that cap you have something around here to enforce so you can limit spending. It doesn't do as much as I would like to do on the entitlement side, but at least it puts in place a mechanism for us to have a point of order should entitlement spending get out of control-- should more than 45 percent of an entitlement account, which is supposed to be an insurance account, end upcoming out of the general treasury--and I understand they are going to try to repeal that point of order. And then they claim they are for budget discipline?

The inconsistency of their position is reflected by the facts on the ground and the facts on the ground are pretty clear. The only thing this pay-go amendment will affect is taxes and it will force tax increases and it will make the extension of the tax cuts much more difficult to accomplish, which will be a tax increase.

If your rates go up, if your tax rates go up, that is a tax increase. I think everybody in America probably understands that. You can call it pay-go if that is the term you want to use. If that is the new term we are going to use around here for raising taxes, we will call it pay-go and I guess that is what they want to say. When you raise taxes around here, we will call it pay-go.

That is because you didn't offer a budget.

Will the Senator yield on that point?

I will give you another minute if you want to yield on that point.

I ask for 30 seconds also.

Take a minute.

Mr. President, I think the Senator is making my case. Basically, he is admitting the fact that he is proposing to raise taxes by $133 billion. You can't do it the way he is reflecting. You are going to have to do it some other way. In fact, all his offsets raise about $11 billion, according to the Finance Committee. The uncollected taxes there--sure, we would like to get them, but CBO won't score them so we can't use it. The fact is the pay-go language is one way to generate a lot of new revenue because it will essentially say you can't extend the tax cuts and you are going to have to raise taxes dramatically if you do try to extend those tax cuts, so if you want to raise some big-time taxes around here you vote for this pay-go language.

Simply as an aside, I have to say the reason we didn't offer a budget, in response to the Senator, when they were in control of the Senate was because the last year they were in control of the Senate, they didn't offer a budget themselves. They haven't offered a budget now for 6 years, I think--maybe it is 5. We would love to have them offer a budget because then we would see very specifically this philosophy which is reflected in the amendment process, which is one of growing the Federal Government, spending a lot more money and raiseing a lot of taxes to do it.

Mr. President, I understand under the prior order the Senator from Missouri is to be recognized to offer an amendment.

Mr. President, this amendment is a classic tax-and-spend amendment of which we have seen a large number coming from the other side during markup. In fact, $133 billion in new taxes and $126 billion in new programs were offered by the other side. That is called growing the Government--dramatically. It is also called putting a lot of burden on people working to pay taxes.

This amendment is a continuation of that approach. The euphemism ``loophole'' is used to try to avoid the fact that what we are proposing is major tax increases to pay for this. If you are going to have a responsible budget, you have some budget discipline. You have set priorities. We have attempted to do that with this budget.

Certainly this Presidency has done a great deal in the area of education. The Senator from Massachusetts says we need a massive effort in the area of education. I would say adding $9 billion just last month into the higher education accounts is a pretty big effort. The Senator from Massachusetts voted against that. It was in the Deficit Reduction Act where we took a big chunk of money and put it into higher education. I believe $4.5 billion went to low-income students who were college bound. There was about $4 billion which went to reduce origination fees for students who want to go to college. Those are big numbers. And $1.9 billion went to people who were taking up special education as their vocation when they got out of college or math/ science. There was loan forgiveness for those folks who decided to pursue those disciplines which are in great need. That was a huge infusion, and this administration supported that.

In general, this administration's support for education has been so much more dramatic than the last Democratic administration that it is almost embarrassing, I would think, for members of the other party to come to the floor and claim this administration hasn't done too much in this area when you consider what they have done in comparison to what the Clinton administration did.

This chart reflects that in dollar terms, the type of increases we have seen on an annual basis. You can see that the Clinton increases for title I, for example, were about a third of what this President did. Clinton increases in IDEA special education were about one-seventh of what the President has done. The Pell grants, this President has significantly increased Pell grant funding. The Clinton administration actually reduced it. And the total discretionary funding on an annual basis, this administration has added an annual $3 billion increase; the Clinton administration about half a billion dollars. Those are big numbers, a big commitment to education.

Yes, the President's budget, as it was sent up, in some of those accounts that have grown so dramatically did limit the rate of growth this year. But we actually adjusted that in our bill, and we have put another $1.5 billion into these accounts which is reasonable.

Of course, I have to emphasize that we don't actually control that number. That is controlled by the Appropriations Committee. All we do is control the top number. The Appropriations Committee makes the allocations. We have departed from the guideposts which the President put out there and put in some ideas of our own, but they will all be decided, of course, by the allocations made by Senator Cochran, chairman of the Appropriations Committee.

The number commitment which is shown by this chart is dramatic, and it is reflected in the fact that we just did a $9 billion infusion in the higher education accounts over 5 years, which is significant. Every time we have done a Republican budget, the Senator from Massachusetts has, in his own inimitable way, come to the floor and offered an amendment to dramatically increase spending. This year isn't any different. I am not surprised by the amendment. But I do think if you are going to have a disciplined budget, you have to live within the spending restraints with which you are confronted.

We have heard a lot from the other side about the failure to address the issue of debt. The failure to address the size of the Federal Government is what drives debt. If you are going to allow the Federal Government to grow by $6.3 billion, which is what this amendment does, if you are going to raise the cap so that spending is not limited but is suddenly exploded by $6.3 billion, you are going to aggravate the debt. You are going to pay for it with loophole closings, but we all know it is a little difficult to do that. The spending is easy, but the paying for it is hard. As a result, you will end up without any discipline.

This amendment is essentially an attempt to break the caps, to eliminate fiscal discipline, and to do it in account areas in which every account could use more money, but these accounts have not been underfunded. These accounts have been aggressively funded by this administration, especially in comparison with the prior administration. It is hard to argue that on top of these dramatic increases, the $9 billion which we specifically put in for higher education is not a fairly significant commitment--in fact, a very large commitment--to funding higher education. Where this money is going to flow, I am not sure. That will be the decision of the Appropriations Committee. But I am confident that, because year in and year out the Appropriations Committee has supported programs such as TRIO and GEAR UP, those accounts will be funded because we have adequate resources to do it.

I strongly oppose the amendment on the grounds that, A, it breaks the caps and therefore ends fiscal discipline; B, it is a tax-and-spend amendment in the tradition of some of our more liberal colleagues; and, C, it is spending money in accounts where we have already made very strong commitments as a party and as a Government under

this President. Those accounts have received substantial increases and will continue to receive strong support.

I yield the floor and reserve the remainder of my time.

Mr. President, I am not sure what budget the Senator from Maine is talking about, but it is not the budget we brought to the floor as a Republican Senate. The budget that was reported out of committee by the Republican membership funds vocational education. The President's may not have, but our does, and there is $1.4 billion in the budget for that program. We actually put in money that would allow the TRIO Program, the GEAR UP Program, the LEAP Program, and the Perkins loan programs to be increased if the committee wants to do that. We added $1.5 billion of additional funding.

What the Senator from Maine and the Senator from Massachusetts are suggesting is that we should blow the caps by $6.3 billion, raise taxes by $6.3 billion, and do that to fund accounts which already have received significant dollars and which are going to continue to receive significant dollars.

As I mentioned, the higher education funding has received a $9 billion infusion just by the passage of the reconciliation bill in February which was voted against by the Senator from Massachusetts.

This budget has a very strong commitment to education, as have budgets that have come before this body, as has this President who has done more for title I, IDEA, and Pell grants by a factor of three, four, five times what the prior administration did and has made a stronger commitment in the education accounts than probably in any other account, with the exception of accounts necessary to fight the war on terrorism that are discretionary.

It does seem to me a bit over the top to say that within the number $873 billion, which is what we are already spending in discretionary money, there is no ability to adequately fund education in light of the track record that we have funded education very well.

I yield 5 minutes to the Senator from New Hampshire, Mr. Sununu.

Mr. President, there is an inconsistency in the argument coming from the other side of the aisle. The Senator from New Jersey and the Senator from Massachusetts argue that we need a significant infusion of funds into higher education funding to assist students going on to college. Yet they both voted--I believe the Senator from New Jersey, in the House at the time, and the Senator from Massachusetts, in the Senate--against the deficit reduction bill which included a $9 billion infusion into higher education. That was a big number.

The argument that Pell grants haven't been increased flies in the face of the fact that we have created a new account which actually allows up to $8,000 of the cost for a low-income individual to go to college, to be reimbursed on the basis of the Pell structure, and as a result those funds which weren't available prior to the deficit reduction bill are available today. That is $8,000 for low-income students who pursue certain types of disciplines that they can get.

In addition, our commitment as a Federal Government since President Bush took office has been dramatic in the area of title I. These are the numbers. They have gone up exponentially--exponentially--under President Bush. Look at what they did under President Clinton. They just crept along. They just crept along. President Bush came into office and we increased them dramatically.

What about the IDEA? IDEA funding, once again, under President Clinton, just crept along. When President Bush came into office they increased dramatically. Massive increases in funding in IDEA, massive increases of money in title I, massive increases of money going into higher education accounts to assist people wanting to go to college. Not enough. Not enough. You have to come here and propose an amendment which breaks the caps and ignores the fact that we put an extra $1.5 billion into these education accounts over what the President requested with our budget and ignore the fact that we fully funded the vocational accounts over what the President requested and say, no, we have to raise taxes by $6.3 billion and raise the caps by $6.3 billion. Tax and spend.

I have to say this President has had a commitment to education which has been unique in the history of this country relative to dollars, relative to philosophy, and relative to results. I take a back seat to no one on funding education in this institution, and I believe we have a record to stand by, and this budget continues that record.

I yield the remainder of our time to the Senator from Georgia.

I appreciate the Senator's passion. I just wish he had been there when we voted on the deficit reduction bill and we put $9 billion in student assistance and increased the Pell grant concept $8,000 per student, students with low income to pursue academic careers which are needed in this country so we could be more competitive.

As I have mentioned before, the numbers are pretty staggering, what we put into education accounts, and this budget puts in another $1.5 billion over what the President suggested, although again it is not binding. Nothing we do in this budget is binding in a specific account. The only binding number we have and we should keep is that top line on the issue of how much we are going to spend as a Government. I would say not only is it important to pass along good education to our children, but it is also important to pass along a healthy economy to them and a nation which they can afford to live in. But raising their taxes as this amendment does is not going to make us more competitive or make them have a better lifestyle. It means they end up paying more taxes. Not living within your budgets is not a good idea for government, it is not a good idea certainly for students, and I think this amendment sets a bad precedent. It establishes a precedent of saying, well, we will just blow the cap off with either higher taxes or more debt. It is a very inappropriate approach and certainly unfair to those kids who want to go to college and have a country they can afford to live in and be able to make a decent living in and not have to pay too much in taxes.

This amendment, in my opinion, is excessive, inappropriate, and clearly, as a result of busting the budget, is not constructive to fiscal responsibility and to maintaining fiscal discipline here at the Federal level.

Now I would yield back the remainder of my time. I understand the next amendment will be offered by the Senator from Rhode Island.

Mr. President, will the Senator from Rhode Island yield?

Mr. President, first I want to congratulate the Senator from Rhode Island. I think this is a good amendment, and it is done the right way. He has basically come to the conclusion--and a lot of us agree--that IDEA could use some more money, that there is an unfunded mandate.

There are some issues here, of course, as to whether, like a dog chasing its tail, we can ever catch up with the level of Federal funding that should be in IDEA because some States in some ways are overcoding too many kids in the system. But that is a debate for another time.

We have already tried to address that in the most recent IDEA reauthorization. But his initiative of putting $2 billion into this account is an appropriate one and he has done it the right way. He basically says within the budget we are going to set the priorities working with a spending cap. He is saying let us do it as an across- the-board cut and put the additional money we would have into the IDEA account. It is a legitimate way to approach this 920 act because it actually delivers the message which the Senator from Rhode Island wishes to deliver, and as it is executed the Appropriations Committee would actually get the money over there into that account with an across-the-board cut.

The argument which is made is, Well, this has no substance because the 920 account is going to be left up to the appropriators as to whether they would take the approach of the across-the-board cut, which is equally applicable in moving this budget, other than the top line cap number. The top line cap number, which is $873 billion, is the only number in this budget that has force of law. Everything else below that--$400-plus billion that we have allocated in this budget theoretically to defense, an extra $1.5 billion we put into education, the money we put into health care, the money we put into environmental protection--all of those are suggestions essentially to the appropriate committee, which is the Appropriations Committee in this context, in the discretionary account. They may or may not follow it.

But I think the Senator from Rhode Island is bringing this forward in a way which is responsible, staying within the caps provision increase, and proposing an across-the-board cut to pay for it. He is giving responsible suggestions to the Appropriations Committee, which is all the budget does, anyway. It gives suggestions, and they have no binding effect other than the top line cap number, as I mentioned before. I congratulate him on the proposal. Considering the cards which we played, which were dealt relative to the budget, he is doing it in the proper way.

We all recognize that there is a certain illusoriness to all of these numbers because they do not have the force of law. But even the amendment offered by Senator Kennedy has no impact other than to raise the cap by $6.5 billion. It doesn't raise taxes. He claims it does. But we have no authority to raise taxes in this resolution,

and we are certainly not doing anything that would legally bind the Finance Committee to raise taxes. All he is doing is raising the caps by $25 billion. That could be spent on defense, all of it, if the Appropriations Committee wants to do that. He is suggesting that it be spent somewhere else.

The Senator from Rhode Island is at least doing it the right way, which is living within the spending priorities which will make the Government fiscally responsible on the discretionary side of the ledger, but within those let us allocate some more money for IDEA. He has a good proposal. It is the way it should be done. I congratulate the Senator from Rhode Island.

Certainly.

We do have a State corporate income tax but all of the school funding in the State essentially is generated by local property taxes--the vast majority of it. There is a sliver of it that comes from the State government but it is not a significant amount in the treasury overall.

Mr. President, there is no question that the Senator from Rhode Island has touched on an important subject with this amendment, which is the fact that the Federal Government has never fully lived up to the commitment to special education as initially made. We have made dramatic progress under this President, especially in comparison to the prior Presidency. We are almost up to 20 percent of funding. But there was an original commitment of 40 percent. Certainly every community in New Hampshire--and I am sure Rhode Island--feels they have to pick up a Federal share from here and take it from some other part of the education which they think is important in order to pay the Federal share of special education.

Mr. President, I suggest the absence of a quorum. I ask unanimous consent that the time be allocated equally to both sides.

Mr. President, what is the time remaining?

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

Mr. President, we yield back the remainder of our time on the Akaka amendment.

I believe the next amendment in order will be the Talent-Cantwell amendment.

If the Senator will allow me, I suggest we go to the amendment of Senator Bingaman.

I agree.

I move to reconsider the vote.

Mr. President, I send an amendment to the desk.

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

The amendment I have sent to the desk is the pay-go amendment. In many ways I believe this is the most important amendment to be considered today. This amendment would reestablish the budget discipline that worked so well in previous years, a rule that has been allowed to lapse by our colleagues on the other side of the aisle.

Here is where we are. The debt of our country is skyrocketing. At the end of the first year of this Presidency, the debt stood at $5.8 trillion. That year the President told us if we adopted his fiscal plan, he would have maximum paydown of the debt. In fact, he said if we adopted his strategy, we would virtually eliminate the debt. The President was wrong. The debt was not paid down. The debt was certainly not virtually eliminated. Instead, the debt has skyrocketed. At the end of this year, they now tell us the debt will be $8.6 trillion. And if the budget before us is adopted, by 2011 the debt will be $11.8 trillion. It will have doubled on this President's watch. All of this is before the baby boomers retire. We are on an unsustainable course, and it must be changed. We need to do it as soon as we can.

On the question of pay-go, that simply says if you want more spending on mandatory programs, you have to pay for it. If you want to have more tax cuts, you have to pay for them, or you

have to get a supermajority vote in the Senate. That is the pay-go discipline. It says, yes, you can have more tax cuts, but you have to pay for them; you can have more spending on mandatory programs, such as Medicare and Social Security, but you have to pay for them. That is what pay-go is about.

Here is what Chairman Greenspan said:

All I'm saying is my general rule is I like to see the tax

burden as low as possible. And in that context, I would like

to see tax cuts continued. But, as I indicated earlier, that

has got to be, in my judgment, in the context of a pay-go

resolution.

We have not only heard that advice from the Chairman of the Federal Reserve, but from the respected Concord Coalition, a bipartisan group that says deficits do matter, that the buildup of debt is unsustainable, and said this about pay-go:

Exempting tax cuts from pay-go does nothing to promote

fiscal discipline. It would neither control spending nor

shrink the deficit. All it would do is exempt any tax

legislation from fiscal scrutiny, regardless of the

circumstances. Such an enormous and unnecessary loophole

would not be wise policy given that deficits are back for as

far as the eye can see. Since spending and tax decisions both

have consequences for the budget, there is no good reason to

exempt either from enforcement rules.

I believe they have it exactly right. Our friends, having adopted an enormous loophole, say: You can have all the increased spending you want, all the increased tax cuts you want, as long as they are in the budget resolution. If they are in the budget resolution, they are exempt from pay-go.

Here is what has happened as a result. This chart goes back to 1990. We had a strong pay-go rule in effect from 1991 until 2002. We climbed out of the deficit ditch during those years. In fact, we actually went into surplus. In fact, we went into surplus to such an extent we stopped raiding Social Security trust funds to pay other bills.

Then our colleagues on the other side got control of the White House and both Houses of Congress, and they ended the pay-go rule. Look what has happened. Surpluses were eliminated. We have plunged back into deficit, bigger deficits than we had even back here.

That is what has happened without the discipline of pay-go. What we are saying today is, let's reinstitute the discipline of pay-go. Let's do it now.

This chart shows how we would eliminate the loophole that currently exists. The current loophole put in place by our colleagues on the other side exempts all tax cuts and mandatory spending increases assumed in any budget resolution, no matter how much they increase deficits. What we are offering today is the budget discipline, the pay- go rule that worked so effectively in the past. It says all mandatory spending and tax cuts that increase deficits must be paid for or require a supermajority, 60 votes, in the Senate. That is what we ought to do.

This is what has happened in terms of deficit increases when we had the budget pay-go loophole that is currently in effect. In 2006, $12.5 billion allowed under the Senate GOP budget with their pay-go loophole. In 2007, $36 billion of additional deficit allowed. In 2007 to 2011, almost $214 billion is going to be permitted, if we don't shut it down.

I hope my colleagues will adopt the pay-go rule, the budget discipline that has worked so well in the past. It is critically important that we do that. This is our opportunity. For those who say they are fiscally responsible, here is your chance. You are going to be able to prove with one vote whether you are serious about doing something about these runaway debts and runaway deficits or whether it is all talk. This is going to be the chance. This will be a vote that tests whether Members are willing to stand up and take a tough vote and reimpose the budget discipline that has worked so well in the past.

I ask what the time situation is.

I thank the Chair.

If there are others who want to speak on pay-go, this is an opportunity. We have hopefully a few minutes left on this amendment before we go to the next one. We have been taking time so far this morning off the resolution. Perhaps when the chairman returns, we can make an arrangement to take additional time off the amendment as well so we can keep on our schedule.

With that, I suggest the absence of a quorum.

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

Mr. President, I ask unanimous consent that the 5 minutes Senator Feingold used be attributed to the amendment and taken off the amendment time.

If the Chair could inform me how much time is left on our side on the amendment?

And how much time remains on the other side on the amendment?

Mr. President, I could not disagree more. I could not disagree more. Pay-go doesn't require a tax increase. This is just not true. What does pay-go say? Pay-go says if you want to have new mandatory spending, you have to pay for it. If you want to have new tax cuts--new tax cuts--you have to pay for them. That is what pay-go says. Nowhere does it say anything about increasing taxes. The chairman is just wrong; it doesn't say that. It doesn't require that.

It does say if you want new mandatory programs, such as the new prescription drug benefit that was passed--if we had pay-go in effect at the time the new prescription drug program was offered, we would have had to pay for it either through increased revenue or from cuts elsewhere. That is what pay-go says. It doesn't say there has to be a tax increase. That is just a red herring argument. Frankly, I am surprised the chairman makes it.

Here is what the chairman used to say about pay-go not so very long ago. In 2002, the chairman, who now argues against pay-go, said this:

The second budget discipline, which is pay-go, essentially

says if you are going to add a new entitlement program or you

are going to cut taxes during a period, especially of

deficits, you must offset that event so that it becomes a

budget-neutral event that also lapses.

That is what the chairman said in 2002 when he was an advocate for pay-go. He went on to say:

. . . If we do not do this, if we do not put back in place

caps and pay-go mechanisms, we will have no budget discipline

in this Congress, and, as a result, we will dramatically

aggravate the deficit which, of course, impacts a lot of

important issues, but especially impacts Social Security.

That was the chairman 4 years ago, and he was absolutely right in his support of pay-go then and in his recognition that pay-go was essential to budget discipline. He was right. He wasn't talking about requiring a tax increase then. This is a new argument which has been concocted to try to derail putting back the budget discipline which is absolutely needed.

Pay-go doesn't require anything unless you try to increase mandatory spending, in which case you have to pay for it or get a supermajority vote. It doesn't do anything to taxes unless you try to cut taxes without paying for it. That is what pay-go does. There is no requirement of a tax increase here; there is a requirement we start paying for programs.

When--when, I ask--are we going to start paying for things around here instead of just increasing the spending, cutting the taxes, and running up the debt? Because that is what we are doing. Since pay-go lapsed, the deficits and the debt have exploded. This is an opportunity to begin the process to rein in the growth of deficits and debt. That is what pay-go is about, and that is why it should be supported today.

I thank the Chair and yield the floor.

Mr. President, the chairman keeps repeating himself: this is a tax increase. You can use the words, you can repeat it 100 times, it doesn't make it true. It is not a tax increase. Pay-go very simply says: if you want to increase or create a new mandatory spending program, you have to pay for it. You don't have to pay for it with a tax increase, you can pay for it by cutting other spending. If you want to have more tax cuts, you can have them, but you have to pay for them, either through cutting spending or raising other taxes. That is what pay-go says. That is what pay-go does. It restores a budget discipline that is desperately needed.

The chairman says they have pay-go. They have a figment of pay-go because their pay-go exempts all tax cuts and mandatory spending increases that are assumed in any budget resolution, no matter how much they increase the deficit. The record is very clear. What has happened with weakened pay-go? What has happened?

Let's go back. Pay-go was put in place right here, and we climbed out of the deficit ditch and we actually achieved budget surpluses. When it was weakened, here is what happened: surpluses were eliminated, we plunged back into deficit, and the debt is skyrocketing.

That is the choice before the body. Do we really want to continue on this path of running up the debt of the country to record levels? That is the course we are on.

I would again remind my colleague of what he said in previous years. Back in 2002 the distinguished chairman, in floor debate, said this about pay-go:

The second budget discipline, which is pay-go, essentially

says if you are going to add a new entitlement program, or

you are going to cut taxes during a period, especially of

deficits, you must offset that event so that it becomes a

budget-neutral event.

He went on to say:

If we do not do this, if we do not put back in place caps

and pay-go mechanisms, we will have no budget discipline in

this Congress.

He was right then. He continued:

And, as a result, we will dramatically aggravate the

deficit which, of course, impacts a lot of important issues,

but especially impacts Social Security.

The chairman argues on one tax type alone. He argues on capital gains. Let me say that CBO has reviewed that question, and they wrote a letter to the chairman of the Finance Committee that said this:

After examining the historical record, including that for

2004, we cannot conclude that the unexplained increase in

capital gains tax revenue is attributable to the change in

capital gains tax rates.

This is after their careful analysis. I would acknowledge the chairman's chart that shows increased capital gains tax receipts higher than previously projected. CBO has studied

this, and they say they can't attribute that to the lower rates. I think most people would say the increased revenue is initially, in part, an effect of lower capital gains rates. But over time, a capital gains tax reduction loses revenue, not gains it. In other words, you get an initial bump, but after that you start losing it.

On the larger question of whether tax cuts pay for

themselves, we don't have to have a theoretical discussion.

We have what has happened in the real world.

In 2000, we collected over $2 trillion in revenue. Then we had the big tax cuts of 2001, and our Republican colleagues and the President all assured us: Don't worry, that will generate more revenue.

Well, guess what. It didn't. That is the problem with their argument. It didn't work. It failed, and it failed miserably.

In 2001, we had almost $2 trillion in revenue, big tax cuts, and the revenue went down; in 2002, less revenue than 2001; in 2003, less revenue than in 2001; in 2004, less revenue than in 2001. We didn't get back to the revenue base we had in 2000 until 2005. In real terms, we are nowhere close to the revenue base we had in 2000. We are nowhere close because this ideological argument failed in the real world. That is a fact. It failed. It didn't work.

One of the reasons we have runaway deficits and debts is our colleagues have just been wrong. They bet the farm on a concept that didn't work in the real world. Now the question is, Do we do something to reestablish budget discipline, or don't we? I hope we will.

I yield the floor.

Mr. President, again the chairman repeats over and over that this requires a tax increase. He is wrong. No colleague should be fooled by that rhetoric. It requires new mandatory spending to be paid for. You can pay for things one of two ways: You could do it with a tax increase. You could also do it by spending cuts.

The same is true of new tax reductions. Under pay-go, you have to pay for them. You could pay for them with tax increases elsewhere, but you could pay for them by reducing spending elsewhere. The chairman seems to have forgotten that is the way pay-go works.

What the chairman is saying is he doesn't want to worry about increases in the deficit and debt. What the chairman is saying is he wants to continue this pattern because this is what has happened under his fiscal plan. The debt is skyrocketing: $5.8 trillion at the end of 2001, $8.6 trillion at the end of this year, headed toward $11.8 trillion if this budget is adopted.

What the chairman is saying is he doesn't want to worry about paying for tax cuts or more spending. He wants to continue to charge up the credit card. He wants to continue sending this debt to our kids and our grandkids. He wants to be free to take the easy political course, that is saying we can have new spending, such as the new prescription drug plan, and not pay for it; that we can have more tax cuts even though we are deep in deficit and not pay for them. That is the position he is taking. If we want to be clear here, that is what this debate is about. Do you want to stay on this reckless course of running up the debt? And the chairman says, not only with his speech here today and his position on pay-go here today, but with his budget, that he wants to run up the debt. He wants to take no responsibility to either reduce spending or to pay for more tax cuts. Instead, he prefers to send the bill to our kids and our grandkids. Let the foreigners continue to loan us the money so they can buy up U.S. assets. That is his position.

I think that is a reckless position. I think that is a position that weakens America. I think that is a position that makes us more vulnerable. I take the chairman back to the position he took

previously on pay-go. At that point he was right. In 2002, he argued for pay-go and he said then:

. . . if we do not do this, if we do not put back in place

caps and pay-go mechanisms, we will have no budget discipline

in this Congress and, as a result, we will dramatically

aggravate the deficit which, of course, impacts a lot of

important issues but especially impacts Social Security.

That is what he said then. He was right then and it is the right position now. If you don't have this budget discipline, you are going to continue on this path and this course of running up the debt. That is what the chairman's budget does. It is precisely what we should not do.

I yield the floor.

Mr. President, how much time do I have?

Mr. President, the chairman says we have offered no budget. The chairman well knows the majority has the responsibility to offer a budget. Our responsibility is to critique that budget. We have done so by pointing out that this is the effect of the chairman's budget. It increases the debt every year by over $600 billion. That is the budget that has been offered by the majority. When we were in control, they didn't offer alternative budgets.

They didn't offer alternative budgets.

I am afraid I have only got a minute left.

I will be happy to complete my thought and finish.

Over all the years when we were in control, Republicans did not offer alternative budgets.

With respect to what we did in committee, every amendment we offered was paid for. The Senator is entirely correct. We offered amendments with revenue of $133 billion and with increased spending of $126 billion. So we paid for every amendment. We didn't pay for it with tax increases. We paid for it by closing the tax gap, money that is owed that is not being paid, which the revenue commissioner has said could be collected.

I ask for an additional 30 seconds.

Let's take a minute and a half.

We ask unanimous consent for a minute apiece.

And we offered to close tax loopholes, these egregious tax loopholes that we have pointed out repeatedly. That is not a tax increase. It is more revenue. It is not a tax rate increase on anyone.

But that gets us back to the fundamental question of, What is the direction we are going to take? Are we going to continue to run up the debt of the country, as the chairman proposes? Or are we going to take a new turn and go back to the budget disciplines that have worked in the past? I urge my colleagues to go back to the budget disciplines we have had in the past. If you

want to spend more money, you have to pay for it. If you want to have more tax reductions, you have to pay for them. It is a simple principle. We have had it in the past. The chairman has endorsed it in the past. It is the right course.

Will the Senator yield for a question?

Mr. President, I will not argue with the Senator on the need for this additional defense spending. My own view has been that what the President asks for at a time of war with respect to the defense, we ought to provide. We ought to stand shoulder to shoulder with the President at a time of war with respect to defense expenditures.

What I do want to ask the Senator, how is he funding this increase? Is it correct that the Senator is paying for this increase with cuts in function 920?

Am I correct, then, in understanding that the Senator would pay for this increase in defense in part by cutting homeland security?

Mr. President, I say to my colleague, the Senator is correct; function 920 is the other discretionary accounts. So the effect of the Senator's amendment is to ``plus up'' defense, but he does so by cutting homeland security, cutting law enforcement, cutting veterans' benefits, cutting defense itself.

I say to my colleague, there is no new money here. This is taking out of one pot and putting it into the other pot. And one of pots that is being taken from is defense itself, homeland security, law enforcement, and others. My own assessment of cutting these function 920 accounts is that it is kind of robbing Peter to pay Paul. I hope we do not do much of this in the process of writing this budget.

I support the underlying interest of the Senator in restoring the defense money that was cut in the Committee on the Budget by the mark of the Committee on the Budget chairman. However, I alert my colleagues, it is being paid for--are you willing to cut homeland security and law enforcement, veterans, and other defense accounts?

Mr. President, let me say this Senator agrees with the Senator on the need to deal with the fundamental defense needs of the country. I say to the Senator, I know it is his intention to be cutting travel and overhead, but the way function 920 works is these will be across-the-board cuts to the other domestic elements of the budget; that is, homeland security will take a cut. They will decide where it goes. The Committee on the Budget does not decide that. So homeland security, in the programs themselves, may take reductions. That will be up to the Committee on Appropriations. Law enforcement will be cut to pay for this increase in defense. Defense itself may well be cut to pay for this increase in defense. Veterans programs will be cut, or at least the veterans function will be cut.

I want my colleagues to understand how this works. Although I know it is the stated intention to cut overhead and to cut travel, that may well not be

the result here because the way function 920 works, there will be an across-the-board cut to discretionary programs, and those accounts--and this will be a decision by the appropriators, how they spread these reductions--will be the money used to pay for an increase in defense. I find it a troubling approach in terms of the pay for--not the plus-up. The Senator is correct to ask that we provide the funding the President has requested in defense.

Let me say that one of the great concerns I have in these defense accounts going forward--and I say this to my colleague from Missouri, and I think the Senator referenced this--we have these systems which are aging, whether it is our bombers, our fighters, our ships in the Navy, our aircraft carriers. The tanker fleet is more than 40 years old, much of the bomber fleet is more than 40 years old, and many of our naval ships are reaching the end of their useful lives. So how are we going to recapitalize the defense accounts? It will be one of the great challenges of our generation. I don't begrudge for a moment this increase in defense. It will help us take on some of those very substantial challenges we will confront in the future.

We will have to do some thinking outside the box on how we will recapitalize the force going forward. I am told by National Guardsmen that much of the equipment they took to Iraq is never coming back. It is junk. The incredible heat, the combat conditions they have faced-- much of this equipment is simply being eaten alive.

I am happy to yield.

I have now talked to officials at the Department of Defense, I have talked to the leaders of the services, at least some of them, about the daunting challenge we face for the future. My own view is we are probably going to have to think outside the box in terms of how we fund recapitalization on the force going forward. It will behoove us to begin thinking how we will take on those challenges.

I personally believe we will need to consider leasing or some other way of spreading costs instead of our current practices of paying for new systems with cash on the barrelhead. I do not believe we are going to be able to recapitalize the force in the way we have in the past.

I thank the Senator for, on the one hand, the proposal on restoring some of the proposed cuts here, but I am concerned about the way it is being paid for. I know the intention is to take it out of overhead. The way 920 works, we really do not know how it will be done. The fact is, the budget resolution controls the numbers that will be given to the Committee on Appropriations, but it does not tell them how to make the reductions. We do not control that. That is controlled in the appropriations process, as the Senator knows. The unintended consequence might be that actually this increase in defense be paid for by reducing homeland security, law enforcement, veterans, and defense itself. Those are decisions which will be made by the appropriators. That is why I wish that instead of paying for it in this way, we paid for it in some other way that assured that it was not just taking out of one pocket and putting it in the other.

With that said, we need to restore this funding. We have a very serious problem going forward. Because of the burgeoning debt of the country and the deficits, defense is going to face very difficult challenges in the future when we try to rebuild these aging systems which are critically important to our national defense.

I yield the floor.

Mr. President, first of all, I wish to say to the Senator, I intend to support his amendment.

Even though I think using section 920 is the wrong way to

go. The Senator indicated he has been informed there is $11 billion in the 920 accounts. I just direct the Senator's attention to page 29 of the concurrent resolution on the budget.

If the Senator would direct his attention there and go down the table to allowances, 920, I think the Senator would see there, in fact, is no money in section 920. In fact, section 920 is $500 million in the hole. There is no $11 billion there. That is the problem we have. There is no $11 billion there. Section 920 is actually $500 million underwater. This will just put it further underwater, which will require an across- the-board cut in these other areas: homeland security among them, law enforcement, veterans benefits, defense. Actually, we do not know what the appropriators will do. So I just say that for the information of my colleagues, who may have some sense that there is money in this account, that there really is not.

Mr. President, is the Senator prepared to yield back his time? Because I would be willing to yield back our time in the interest of trying to get back on schedule.

Mr. President, I am prepared to yield back time on this side as well, so we can go to Senator Kennedy's amendment and try to get back on schedule as much as we can.

Mr. President, might I ask my colleague from Rhode Island if we could allow Senator Kennedy to pay respects to Maggie Inouye for 1 minute? We will extend the time of the Senator appropriately.

Mr. President, let me just say----

Mr. President, I am just going to take time off the amendment on our side, not speaking in opposition. I do want my colleagues to know what is occurring here. I entirely agree with the Senator from Rhode Island in terms of his priorities, in terms of additional funding for IDEA. I just want to rise and make the point that I made on the previous amendment that used section 920 funding.

The problem is there is no 920 money available. In fact, if we look at the budget, we see that 920 is already $500 million in the hole. So the result of this amendment, which seeks to add $2 billion, is really a nullity because what it is going to do in terms of what the appropriators see is on the one hand they will get $2 billion, on the other hand $2 billion will be taken away. So what happens, what do the appropriators do? We don't know what they will do. They could add $2 billion to this account and take $2 billion from other accounts. They could. They could just wind up doing nothing.

That is the reality of the budget resolution. I know it is confusing to people. But I am entirely in sympathy with the Senator from Rhode Island in what he is seeking to do in terms of adding funding. The problem we have is using 920 as the function to fund these things because there is no money there. It is an across-the-board cut, and the appropriators will see no real increase. This becomes more than anything a statement of what one wants to accomplish. But the hard reality here is there is no 920 money available. It will have to be an across-the-board cut, however the appropriators determine to make it. There is no new money here.

I yield the floor.

Mr. President, for a moment, let me consult with the chairman and bill manager. Let me take one moment to consult with him and see how we might proceed.

I ask if the Senator from Rhode Island would be prepared to yield back his time.

The Senator has already yielded the time. I am prepared to yield back the time on our side as well.

Let me say that it would be very helpful, if Senator Burns and his staff are listening, if he could come and do his amendment next--I know it is not scheduled until 1 o'clock--so we are using the time efficiently here on the floor.

With that, I yield my time on the Chafee amendment.

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

Mr. President, it might be useful to use this time to alert our colleagues on where we are. We will have six votes at roughly 3 o'clock. At 1 o'clock Senator Burns will offer his amendment on veterans, and then Senator Akaka will offer his. I urge colleagues to be alert to what is actually occurring on the floor. It may be that we will have other circumstances in which the full time is not used.

If Senators are in the queue, it would be very helpful if they can be prepared to come if all time is not used on an amendment.

The other thing I want to make certain colleagues understand is right now we have over 100 amendments pending. Let me repeat that. We have over 100 amendments pending. We know we can do three amendments an hour when we are voting. If we were to vote starting now on all of these amendments, it would take 33 hours of straight voting. And we are not done debating amendments yet.

Colleagues need to understand exactly where we are. If we play this out, if everybody insists on their amendment, we are going to be here probably until the wee hours of Saturday morning. We will be here all day today, on into the night, all day the next day, and all day the next day. We won't complete business until some time Saturday morning in the wee hours. That is where we are headed.

The chairman and I are asking Members to take shorter time agreements. We will ask the next sponsors of amendments to take half an hour, equally divided. If Members could take less than that, please do so. Remember, the alternative is to be in vote-arama where Members get a minute per side.

The only conceivable way we get done Thursday night is No. 1, Members take short time agreements; No. 2, some Members reserve their amendments and save them for another day or another vehicle.

That is where we are. Colleagues should know that. I hope very much colleagues and their staff understand the posture of the Senate. If we do not find a way to get cooperation from Members on taking short time agreements, if we do not get agreement from Members on restricting the number of amendments, we will be here until some time early Saturday morning. Do the math. It is inescapable that is the case.

With that, I hope Members will take this opportunity. If colleagues want to speak on the budget, we have time now until 1 o'clock. At 1 o'clock the next amendment will be offered. It will be Senator Burns on veterans. There is time now. We have half an hour. I hope colleagues will use that time so it is not lost.

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

Mr. President, let me indicate that on our side Senator Cantwell had this very same amendment funded in a somewhat different way. Nonetheless, it is the identical amendment. The two Senators have agreed to make this the Talent-Cantwell amendment because that eliminates, then, one amendment that we would otherwise have voted on. I thank Senator Cantwell for her leadership. I very much thank her for her willingness to work together with Senator Talent to achieve this bipartisan amendment.

I also want to say how critically important dealing with this methamphetamine threat is. I just held a Budget Committee hearing in North Dakota with the attorney general of North Dakota, the U.S. attorney from North Dakota, the State's attorney in the affected county, and with the heads of law enforcement. Without exception they told me the meth threat is the worst thing they have ever faced in terms of a drug; that it is destroying people's lives.

I was recently at a meeting. The man next to me was clearly terribly upset--somebody I have known for a long time, a prominent member of our community in North Dakota. Finally, he told me his son had that day been diagnosed as a methamphetamine addict. He told me it was destroying his family, that he was on the brink of bankruptcy as a result of a long meth addiction by his son, a meth addiction that was proving extremely difficult to treat.

We need more money for prosecutors. We need more money for law enforcement. We need more money for treatment.

This meth epidemic, which may have started in rural areas--I know some of our colleagues in urban areas have acted as though they are not aware of this, that this is not on their agenda. Let me assure Members, it will be on their agenda because we have never seen anything worse. Nothing has affected rural communities in a more adverse way than this meth epidemic.

I again thank the Senator from Washington for her leadership and for her willingness to work across the aisle to come up with a bipartisan amendment.

Mr. President, I ask unanimous consent to be added as a cosponsor to the Talent-Cantwell amendment.

I ask unanimous consent that Senator Feinstein be added to the Conrad-Feingold amendment on pay-go.

Mr. President, Senator Bingaman is available.

How much time remains on the Talent-Cantwell amendment?

I don't think that is correct. We only had an hour available on that amendment.

Senator Bingaman wishes to speak on the Cantwell amendment for 2 minutes and then to his amendment.

That will take us to 3 o'clock, at which time we will be voting.

I yield to Senator Bingaman 2 minutes.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I thank again both Senator Cantwell and Senator Talent for the work on that amendment, first, for working together to come up with an amendment that is bipartisan; second, for the good manners to the rest of the Members of the Senate for agreeing to take a voice vote. That is an excellent example for others. We deeply appreciate Senators accommodating the work of the Senate on this matter.

I ask unanimous consent Senator Collins be added as a cosponsor of my pay-go amendment numbered 3013.

Mr. President, I thank the chairman and the ranking member for arranging the debate on this amendment. I call up an amendment we have at the desk, Talent-Lieberman amendment No. 3011.

I ask unanimous consent to add Senator Carper as a cosponsor of the amendment.

Mr. President, this amendment is a rather simple one. It raises the number in the budget for defense up to what the administration proposed. The budget resolution, as it came out of committee, would have reduced the amount of money requested for national defense by $3 billion. This restores that. It is in my judgment, as I said often on the Senate floor, not all we need to do but it is a first step.

We have to understand context here. The number the President submitted was itself almost $4 billion the President submitted was itself almost $4 billion less than what only a year and half ago the President and the administration said they would need for fiscal 2007.

Under the pressure from the Office of Management and Budget, the Department of Defense has had to reduce its request for the last 2 fiscal years by an amount totaling almost $10 billion and, at the same time, has reduced the amount it said it is going to request for the next 5 years by almost $670 billion--this while we are in a war and this while our responsibilities around the world and even outside the global war on terror have never been greater is a mistake.

I think the first step to correcting that mistake is to pass this bipartisan amendment and restore at least what the President has requested for fiscal 2007.

Let me give some history, some context. We need to go back to the early 1990s and the collapse of the Soviet Union.

At that time, there were concerns about the budget as well and the Government took those concerns out on the national defense. All throughout the 1990s, the Defense budget shrunk. It was the only part of the budget that shrunk. There were some years it shrunk in normal dollars, not even just as against inflation. There was a belief at the time of the collapse of the Soviet Union that we were in an era of peace and we would not need to spend as much on the national defense. Certainly, that was true with regards to certain parts of the national defense. Unfortunately, it turned out not to be true with the Defense budget. I will explain that in a minute.

First, in order to accommodate those shrinking budget there were reductions in the force structure. The number of people we have in the Department was cut across the board by anywhere from a quarter to a third.

The problem with that is we anticipated we would need the men and women in America's military less with the collapse of the Soviet Union, but it turns out that we needed them more. It turned out that history had not ended--it had been frozen during the time of the Cold War, and it thawed out with a vengeance. All the regional and ethnic rivalries that had been submerged in the bipolar nature of the Cold War era came to the surface. We had to deploy our men and women in conventional exercises of one kind or another far more in the 1990s than we

had to do in the Cold War decades in the years before.

What happens when you have fewer people and you use them more? You stress the force, you stress the people, you stress the equipment, you increase the operation and maintenance budgets.

In an era when we thought we would be able to save money on defense, we actually had to spend more, and increasingly the urgent crowded out the important.

Money was put in O&M in order to keep the tip of the spear sharp, if you will, while the rest of the spear rusted.

We took, for many years as a practical matter, a procurement holiday. We did not buy the equipment we needed to buy to recapitalize the platforms, which is what we in the Armed Services Committee call the weapons, the trucks, the support equipment that the men and women in America's military use.

In the 15 years from 1975 to 1990, we typically bought 78 scout and attack helos. In the years from 1991 to 2000, we bought, on average, seven. Whereas, we would buy 2,083, tanks, artillery, and other armored vehicles; we bought, on average, 145. In some cases we acquired about 10 percent of the platforms that we had bought in the 15 years previous to 1990. As a result, the capital equipment that the military is using is old.

Let us talk about some of our aircraft: B-52 bombers are 44 years old; C-130 transports, 33 years old; and KC-135 tankers, 43\1/2\ years old. I could give similar statistics for the other parts of the services as well.

The number of ships we have is going down. In the 1980s we aimed at a 600-ship Navy, and we are now below 300. If we continue at the current shipbuilding levels, we will get down to 200 or below. That is not consistent with the national security of the United States.

But what happened? The Bush administration took over, and to their credit, they raised Defense spending above inflation. There were modest increases in the early part of this decade, and part of the hope was we could recapitalize the infrastructure and make up for that procurement holiday. For a lot of reasons, that didn't happen. The operational tempo continued to grow.

We all know about the military employment level in the global war on terror. There has been what we call mission creep in other areas as well. Think about the tsunami that occurred about a year and a half ago. It was American military forces that were the structure through which we delivered that relief.

We have increased the homeland security mission, the international humanitarian relief operation, special operations, ongoing training operations. The operational tempo was at a historic high, and that ate up a lot of the increases.

Personnel costs: We have great men and women in the military. They are very highly skilled people. There is no such thing as a ``grunt'' anymore in America's military. Today, you have highly skilled people, and we owe it to them, and we must pay them accordingly.

Personnel costs are now $17 billion more per year, adjusted for inflation than in 1999. Seventeen billion dollars more comes out of the hide of the rest of the budget.

China is 5 to 10 years ahead of schedule in what we figure would be a rearmament process. I am not saying China needs to become an enemy of the United States. I hope that doesn't happen. I believe it need not happen. But they are clearly attempting to develop a military capability to exclude the United States from the Western Pacific, should she choose to do so. And the thing that is more likely to encourage them in that ambition than anything else is the reality or even the perception of American weakness.

In addition, we now have the new generation of platforms coming on line. Remember, platforms are ships, planes, tanks, trucks, and other kinds of support equipment.

For the generation of platforms that the new generation of servicemen and women are going to be using to replace the old ones, it is essential that we complete the development of these programs and that we buy out the platforms that we have proposed to buy. The DDX destroyer and the Joint Strike Fighter combat systems, which is the heart of America's Army, its F-22, air-to-air superiority fighter, the new aircraft carriers, the submarines which are essential to our national defense strategy both for intelligence and also in the western Pacific, all of these are coming online in the next few years.

Even with the President's submitted proposal, we cannot purchase the required new generation of platforms.

For all of these reasons, I have been urging for months--in fact, my advocacy on this point goes back to 1993, when I was a new Congressman in the House--I have been warning that we needed to spend more on defense.

I need to point out to the Senate that this is an obligation of the United States we cannot escape. It is similar to the basic capital assets of a company. You have to keep it up. It is not optional to allow the military equipment that our men and women use to age and eventually to collapse. We are going to pay this bill. The longer we wait, the bigger the bill will be.

That is one of the reasons why the investments which the President has proposed and which this Congress has provided in the last 5 years have not been enough even to allow us to tread water. We have continued to slip backward because we did not do what we needed to do in the 1990s.

What do we need to do now? There are a number of us on both sides of the aisle who are proposing, first of all, to restore the number the President has proposed.

I would like to see us go above that in this fiscal year, about $3 billion more than what the President has proposed. That is the amount that the Department of Defense said it needed for fiscal 2007 in the fall of 2004. That was the last budget projection we got from the Department of Defense that was unaffected by the stricture of the OMB. I think we need to go to that point. I said that in speeches on the floor of the Senate last fall. A number of us sent a letter to the President urging him to submit a budget at that number. That is about $443 billion apart from the spending on the Department of Energy that is also included in the defense budget.

Then I think we need to take next year for a searching and honest review of what the Defense budget needs to be in the near future.

I am not the only one who has proposed that. There are a number of Senators on both sides of the aisle and the Armed Services Committee who suggest that we need a systematic increase in the Defense budget. It is now about 3.7 or 3.8 percent of the gross domestic product.

Let me emphasize that. I don't want that figure to slip by without people marking it.

We are spending about 3.8 percent of the gross domestic product on national defense. That includes the supplemental, 3.8 percent in a time of war.

Whatever else is causing the deficit--and there are obviously disagreements on the floor of this body, and we just witnessed an eloquent debate highlighting those disagreements--whatever else is causing it, the Department of Defense and military budget is not. That figure is historically very low. It is much lower than the late 1970s when Jimmy Carter was President.

To try to save money on defense, to believe that you are saving money by reducing the Defense budget below the minimum, is a classic example of being pennywise and pound foolish because the bill comes due. We do not have the option of not meeting our responsibilities in the world today.

The reality, the perception but much less the reality of American weakness encourages instability in the world. Instability in the world is antithetical to the kind of security that people need for economic growth. So I can put it on as low a level as possible. If we do not adequately support the national defense, we are certainly going to get ourselves into bigger economic trouble.

American weakness leads to conflict abroad, conflict abroad can lead to war, and war is very bad for the national deficit.

So we need this searching review. We can have that. We can decide where we need to be structurally beginning next year. I think the Armed Services Committee is going to do that.

I want to close on a hopeful note. This is well within our capability. This is a great nation, a strong nation.

If the Government will meet its obligations and do what it is supposed to

do, the people will drive the prosperity of this country. They will produce the wealth on which they depend, on which this Government depends, to sustain those programs that are necessary to protect our security and also help the weak and the helpless among us.

We had a funeral for President Reagan in the recent past. He laid in State. And I thought Members of both parties did a wonderful job eulogizing him.

We should learn the lesson of history that his administration taught us. He understood the importance of American power in the world.

When he became President, we also had gone through a time when the forces had become hollow, when that shaft of the spear, if you will, had rusted. President Reagan dealt with it decisively. He proposed two double-digit increases in the national defense, which the Congress sustained him on. And it was that action which was a key factor in winning the Cold War because the rest of the world saw America's commitment, America's willingness, America's strength, America's confidence in the future and eventually decided that freedom and democracy was the future of the world because we were leading in that direction. We were willing to make the commitment necessary to walk that path.

Let us do the same thing today. This is a bipartisan amendment. Senator Lieberman and I are offering it.

I have been handed a note that Senator Graham wishes to be added as a cosponsor.

I ask unanimous consent that he be added as a cosponsor.

We can do this.

Yes, we have to resolve the other problems in the budget that are causing the deficit, but defense is not that area. Defense has given at the office. Now it is time to tend to American security and American needs. For that reason, I offer the amendment. I hope the Senate will sustain it and support our men and women in uniform.

I yield the floor.

Sure.

The Senator is correct.

The function 920, as I understand, is essentially the overhead across the board from a number of different agencies. So it comes out of administrative overhead, travel, et cetera, and I believed that funding these essential programs for the military was more important than that. So I challenge the agencies to find that funding to support this amendment.

It is similar to what has happened in the past. We had several amendments last year that took substantial amounts out of function 920 in order to increase programs.

No. I am willing to ask all the agencies to sacrifice travel budgets and expenses in order to fund the national defense.

I say again, this has happened in the past to support other important programs. The Coleman amendment last year, for example, increased CDBG funding by $2 billion with a function 920 offset. I am telling the Senator what he knows. The Senator is an expert on the budget.

So we have gone into administrative overhead in the past, where necessary, to support important programs. I cannot think of anything more important than giving the President at least what he has asked for for national defense. This is a question of whether we will fund the national defense in time of war at the President's request, at least.

Who has the floor, Mr. President?

Again, I thank the Senator and admire very much the sincerity with which he confronts these budgetary problems.

Perhaps in view of the Senator's question, it would be good for me to emphasize the point I made during the speech. There are certain functions of the Government which, if we do not perform at least at a minimal level, have the opposite effect that people want when they seek to reduce the deficit. This is one of them. These bills must be paid, and the longer we wait to pay them, the more they will cost.

For me, it is deja vu all over again. I said this in the 1990s. We were successful as a Congress in the 1990s in the latter part of the decade in getting more money into the budget above what the Clinton administration requested, but we did not get enough in. So those bills which were not paid have accumulated, with compound interest, at very substantial amounts.

It is true that an increase which is slightly above inflationary rates, which would have been adequate if we had done it in the 1990s, is not adequate anymore. And if we do not do something of the nature I am talking about now--not just with this budget but next year's budget as well--then the bill will grow and grow and grow, and 2 and 3 and 4 years from now, it will be even greater. My friend and the Senator from New Hampshire are going to have an even bigger problem to confront in trying to deal with the budget deficit.

It is not an option to not sustain the national defense. To the extent America is perceived as weak, much less to the extent that America is weak, it promotes instability and conflict in the world. Apart from the threat to human freedom, I will say to those who are concerned about the budget, that is very bad for the deficit. That is really negative for the deficit.

Let us sustain the national defense. I encourage the Senator to continue working with his friend and my friend from New Hampshire to solve these other structural problems in the deficit and would be happy to support some bipartisan resolution. Let us not take it out on defense.

I yield the floor.

Will the Senator yield?

Given the time available, I did not speak as long as I could on this subject, but the Senator is referring to what the Pentagon calls resetting the force. In other words, after a war, we pay through the supplementals for the equipment that is actually destroyed. But a lot of the equipment is not destroyed; it is either left there or it suffers what a business would call accelerated depreciation. It comes back, but it only has a few years of useful life.

The Senator is correct, we have that bill to deal with, as well.

I think I had half an hour. How much time remains?

Mr. President, I will not take the whole 11 minutes. I will do the Senate that favor, anyway.

First of all, the Senator is tremendously knowledgeable about the budget. I respect very much what he is saying. I am pleased he recognizes the importance of the underlying thrust of the amendment. My understanding is the function 920 line has about $11 billion in it, so what I am calling for is a reduction of about a quarter in our overhead expenses, travel expenses. That has been done in the past in order to fund important programs.

We are in agreement that there is a shortfall in defense. Nothing is more important across the board right now than sustaining at least the President's request. I argue, and perhaps will argue further in this process, that we need to do a little more this year, but we should at least do this, and we can do this with a reduction in overhead that occurs all the time in the private sector. I think we should.

Now, the Senator mentioned various efficiencies we can use to make the money go further. I have been a strong supporter of those on the Armed Services Committee. I think there are efficiencies we can gain in terms of leasing and other kinds of measures. I would not want to leave the floor this morning leaving the Senate with the impression that is going to be enough to meet the obligations we have before us for national defense and national security.

Remember, we are talking about the security of our homes, our families, our jobs. Remember what the attack on 9/11 did to the economy. We just saw numbers about how revenues were off in the early part of the decade. Well, that was not unrelated to the fact we were attacked. I am not saying we would not have been attacked had we been stronger throughout the 1990s; I am saying that right now, we are too far out on a margin of risk. The further you go on that margin of risk, the greater instability, the greater the lack of confidence in the world, and that hurts our economy.

I said substantially the same thing a couple years ago when we were debating the highway bill. I was arguing in favor of bonding for infrastructure investment. Investment in defense, like investment in infrastructure, is not an optional expenditure of the Government. We have, if you want to look at it this way, a deficit in the national defense. As bad as the budget deficit is, I would argue the deficit in the national defense is worse because that deficit imperils both the national security and the economic security of the United States.

So we need to make some tough decisions. I agree with the Senator when he says that. We can at least take this decision now. This amendment is offered on a bipartisan basis. And this concern is bipartisan in the Armed Services Committee. When we had what we call our posture hearing, looking at the posture of defense, Senator Inhofe, Senator Dayton, Senator McCain, Senator Lieberman, and I all raised the issue of whether, going forward, we needed a structural increase in the national defense.

We are not asking for that here. We are not asking for that this year. We want to do a study of this issue. We want to look at it in a searching and bipartisan way and then report back, I hope next year-- early next year--to the Senate on what we need to do. But right now, we need at least to give the President what he has asked. I would hope we could find a way to go a little further than that in this budget and give the President what he asked for in the fall of 2004, before the Office of Management and Budget got at the Defense projections. That is why I am offering the amendment.

I very much appreciate the spirit in which the Senator has responded. I hope he can stretch a point and perhaps find a ``yes'' vote for this amendment, and then debate, in as bipartisan a fashion as possible, the other structural issues we are dealing with with the deficit.

I thank the Senate again, Mr. President.

I yield the floor.

I am very grateful.

Mr. President, I am more than happy to yield back.

Mr. President, I send an amendment to the desk.

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

Mr. President, I rise today to offer an amendment with my colleague from California, Senator Feinstein, to provide additional funding for the COPS Hot Spots Program.

I am grateful, also, for Senator Cantwell's work in this area and her commitment to provide additional funding to help our law enforcement officers in fighting methamphetamine. As my colleagues know, last week President Bush signed into law the most comprehensive antimethamphetamine legislation ever offered in the Congress, much less passed. I am pleased we were able to pass an initiative that is going to reduce the number of methamphetamine labs around the country and therefore the number of methamphetamine addicts and kids who are raised in settings where there are toxic meth labs. That legislation is going to reduce the number of fires related to methamphetamines but this is not a fight that is ever over.

Methamphetamine is the most deadly, fiercely addictive, and rapidly spreading drug America has ever known. The drug is not only sold and consumed in our neighborhoods--that would be bad enough--it is made there as well using a toxic process that combines cold medications with harmful chemicals such as iodine, ammonia, starter fluid, drain cleaner, and rubbing alcohol. The hazardous byproducts of meth production threaten the health and life of those making the drug, but also their families, the communities around them, as well as law enforcement officers who respond when somebody spots the meth lab.

These makeshift chemistry laboratories are found in homes, in hotels, even the trunks of cars. In addition to the risks of those around the labs, these kinds of laboratories create a huge amount of environmental waste. Cleaning up even one of the laboratories can cost $10,000 or more. That cost alone is devastating to the budgets of State and local governments around the country.

That is one of the reasons the National Association of Counties lists methamphetamine as the No. 1 problem counties are confronting.

Among the many provisions in the Combat Meth Act that was passed as part of the PATRIOT Act reauthorization last week is a provision that authorizes an additional $99 million per year for the next 5 years under the COPS Meth Hot Spots Program, which is a program designed to train State and local law enforcement to investigate and lock up meth offenders, and also to expand the funding available for personnel and equipment for enforcement, prosecution, and environmental cleanup. This additional $99 million is meant to supplement the $63 million that is already authorized under the Hot Spots Program.

I cosponsored an amendment with my colleague from Arkansas, Mrs. Lincoln, to restore full funding to that account. This assistance to State and local agencies has a national impact in importance.

I know many of my colleagues have seen firsthand the immense need for and benefit of this funding. State and local law enforcement personnel are fighting on the front lines in the struggle to stop drug trafficking. They need our help.

I urge the Senate to vote in favor of the amendment.

I ask unanimous consent that the following Senators be added as cosponsors: Senators Lincoln, Smith, Biden, Cantwell, Kohl, Harkin, Bayh, Wyden, Johnson, Dole, and Coleman.

Mr. President, as the Senate can see, methamphetamine is not a partisan issue. There is strong support on both sides of the aisle for fighting this drug and for this amendment.

I urge the Senate to support it.

Senator Feinstein has done great work in this area. I know she would like to be here to speak. I do not know if she will be able to get down to speak on it. I congratulate her again on her leadership in this field.

Mr. President, I send an amendment to the desk on behalf of myself, the Senator from Maine, Ms. Collins, and the Senator from New Jersey, Mr. Menendez, and ask for its immediate consideration.

Mr. President, this amendment will provide $6.3 billion to restore the cuts in key student aid programs, vocational education, and job training, and increase investment in those programs by 15 percent. That is the total: $6.3 billion. To pay for these investments, we close tax loopholes, laws that have no purpose, that allow corporate tax evasion. These offset provisions have been passed in the Senate on numerous occasions and have not survived the conference. But they have been voted on and passed. So this amendment effectively pays for itself. That is enormously important.

These two charts indicate where the United States is internationally in the areas of math and science. The chart on the right shows that the United States has fallen behind in mathematics, and this other chart shows that American colleges and universities have fallen behind in the development of professionals in the natural sciences. That is effectively math, science, and engineering. If you look at this chart, it shows that in 1975, the United States was third in the world. If you look at the year 2000, we are 15th in the world. Really, no one disputes these findings and these conclusions.

I once again draw the attention of our Members to three excellent studies. These three excellent studies, which have been done by the National Academy of Sciences, the Academy of Engineering, and the Institute of Medicine, all make the same case as these charts do and make a number of recommendations. We have included a number of the recommendations that these institutions which reviewed our education system have made in order that the United States continue to be a highly innovative economy in the next 15 to 20 years. They make the very strong and powerful case that by being an innovative economy, we are also going to be the strongest economic power in the world and also have the strongest national security.

Education is key to our national security. This is ``Rising Above the Gathering Storm'', the report by the National Academy of Sciences. That report was requested by our former Secretary of Education, Senator Lamar Alexander, and Jeff Bingaman. It is an excellent study and review. I am going to include just selected parts of these reports in my remarks.

And now we have the report from the Council on Competitiveness which has reached effectively the same judgment and decision as the National Academies report. The Council on Competitiveness talks about recommendations organized in three broad categories: education; training; and lifelong skill development, the continuation of training. That is exactly what our amendment addresses.

And then, finally, the National Association of Manufacturers--not known to be a particular Democratic organization--talks about the importance--again, these are studies that were completed in 2005--the importance of emphasizing science and math technology, including enhancing our education, career training, and continuing education and training programs.

These are exactly the programs included in our particular amendment that the Senator from Maine and I offer with the Senator from New Jersey. It is in response to the challenge we are facing internationally. We offset that by closing tax loopholes.

First let's talk about Pell grants. In this amendment, we have increased the maximum Pell grant to $4,500. As you can see, this has been frozen at $4,050 over the period of the last 4 to 5 years. There will be those who will say: Well, we have increased the total amount of funding because there are more children who are receiving the Pell grants. But the reason there are more students receiving Pell grants is because there are more students in need.

This amendment will increase immediately the Pell maximum

up to $4,500. This is not enormously inconsistent with what

the President has said. In his last two Presidential

campaigns, he has indicated that he favored the $4,500

maximum. The cost for this will be $1.8 billion. So this is

the increase in the Pell Grant Program.

The second aspect of this amendment is to open up access to educational opportunity by investing in the TRIO Program, the GEAR UP program, and the LEAP program. This amendment provides the additional help and assistance for those programs.

Let me show who is affected by these programs. Nearly 1.5 million students benefit from the tutoring, the counseling, and other services provided by the Gear Up programs in over 1,700 schools. This program keeps students interested in school and prepares them to attend college. It has been enormously successful in opening up opportunities for helping young children, many from disadvantaged communities, into the colleges and universities across our country.

The amendment also addresses the TRIO Talent Search and Upward Bound Programs, special programs to recognize talented young people who perhaps might not have had the range of courses in their high schools but, nonetheless, have demonstrated a commitment and a desire to enhance their own educational opportunities. The results have been absolutely extraordinary.

If you look at the difference in the success of students in these programs compared to students who don't participate, you will see that nearly 90 percent of the Upward Bound students graduate from high school, compared to only 68 percent of all low-income students.

You will also find that nearly 70 percent of Upward Bound students attend college, compared to only 54 percent of low-income students. And 50 percent of Upward Bound students attend a 4-year college, compared to just 22 percent of low-income students. So this is really about access to higher education. We are basically saying, with these reports, the United States needs every talented person in our country, and these programs help achieve that goal. We are offering an amendment that is going to open up that kind of opportunity for individuals to take advantage of and participate in this effort to maximize our ability to be competitive.

Next, there is an important aspect for us in this amendment, as it will invest in critical career and technical education programs. I have taken the figures from Massachusetts, but this is typical of what is happening around the country. We have a total of 61,000 students in career and technical education in Massachusetts, and about 90 percent of them pass what they call the MCAS test. That is a stringent test that our State has instituted and has been commended on for years as being the gold standard in terms of measuring the academic achievement of students. This is the continuing vocational education programs, and it amounts to $1.3 billion of the amendment.

What this does show is that individuals are gaining the skills they are going to need to compete in this era of globalization. About 90 to 95 percent of those who graduate from career and technical education programs in Massachusetts go on to college or get good jobs. This amendment invests in these programs that are critically important.

We have seen in the chairman's mark on the budget that with regard to discretionary spending in 2000, the chairman's mark includes the President's proposed level of $873 million. You will hear descriptions of how that provides additional opportunities to enhance education for young people. But the fact remains, we need a quantum jump in investing in young people. We need it in the areas I have outlined, and we need it in additional areas. This year the Chinese will be graduating 600,000 engineers, according to one report. India graduates 350,000 engineers. The United States is graduating 72,000 engineers, and half of those are foreign students. We have seen the expansion of research that is taking place in India, where Intel has just hired 2,500 Indian engineers to do some of their most advanced research. IBM is following a similar kind of program. We are talking about outsourcing and offshoring jobs, and we are not talking about blue-collar jobs. We are talking about those who are going to be at the cutting edge of investment.

What we are saying now is that we have to equip every young person with the ability to deal with the challenges of globalization. That means they are going to have to attain these kinds of skills for themselves. This is going to be a continuing learning process, and it has to be a national commitment.

This Nation has responded when it has been educationally challenged. When we had the Industrial Revolution, we developed the public school system. At the end of World War II, we had 10 to 12 million Americans serving in the armed forces who had given 3 to 4 years out of their lives. We had the GI bill. Those Americans came back and they participated in our educational system. What we found is that they repaid $7 for every dollar invested in them. When you are investing in education, the benefits to society are huge. They come back manyfold in terms of our prosperity and our world leadership. This is not a no-sum game. This is a process by which the Nation gains.

Then we were faced with the Sputnik challenge when the Russians sent Sputnik into space. Virtually overnight Republicans and Democrats came together and passed the National Defense Education Act. Many of those students who have gone through the National Defense Education Act Scholarship Program serve in our Defense Department today with great success.

Today we have a similar challenge with globalization. Are we going to say it is business as usual, as this budget says, or are we going to say this is serious business? In a budget that reflects a nation's priorities, are we going to say we are sufficiently concerned about this kind of challenge that we are not going to hold the young people behind by denying them the opportunity to deal with the challenges of global education? That is what the amendment is basically about. That is why we strongly believe in it. It is clearly in the national interest. It is a reflection of what the priorities are for the American people. The American people understand the importance of investing in students and workers. It is key to their prosperity. We cannot have a competitive economy with breakthroughs in innovation unless we have highly skilled, highly trained individuals. If you look over the various scientific magazines you see that in the last twenty years the U.S. share of research articles has declined from 38 percent to 30 percent. Meanwhile, China's share of articles more than doubled. Other countries are investing in their young people, and the United States can't afford to fall behind in this regard. The challenge to the Senate is whether we are going to begin that process of investing in the young people of this Nation or whether we are going to be an also- ran Nation down the line.

I will include in the Record the names of the more than 100 groups that support this amendment. I ask unanimous consent to print that in the Record.

The being no objection, the material was ordered to be printed in the Record, as follows:

100 Groups Support the Kennedy-Collins Amendment

Association of Jesuit Colleges and Universities.*

American Association of Community Colleges.*

Coalition of Higher Education Assistance Organizations.*

National Counci1 for Community and Education Partnerships.*

National Association of State Directors of Career and

Technical Education.

National Association for College Admission Counseling.

National Women's Law Center.

National Alliance for Partnerships in Equity and its 30

members: American Association of University Women,

Washington, D.C.; American School Counselors Association,

Alexandria, VA; Barre Technical Center, Barre, VT; Bismarck

State College, Bismarck, ND; Burlington Technical Center,

Burlington, VT; Cape Cod Community College, W. Barnstabe, MA;

Career Communications, Overland, KS; Center for Technology,

Essex, Essex Junction, VT; Cisco Systems, Inc., Annapolis,

MD; Cold Hollow Career Center, Enosburg Fall, VT; Douglas

County School District, Highlands Ranch, CO; Educational

Equity Consultants, St. Joseph, MO; Feminist Majority

Foundation, Arlington, VA; GrayMill Consulting, Tehachapi,

VT; Her Own Words, Madison, WI; MAVCC, Stillwater, OK; Mid-

Atlantic Equity Center, Chevy Chase, MD; Minot Public

Schools, Minot, ND; Missouri Gender Equity Program, Columbia,

MO; National Women's Law Center, Washington, D.C.;

Nontraditonal Career Resource Center, New Brunswick, NJ;

North Dakota Department of Public Instruction, Bismarck ND;

Northeast Community College, Norfolk, NE; Northern New

England Tradeswomen, Essex. VT; Patricia A. Hannaford Career

Center, Middlebury, VT; Project Lead the Way, Clifton Park,

NJ; Randolph Area Vocational Center, Randolph, VT; TALL, The

College of New Jersey, Ewing, NJ; Thompson Sohool District,

Loveland, CO; Tradeswomen Now and Tomorrow, Chicago, IL; West

Virginia Women Work!, Morgantown, WV; Wider Opportunities for

Women, Washington. D.C.; Williston State College, Williston,

ND; Women Work!, Washington, D.C.

PIRG Higher Education.*

US Student Association.*

The Workforce Alliance.

Student Aid Alliance (66 Members): American Association of

Colleges of Nursing; American Association of Colleges of

Pharmacy; American Association of Colleges for Teacher

Education; American Association of Collegiate Registrars and

Admissions Officers; American Association of Community

Colleges; American Association for Higher Education; American

Association of State Colleges and Universities; American

Association of University Professors; American College

Personnel Association; American College Testing; American

Council on Education; American Dental Education Association;

American Federation of Teachers; American Indian Higher

Education Consortium; American Jewish Congress; American

Psychological Association; American Society for Engineering

Education; American Student Association of Community

Colleges; APPA: The Association of Higher Education

Facilities Officers; Association of Academic Health Centers;

Association of Advanced Rabbinical and Talmudic Schools;

Association of American Colleges and Universities;

Association of American Law Schools; Association of American

Medical Colleges; Association of American Universities;

Association of Catholic Colleges and Universities;

Association of Community College Trustees; Association of

Governing Boards of Universities and Colleges; Association of

Jesuit Colleges and Universities; Citizen's Scholarship

Foundation of America; Coalition of Higher Education

Assistance Organizations; College Board; College Parents of

America; College and University Personnel Association for

Human Resources; Council for Advancement and Support of

Education; Council for Christian Colleges and Universities;

Council on Government Relations; Council of Graduate Schools;

Council for Higher Education Accreditation; Council of

Independent Colleges; Council for Opportunity in Education;

Educational Testing Service; Hispanic Association of Colleges

and Universities; Lutheran Educational Conference of North

America; NAFSA: Association of International Educators;

National Association for College Admission Counseling;

National Association of College and University Business

Officers; National Association of College Stores; National

Association for Equal Opportunity in Higher Education;

National Association of Graduate and Professional Students;

National Association of Independent Colleges and

Universities; National Association of State Student Grant and

Aid Programs; National Association of State Universities and

Land-Grant Colleges; National Association of Student

Financial Aid Administrators; National Association of Student

Personnel Administrators; National College Access Network;

National Collegiate Athletic Association; National Council

for Community and Education Partnerships; National Council of

University Research Administrators; National Education

Association; NAWE; Advancing Women in Higher Education;

United Negro College Fund; United State Public Interest

Research Group; United States Student Association; University

Continuing Education Association; and Women's College

Coalition.

*Also members of Student Aid Alliance.

I withhold the remainder of my time.

I yield myself 1 minute and then I yield 10 minutes to the Senator from Maine.

I quickly want to respond to my colleague from New Hampshire. When you say there was $9 billion in aid added last month to higher education, this includes 3.7 billion for a grant program that only helps ten percent of students who need it. Most of this $9 billion helps banks, not students. The $6 billion increase for the Pell grant that I supported and worked on with the Chairman of the HELP Committee was jettisoned completely in the Senate bill. Instead there was no additional grant aid for 90 percent of poor students, and this is at a time when 400,000 students would like to go to college, are ready to attend college, but can't because of cost. Now I will yield to the Senator from Maine.

Mr. President, how much time remains?

Mr. President, I yield 4 minutes to the Senator from New Jersey and 1 minute to the Senator from Maine.

How much time remains on either side?

The Senator from Maine, Ms. Collins, the Senator from New Jersey, and myself understand that we are facing a worldwide challenge. That is not just what we are saying; that is what the Academy of Sciences is saying, the Academy of Engineering is saying, the Institute of Politics is saying, National Association of Manufacturers, Council of Competitors. You can't do business as usual. The rest of the world is playing for keeps. The question is whether we will or not. When we faced the challenge of Sputnik, America responded and doubled its involvement in education. We are facing a worldwide challenge now, and we believe these investments will make sure we move toward the goal of maintaining the United States as No. 1. Anything else will put us behind.

I believe my time is up.

I thank my colleagues.

(The remarks of Mr. Kennedy are printed in today's Record under ``Morning Business.'')

amendment no. 3014

Mr. President, our dependence on foreign oil is sapping America's power and independence as a nation. It is urgent we begin now to diversify the fuels we use to power our vehicles or risk ceding our national power to the rulers of faraway deserts, distant tundras, steaming rain forests or off-shore, drilling platforms half a world away.

I rise today as part of a bipartisan group of 10 Senators who represent the American Northeast, South, Midwest and West to introduce the Vehicle and Fuel Choices for America Security Act.

We chose this title because nothing less than our national security is at stake.

Besides myself, the rest of the ``Gang of Ten,'' or the ``Energy Security Ten,'' as some call us are Senators Sam Brownback of Kansas, Evan Bayh of Indiana, Norm Coleman of Minnesota, Lindsey Graham of South Carolina, Ken Salazar of Colorado, Jeff Sessions of Alabama, Bill Nelson of Florida, Richard Lugar of Indiana and Barack Obama of Illinois. And we expect even more of our colleagues from both sides of the aisle will be joining us soon.

I hope that in the future we all look back on the day this bill was introduced as the beginning of a major shift in our national security strategy. I hope that history will say we saw a challenge to our national security and prosperity and then met it and mastered it.

A recent report by the International Energy Agency, IEA, sums up the urgent need for our legislation.

According to the IEA, global demand for oil--now about 85 million barrels a day--will increase by more than 50 percent to 130 million barrels a day between now and 2030 if nothing is done.

The industrialized world's dependence on oil heightens global instability. The authors of the IEA report note that the way things are going ``we are ending up with 95 percent of the world relying for its economic well-being on decisions made by five or six countries in the Middle East.''

Besides the Mideast, I would add that Nigeria is roiled by instability, Venezuela's current leadership is hostile to us and Russia's resurgent state power has ominous overtones.

In fact, we are just one well-orchestrated terrorist attack or political upheaval away from a $100-a-barrel overnight price spike that would that would send the global economy tumbling and the industrialized world, including China and India, scrambling to secure supplies from the remaining and limited number of oil supply sites.

History tells us that wars have started over such competition.

Left unchecked, I fear that we are literally watching the slow but steady erosion of America's power and independence as a nation--our economic and military power and our political independence.

We are burning it up in our automobile engines and spewing it from our tailpipes because of our absolute dependence on oil to fuel our cars and trucks.

That dependence on oil--and that means foreign oil because our own reserves are less than 1 percent of the world's oil reserves--puts us in jeopardy in three key ways--a convergence forming a perfect storm that is extremely dangerous to America's national security and economy.

First, the structure of the global oil market deeply affects--and distorts--our foreign policy. Our broader interests and aspirations must compete with our own need for oil and the growing thirst for it in the rest of the world--especially by China and India.

As a study in the journal Foreign Affairs makes clear, China is moving aggressively to compete for the world's limited supplies of oil not just with its growing economic power, but with its growing military and diplomatic power as well.

Second, today we must depend for our oil on a global gallery of nations that are politically unstable, unreliable, or just plain hostile to us.

All that and much more should make us worry because if we don't change--it is within their borders and under their earth and waters that our economic and national security lies.

Doing nothing about our oil dependency will make us a pitiful giant-- like Gulliver in Lilliput--tied down by smaller nations and subject to their whims. And we will have given them the ropes and helped them tie the knots.

We can take on this problem now and stand tall as the free and independent giant we are by moving our nation--and the world--on to energy independence, by setting America free from its dependence on oil.

There is only one way to do this. We need to transform our total transportation infrastructure from the refinery to the tailpipe and each step in between because transportation is the key to energy independence.

Barely 2 percent of our electricity comes from oil.

Ninety six percent of the energy used to power our cars comes from oil--literally millions of barrels of oil per day. This is unsustainable and dangerous.

The Vehicle and Fuel Choices for America Security Act aims to strengthen America's security by transforming transportation from the refinery to the tailpipe and each step in between, thus breaking our dependence on foreign oil.

We start by making it our national policy to cut consumption by 10 million barrels a day over the next 25 years.

First, we need to rethink and then remake our fuel supplies. Gasoline is not the only portable source of stored energy. Tons of agricultural waste and millions of acres of idle grassland can be used to create billions of barrels of new fuels.

Our farmers could soon be measuring production in barrels of energy as well as bushels of food.

Then we must remake our automobile engines as well. Vehicles that get 500 miles per gallon--or that use no refined crude oil--are within our grasp. I know that sounds unbelievable. I am going to tell you how we can do it.

To help us get there, our bill also requires that by 2012, 10 percent of all vehicles sold in the U.S. be hybrid, hybrid-electric plug-in or alternative fuel vehicles. That number will rise by 10 percent a year until it reaches 50 percent in 2016.

To help spur this market along, our bill amends our current energy policy to require that one quarter of federal vehicles purchased must be hybrids or plug-in hybrids.

My bill will detail how we can get there with available technology and previously unavailable Federal Government leadership. Coupling these new programs with the explicit oil-savings goals for the Federal Government is the key to the effectiveness of this proposal.

I can almost hear colleagues murmur, So, Senator Lieberman, what else is new? We've been hearing this for years and nothing has happened.

I can't blame you if you are skeptical. The struggle for oil independence has been going on at least since Jimmy Carter was President.

But things have changed since the days of Jimmy Carter and even since last summer. There is a new understanding of the depth of the crisis that our oil dependence is creating.

This summer's doubling of gasoline and crude oil prices hit tens of millions of Americans with the global reality of oil demand and pricing. And Hurricane Katrina reminded us how vulnerable our supplies can become.

This reality is bipartisan. And, along with my colleagues cosponsoring this bill, I think Americans are ready to set the serious goals that eluded us in the past and take the bold steps necessary to reach those goals.

Now let me give you more details.

The bill I will propose puts our Nation's transportation system on a new road--a road where the tanks are filled with more home-grown fuel-- and I do mean grown--not just American corn, but from American sugar, prairie grass, and agricultural waste.

We will push harder for more and quicker production and commercialization of biomass-based fuels.

The Energy bill signed into law last summer created a new set of incentives for these fuel alternatives, including their commercial production.

What my bill would do--again, by including a mass-production mandate for alternative fuel vehicles--is ensure that the investments would be made in the facilities to produce and market these new fuels by providing big demand for them.

The bill would also create a program to guarantee that filling stations had the pumps to provide the fuel to keep pace with the growing alternative-fuel fleet produced by the mandate.

Is there a model to give us confidence we can achieve this transformation? Yes.

Brazil is now enjoying substantial immunity from current high world oil prices, thanks to a long-term strategy, launched during the oil shocks of the 1970s, to integrate sugar cane ethanol into its fuel supply. They started initially with a mandate that all fuel sold in the country contain 25 percent alcohol. They are now up to 40 percent biofuels.

In addition to the fuel mandate, Brazil offered low-interest loans and tax breaks for the building of distilleries and subsidized a fuel distribution network.

Brazil has the advantage of a substantial sugar cane industry already in place. But we have our own vast potential to develop our own biofuel supply, using feedstock like corn, crop waste, switch grass, sugarcane and fast-growing trees and shrubs such as hybrid poplars and willows.

According to the Department of Energy, if two-thirds of the Nation's idled cropland were used to grow these kinds of energy crops, the result could be dramatic. Those 35 million acres could produce between 15 and 35 billion gallons of ethanol each year to fuel cars, trucks, and buses.

That is about 2.2 million barrels of fuel a day from right here in the U.S.A.

What Brazil offers us, more importantly, is a case study of government leadership to combine technology mandates and subsidies to wean its transportation sector from foreign oil to a domestic alternative.

From this January through this July--before this summer's fuel spike--we have sent almost $100 billion out of the country to purchase oil, while the Brazilians are now relying on home-grown fuel.

The key to their success is that they responded 30 years ago to the first storm warnings. We did not, and now the storm is at our shores, slapping against the levees of our economic strength and national security. We have to mobilize and lead a similar response as Brazil did.

If we do this right, our farmers could soon be measuring production in barrels of energy as well as bushels of food. Our energy would be guaranteed ``Made in America'' and the profits would be guaranteed ``Kept in America.''

For all these new fuels to be effective, we need the flexible fuel vehicles that can take advantage of them.

As I said earlier, our bill also requires that 50 percent of all vehicles sold in the U.S. be hybrid, hybrid-electric plug-in, or alternative fuel vehicles by 2016.

Sound ambitious? It is not. It has already happened in Brazil. Several automakers selling cars in Brazil, including our own General Motors and Ford, already manufacture a fleet that is more than 50- percent flexible fuel cars that can run on any combination of gasoline and biofuels.

The technology exists now and adds a negligible cost--about $150--to the price of each vehicle. For this we get the flexibility to power a car with fuel made from corn, prairie grass, or agricultural waste from our own heartland that will cost a lot less than gasoline does today.

Maximizing fuel efficiency and promoting energy independence even further would be a new generation of flexible-fuel hybrid cars known as plug-ins because you can plug them in at night to recharge the battery.

Hybrids that use a use both a gasoline engine and electric motor for power are already getting 50 miles per gallon. Making them flexible fuel cars, as I've already said, can save us more than 2 million barrels of gasoline a day.

But we can do even better--dramatically better--with the plug-in hybrid that is just now on the threshold of commercialization. Like the present hybrids, it would use both a gasoline and electric motor. But the plug-in hybrid would be able to use the battery exclusively for the first 30 miles of a trip.

Think of that for a minute. Although Americans drive about 2.2 trillion miles a year, according the Census, the vast majority of those trips are less than 15 miles.

That means a plug-in hybrid would use zero--zero--gallons of gas or any combustible fuel for the vast majority of its trips. And experts tell me it could effectively get the 500 miles per gallon on longer trips.

Plugging in your car during off peak hours--when power is in surplus and cheaper--would soon just become part of the modem daily routine, like plugging in your cell phone or PDA before you go to bed.

And off-peak electricity can be the equivalent of 50 cent a gallon gasoline, I repeat--the equivalent of 50 cent a gallon fuel is feasible.

Of course, electricity does not come magically through the wires to our homes. That power would come from coal, natural gas, nuclear, solar, wind or other sources--sources that we have in abundance here at home--and a little--very little--would come from oil.

This isn't pie in the sky. These vehicles could be in your garage within a couple of years. Some of the incentives for achieving this were included in the Energy bill signed into law in August. But they did not go nearly far enough.

We need to couple these incentives with real performance standards and sales requirements to ensure that as soon as possible new cars are running not just on gasoline but on biofuels and electricity.

As always, there is a do-nothing crowd that says the ever-rising price of gasoline and crude oil are the cure--that with higher prices people will reduce consumption and the market will respond with greater investments in the supply of oil to bring prices down.

But all that would do is perpetuate the problem. Market-driven oil- dependency is still dependency on foreign oil, driving us further down the current path toward national insecurity and economic and environmental troubles.

Some say that we can ease the crisis through greater domestic drilling--in places like the Arctic Refuge and other public lands or off our shores.

But that won't make a dent in the problem. In the world of oil, geology is destiny and the U.S. today has only 1 percent of the world's oil reserves. And that small new supply wouldn't matter much in the global market, since the price of oil produced within the United States rises and falls with the global market, regardless of where it is produced.

We just don't have enough oil in the U.S. anymore. And no matter how much more we drill, we will still be paying the world price of oil--not an American price.

Our present energy and transportation systems were born at the end of the 19th and the beginning of the 20th centuries with the twin discoveries of oil extraction and the internal combustion engine. Those systems have served us well bringing growth to our Nation and the world.

But it is now the 21st century, and it is time to move on. The era of big oil is over. It is time to revolutionize our entire energy infrastructure, from the refinery to the tailpipe, and begin a new era of energy independence.

It is time to set America free by cutting our dependence on foreign oil and by doing so strengthen our security, preserve our independence and energize our economy.