Comprehensive Immunosuppressive Drug Coverage for Kidney Transplant Patients Act of 2007

Mr. President, first, I thank the Chaplain for the most excellent prayer that he offered today. I think it set the right tone for today's discussions. I hope very much that while we may disagree strenuously, we can do so in a civil way. I thank especially the ranking member, Senator Gregg, for the way he has conducted this debate on the other side throughout. As is always the case with him, it has been thoroughly professional. It has set an excellent tone. We have vigorous disagreements on policy from time to time, but there are many areas where we actually agree. With him in leadership, it has always been done in a professional way. We especially appreciate the cooperation from all of our colleagues and especially from the ranking member and his outstanding staff.

The budget, as it stands at this moment, takes us in a new direction. It takes us back to fiscal responsibility. It takes us toward a balanced budget by 2012. Here is where the budget stands as of the latest numbers that we have after action last night. Every year of the 5-year budget the deficits will be reduced until we are in balance in 2012, albeit just barely.

The next chart. The debt under the budget resolution, the gross debt of the United States as a percentage of GDP, will finally start to head down instead of increasing year after year after year.

Under this budget resolution, the gross debt of the United States as a share of GDP will start going down in 2009. We will see a slight reduction in 2010. It is somewhat improved, in terms of reduction, in 2011 and 2012.

Spending under this budget resolution is going down as a share of gross domestic product--from 20.5 percent in 2008 down to 18.8 percent in 2012. So we have spending going in the right direction.

The budget resolution is only slightly above baseline for nondefense discretionary funding. The baseline is $438.8 billion. The spending in the 2008 budget resolution is $445 billion, a 1.4-percent difference. That is spending in dollar terms. I was talking about spending previously as a share of GDP. The previous chart showed spending as a share of GDP actually going down.

We do have a number of very significant priorities addressed in this budget. First and foremost is children's health care. We have up to $50 billion allocated over 5 years for children's health care to make possible the coverage for every child who would be eligible in the country. That is 25 times as much as in the President's budget for that same period.

We have also improved on the President's education numbers by 2008. In 2008, the budget resolution provides $62.3 billion compared to the President's budget for education of $56.2 billion for that year.

Another key priority is veterans health care. I am especially proud of what we have done. We have matched, or exceeded, the independent budget prepared by the Nation's veterans organizations. We have matched or exceeded it in every single category except construction, where the Veterans' Affairs Committee tells us they could not spend the amount of money in the independent budget because they simply could not let the contracts in time. In comparison to the President, we are at $43.1 billion for veterans funded, compared to the President's number of $39.6 billion.

On the alternative minimum tax, the old millionaires' tax that is rapidly becoming a middle-class tax trap, we prevent the number of people being swept up into the AMT from increasing from 3.8 million last year. If we didn't take action, that would increase to over 23 million in 2007. We prevent that increase from 3.8 million to over 23 million.

Similarly, in 2008, we prevent an increase to over 25 million people--largely the middle class--and to the upper side of the middle class from being caught up in the alternative minimum tax. That, by the way, is completely offset. Key priorities are the child health and family tax relief amendment. There is $15 billion in the budget resolution itself for children's health care. There is up to $35 billion in a deficit-neutral reserve fund. We also now in the resolution, after the Baucus amendment, extend middle-class tax relief.

We fully provide for marriage penalty tax relief, child tax credit, and the 10-percent bracket. We also provide for estate tax reform. Members will recall that we have this anomalous situation where we are going to go from $3.5 million of exemption per person under the estate tax in 2009--in 2011 it goes back to a million. We prevent that from occurring. So under the budget resolution, a couple could shield $7 million in assets without paying a penny of tax, and it is indexed for inflation.

The revenues in this resolution now, compared to the President's, are depicted on this chart. The green line is our revenues; the red line is the President's revenues. There is a difference of 1.8 percent now.

Seen in a different way, if you look back at what the President initially proposed for revenue, the President proposed $14.826 trillion of revenue. We have in this resolution almost the identical amount; we have $14.827 trillion.

So let me make clear that there is almost no difference in the revenue in this proposal compared to what the President initially proposed. Where would we get that slight difference in revenue? In the first place, there is no tax increase. We don't propose any tax increase in this budget resolution at all. I read some of the stories saying we have all these tax increases. We do not.

We do believe more revenue can be gained. The first place to go is the tax gap. That is the difference between what is owed and what is paid. In 2001 alone, the Internal Revenue Service tells us the tax gap was $345 billion.

Also, offshore tax havens. I have shown this picture many times. There is a five-story building in the Cayman Islands that is the home to 12,748 companies. Mr. President, this is a tax dodge. There are not over 12,000 companies doing business out of this building. They are doing monkey business out of this building. They are engaged in a massive tax evasion. This is the kind of thing we ought to shut down.

Another committee of Congress has told us that there is $100 billion a year--over $500 billion over 5 years--being lost to the U.S. Treasury to these offshore tax haven scams. We suggest cutting that off, stopping it, recovering that revenue. In fact, that would more than cover, by a substantial amount, the revenue difference between us and what is in the President's proposal.

Here is another example. This is a picture of a sewer system in Europe. What does a sewer system in Europe have to do with the budget of the United States? Unfortunately, a lot because wealthy investors and companies bought this sewer system in Europe, depreciated it on the books in the United States to reduce their tax in America, and then they leased the sewer system back to the European city that built it in the first place.

There are hundreds of billions of dollars involved in these tax scams. It is growing, and it is a cancer that has to be stopped.

This budget resolution also makes a beginning at addressing our long- term fiscal challenges. We have $15 billion in Medicare savings. We have major program initiatives to crack down on waste, fraud, and abuse. We have a requirement that tax cuts and new mandatory spending be paid for with a tough pay-go provision. We have a long-term deficit increase point of order. We have a ``save Social Security first'' point of order. We have a health information technology reserve fund. The Rand Corporation told us that alone could save $81 billion a year.

Finally, we have a comparative effectiveness reserve fund so that we go out and look at what are the most effective technologies and treatments in the medical area that work in one part of the country but have not yet been applied elsewhere. Health experts tell us massive savings could come from that initiative.

Let me end as I began. This budget resolution takes us in a new direction, a better direction. This is a budget resolution which restores fiscal discipline. It will balance the books by 2012; it will meet the high-priority needs of the United States; it fully funds the President's defense request and his request for war costs; it has major tax reductions for those in the middle class so that we assure that middle-class tax breaks continue. It also provides for estate tax reform and, at the same time, begins to address the long-term fiscal challenges facing our Nation.

I don't assert that this is a perfect budget. If I had a totally free hand, I am certain it would be different. But at the end of the day, the test for us is, can we write a budget for our country? In 3 of the last 5 years, there has not been a budget for the United States of America. Let me repeat that. In 3 of the last 5 years, there has not been a budget for the United States. It is our obligation and our responsibility to put a budget in place to begin the difficult task of balancing the books while meeting the priority needs of our Nation.

I thank the Chair and yield the floor.

Mr. President, might I say the Senator now has hurt my feelings. Would the Senator's staff put up the caveman chart? That now has hurt my feelings. I don't know how I am going to be able to get through the day after the caveman chart. I don't think that is even a good likeness of the Senator from North Dakota.

OK.

Mr. President, I think we now need to establish the order of the votes, or at least the first several votes, and for that purpose, I suggest the absence of a quorum.

Mr. President, I will not object. This, frankly, is a complicated amendment. I am not sure I fully understand all the implications or ramifications of it, but the basic notion that we try to make certain that reconciliation is used for deficit reduction is one I embrace and, in fact, one that is in the budget resolution before us.

We have a requirement in this budget resolution that reconciliation only be used for deficit reduction. The amendment of the Senator from New Hampshire is an attempt to send that signal even more clearly, if I understand it correctly, and the Senator can correct me if I misinterpret it. That is my interpretation, and on that basis I would accept the amendment.

Maybe we should explain what the term means. Reconciliation is a special process here in the Senate that gets around the regular order. It creates a superhighway to pass something. Reconciliation was designed and implemented to permit a fast-track basis for reducing deficits. Unfortunately, it can be abused and it has been abused in the past and used to actually increase deficits. That was never the intention.

We have prevented that from occurring in the budget resolution. So this is an attempt to prevent something that would have minimal deficit reduction from being used as a stalking-horse for a significant expansion of spending.

On that basis, I accept the amendment.

Mr. President, the Senator from Arkansas has an amendment, but do we have an order that indicates on every amendment that there be 2 minutes evenly divided and that there be no second degrees?

And do we have an agreement that there be no second degrees, but that we would reserve the right, based on the managers' decision, to have side-by-sides in any case where that is required? Do we have that as an order?

Mr. President, I ask unanimous consent that both those provisions be in order, that we have 2 minutes of debate equally divided on a vote, that there be no second degrees, that at the discretion of the managers there be the opportunity for side-by-sides, and that we order rollcall votes at this juncture on all those votes that are presented.

Mr. President, might I inquire of the Senator whether he will accept a voice vote?

Mr. President, I urge my colleagues to vote aye on the Brownback amendment.

Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 623

Mr. President, I send an amendment to the desk for immediate consideration. This is a technical amendment, agreed to by both sides.

Mr. President, this is to safeguard minority rights on a conference report. It was suggested by Senator Gregg and his staff. It is very well taken. It should be adopted.

Mr. President, I move to reconsider the vote and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 513

Might I inquire from the Senator how this works? Perhaps this is something we could accept, but I need to understand how it works. Could the Senator tell me, as I looked at the amendment, on the bottom of the first page there is a blank, at least in the copy I have. It says, ``For deposit of an additional amount into the account established under section 3113(d) of title 31, United States Code, to reduce the public debt''--and then there is a blank. Is that filled in on the amendment of the Senator?

I see.

Mr. President, I am constrained to resist this amendment because, as I understand it, what it does is, if the Appropriations Committee would cut in a certain area they would then be prevented from using that money in some other perhaps higher priority area. If there were savings in one area of the budget and Homeland Security needed additional funding, they would not be able to transfer the money.

On that basis I urge my colleagues to vote no.

Mr. President, that is not my reading of how this amendment would function. I wish I had more time to analyze it. This is the first time I have seen it so I am in a very awkward position here. That is my reading of the amendment, so I have no alternative but to ask my colleagues to oppose it.

The yeas and nays have already been ordered. I ask the yeas and nays be ordered on all these amendments so we don't have to go through that every time.

Mr. President, I ask unanimous consent that succeeding votes be 10-minute votes.

Mr. President, Senator Gregg and I have now visited about the number of outstanding amendments. There are over 60 outstanding amendments. We can do three an hour. That means, unless some of our colleagues relent, we are going to be voting for 20 hours. That is the simple math.

I ask my colleagues on both sides, please, if you can withhold on your amendment and wait for another vehicle, we urge you to do that. We simply cannot spend the next 20 hours voting.

Mr. President, the Senator from Kentucky has done us all a favor by the way he has modified his amendment. It is an amendment we can accept. I ask if the Senator could accept a voice vote.

Correct. We will need to insert that.

I ask unanimous consent that we accept the Bunning amendment.

We would like to proceed to Senator Dole for the purpose of offering her amendment.

Mr. President, we are prepared to accept the amendment of the Senator from North Carolina. We urge our colleagues to accept it.

I ask unanimous consent to agree to the amendment offered by Senator Dole.

Mr. President, next up is Senator Feinstein. She has an amendment.

I ask unanimous consent to adopt the Feinstein amendment.

Mr. President, next we have Senator Sessions to offer an amendment.

Mr. President, the Sessions amendment would increase taxes in fiscal year 2008 by $2.6 billion. It would increase taxes in fiscal year 2009, for a total in those 2 years of $11.7 billion of tax increases. In later years, the Sessions amendment would provide additional revenue loss of $148 billion over 5 years. That busts the budget and takes us back into deficit. It is sort of the worst of all worlds. It increases taxes in the front end and then blows a hole in the budget.

I urge colleagues to vote against the Sessions amendment.

I ask for the yeas and nays on the Sessions amendment.

Mr. President, next is the Nelson amendment. I say to colleagues, on the Nelson amendment and the succeeding Kyl amendment, there will be 6 minutes evenly divided.

Mr. President, I ask Senator Gregg to remind Senators of whom we have left in terms of what is the rest of the order.

Mr. President, there have been a number of statements about the previous amendments that are factually wrong. The previous amendment had a $5 million exemption per person, plus a top effective rate of 35 percent. My colleagues on the other side have misread the previous amendment. It had a top effective rate of 35 percent. I wanted to state that for the Record.

The fundamental difference between the two is that the previous amendment was paid for. This amendment, by Senator Kyl, whom I respect, is not paid for. I would say to my colleagues, if this is a priority, why not pay for it? The hard reality is that if this amendment before us now is adopted--the Kyl amendment--it blows a hole in the budget, puts us back into deficit, after we have worked so hard all these hours to get a balanced budget by 2012. This proposal would put us back into deficit by over $15 billion in 2012. It would add $35 billion to the deficit.

I urge my colleagues to reject this amendment. In the previous Baucus amendment, we provided for all of the middle-class tax cuts and fundamental and significant estate tax reform. It was paid for. This amendment is not. It ought to be rejected.

The Senator is wrong. I know why the Senator is reading it to conclude that. My tax experts tell me that the way the interactive effect occurs, the top effective rate is never more than 35 percent. I know why the Senator is reaching that conclusion. I would be glad to have my tax counsel visit with him because they assure me that in the previous amendment, the top effective rate was 35 percent. I know the Senator agreed about the 5-percent surcharge. I think time has expired.

Mr. President, Senator Gregg has indicated repeatedly that the 10-minute votes are just not being abided by. The only way they can be abided by is, No. 1, if people stay in the Chamber or very close to the Chamber. We are not going to finish this resolution unless we change the way we are doing business. We still have dozens and dozens of amendments remaining. We are going to be here until 1 o'clock this morning unless we change the way we do business.

I have to ask the leadership if they will support going to 10-minute votes.

Does the leadership support that request?

No, we have gone over.

Will the leadership support us going to 10-minutes votes?

Then the word has to go out that we are going to 10- minute votes.

I have to try to make amends on a previous debate. Senator Kyl indicated on the Nelson amendment that it appeared to be higher than a 35-percent rate. There was reason for him to believe that, looking at the amendment. I want to make clear that while we believe the Nelson amendment had a top effective rate of 35 percent, just looking at the amendment, one could easily conclude that is not the case. So I want to make that clear. In no way were we denigrating Senator Kyl's honor with respect to accurately and honestly depicting that amendment.

Mr. President, we are making progress, but we are not making progress fast enough. If we stick to this current pace, and people insist on the number of amendments that are still outstanding, we are going to be here all night. Staff just informed me that is the reality.

Please, if you can withhold and offer them on a separate vehicle, do that.

Senator Allard is next.

Mr. President, this amendment, if it were adopted, would cut Medicare and Medicaid by $58.8 billion. It would cut the Homeland Security Committee by $5.8 billion. It would cut the Agriculture Committee by $3.6 billion.

Beyond that, Mr. President, the pending amendment is not germane. Therefore, I raise a point of order that the amendment violates section 305(b)2 of the Congressional Budget Act of 1974, and I urge a ``no'' vote.

Mr. President, the next amendment is the Smith amendment.

Let me just say we have to get colleagues to cooperate a little more on reducing the number of amendments they are insisting on or we are going to be here late into the night. That is just what the reality is. Please, colleagues, withhold.

Senator Smith is next.

Mr. President, we would be pleased to accept this amendment on a voice vote.

If objection is heard--Senators can vote however they think is the right way. We certainly always have that right; Senators always have that right.

On this side, I urge Senators to vote aye.

Mr. President, Senator Gregg and I have worked through a number of amendments, and I will now send that package to the desk and ask that the amendments be agreed to, and the motions to reconsider be laid on the table.

The list of amendments includes: Lieberman-Collins No. 519; Burr No. 499; Biden No. 528; Thune No. 546; Kennedy No. 602; Chambliss-Feinstein No. 619; Reid-Sanders No. 490; Kerry-Sanders No. 616; Webb-Warner No. 620; Kerry No. 615; and Graham No. 614.

Mr. President, next we go to the Thomas amendment.

Mr. President, did the desk get that?

On this next amendment, Senator Stevens and Senator Inouye are paired?

Mr. President, this amendment, while well intended, would create a serious problem for the body. This amendment prevents the Appropriations Committee from reporting a bill with more than one type of emergency designation. Let me give my colleagues a concrete example. Last year Congress enacted an appropriations bill that included funding for the war effort in Afghanistan and Iraq, as well as disaster relief for the gulf coast. This amendment would prevent that kind of legislation. That would reduce the effectiveness and efficiency of this Chamber already noted for lacking efficiency. I urge my colleagues to vote no.

Mr. President, we thank the Senator from Pennsylvania for the alterations he has made to this amendment. It is acceptable on this side.

I ask unanimous consent we agree to the amendment.

Mr. President, the Senator has reserved the right to object.

Mr. President, the fact is, none of those rates change until 2010, No. 1. No. 2, the Senator's amendment also would not have the effect described by the Senator. The effect the amendment would have is to reduce revenue by $117 billion. It would put us back into deficit in 2012 by $71 billion. This amendment is a budget buster.

I urge my colleagues to vote no.

Mr. President, let's make certain we have the modified version of the Specter amendment. So before we approve that, let me have a chance--it has gone through a number of modifications. Let's make sure the version at the desk is the version we have been advised is at the desk.

OK. That is fine.

Mr. President, the reality of the budget resolution is this may not have anything to do with eliminating the alternative minimum tax. The one thing it will do is reduce the revenue of the Government over the next 5 years by $533 billion, plunging us right back into deficit. Look, we can deal with the AMT. We have dealt with it in the underlying budget resolution for the next 2 years. There will be no increase in the number of people affected by the AMT for the next 2 years under the budget resolution, and that is paid for. Unfortunately, this amendment is not paid for. It would plunge us back into deficit. I urge my colleagues to vote no.

Madam President, next, we are going to go to a Bingaman amendment. He will discuss it briefly, and we will have a colloquy.

I yield to Senator Bingaman.

Madam President, I would have to resist this amendment in its current form because it requires directed scoring. It requires the Congressional Budget Office to score something in a way mandated by Congress. I think that is a slippery slope. I don't think that is the way we want to go. We don't want to start requiring CBO to score things in a certain way. That would impede the impartiality of the CBO.

We are happy to work with the Senator to try to find other ways to address the concerns he has expressed in this amendment.

Madam President, Senator DeMint is next.

Madam President, I urge colleagues to resist this amendment. If we want to blow a hole in the budget, this is the way to do it. We have already addressed dramatic, important estate tax reform. This completely eliminates the estate tax and blows a total hole in the budget.

I urge my colleagues to vote no.

Madam President, I ask for the yeas and nays.

Mr. President, I begin by returning the courtesies of the chairman and doing it with sincerity. The chairman and his staff have been gracious and fair with us and, obviously, they are always professional. It is a pleasure to work with him and his staff.

We do, obviously, have philosophical differences, but hopefully it is a reflection of how this place should work, which is we do it professionally, we don't game each other, we don't yell at each other-- sometimes we yell at each other--we basically air our views, make our points, go to our votes, and allow everybody to get their 2 cents in. That is the way this place should work, and it works because the chairman is courteous enough to allow us to accomplish that. I thank him for that and his

staff. They have done a great job here, as well as mine.

I do agree the country needs a budget. That is critical. But regrettably, the budget he has brought forward is not a good budget for this country. It is a budget that is inconsistent in many areas, but at its essence is the fact that it spends a lot more money, grows the size of the Government, increases taxes a great deal, increases the debt a great deal and, regrettably, does not address the most essential issue we face today, which is the fiscal meltdown this country is going to face when we put on our children the cost of the Government as we head into the retirement of the baby boom generation.

This chart reflects that situation. It is a little outdated because it was done earlier, and we don't have a chart machine like the chairman, but it essentially captures the concept that this budget has $700 billion in tax increases. That is the one number which is wrong on this chart because of the Baucus amendment being adopted--$700 billion of tax increases. That is the largest tax increase in the history of the country. There is $144 billion minimum in nondefense discretionary spending, $2 trillion of new debt, and it does nothing in the entitlement area.

The inconsistencies in this budget are palpable. In the tax area, for example, this budget, as I mentioned, will be the largest tax increase in the history of the country and will take us down the road toward what is essentially a European tax system where essentially we are going to be looking at a total tax burden on the American people that will head toward the tax burden of the nation of France. When this budget reaches its end, it will be about a 19-percent to 19.5-percent tax burden on the American people. Historically, the Federal Government tax burden has been about 18.2 percent. That is a huge increase.

The chairman holds up these charts which show the lines are very close between the President's tax increases and his tax increases. But his tax increases, as he says, recalculated now are about 2 percent higher than the President. Two percent is real money when you are talking a base of $3 trillion. In fact, 2 percent represents approximately a little more than a quarter of a trillion dollars in new taxes above what the President would have suggested.

Those are huge tax increases which the American people are going to have to bear. The concept that keeps being put out here, that these are not going to be tax increases, that they are going to be found behind a curtain somewhere, is simply not defensible. It doesn't pass what I call the duck test. It is ducking the issue, basically. But it doesn't pass the duck test; that is, if it looks like a duck, walks like a duck, and talks like a duck, it must be a duck. When you put $700 billion of new taxes into a budget, you are talking about raising taxes dramatically, you are talking about increasing taxes on working Americans dramatically, and that is what this budget does.

In the pay-go area, this budget is also totally inconsistent. It says we are for pay-go. In fact, pay-go has become a solemn oath of the other side of the aisle. I read a New York Times editorial the other day that says pay-go is wonderful. Somebody tell the New York Times that the Democratic leadership, under this budget, has exempted most of their favorite programs from pay-go. They have pay-go for programs that maybe the Republican side of the aisle would support, such as not allowing taxes to increase--yes, they apply pay-go to that issue. But when they have their programs they think are important, they don't apply pay-go to it. In fact, they specifically exempt it. For example, the agriculture language is exempted from pay-go. It looks as if SCHIP may be exempted from pay-go. The Baucus tax proposal which came to the floor was exempted from pay-go. The AMT amount in this bill is exempted from pay-go. The simple fact is, pay-go has become Swiss cheese-go under this bill. There is no relevance at all because it is an arbitrary effort to keep one side from doing what they philosophically agree with while the other side ignores it or basically overrules it for what they like to do.

The argument is that they haven't increased spending that much. Well, $144 billion in nondefense discretionary spending is a lot of money when you put it on top of the base. That is a big number. At least in New Hampshire it is a big number. I mean, $144 billion would run the State of New Hampshire for probably 20 years. Yet they claim it is not a big number.

Then there is no talk again of the inconsistency in this, there is no talk about the fact that there are over 27 reserve funds representing a $200 billion cost in new programs should they be instituted. That is a growth of the Government--which, I am sure, not all of those will be instituted, but the game plan is there to institute them--$200 billion of potential expansion in the size of the Government.

They take the position that they have added other programs by using the 920 account. There was an interesting debate yesterday where the chairman of the committee said to the Senator from Minnesota: We can't use 920 to address the extension of renewable tax credits relative to wind energy and issues such as that because that would cut veterans and it would cut health care and education. But he failed to mention to the Senator from Minnesota that there was already about $38 billion of the 920 account in here. Mr. President, 920 is a euphemism for, well, we really don't know how we are going to pay for this, so we are going to use the 920 account, and that is allegedly a cut across the board. So there is another $40 billion of spending in this bill that probably, in the end, is going to occur and not get paid for.

There are huge expenditures, huge expansion in the size of the Government, tremendous growth in the size of the Government in this bill.

Then we have entitlement accounts. The chairman of the committee continues to allege he has $15 billion in entitlement savings in this bill. That is an impossible statement to make unless you are only willing to look at one part of the bill because in the other section of the bill, they spend $50 billion in new entitlement programs. So you can't claim you are saving money when you are expanding entitlement programs and not net the two out. It is totally inconsistent.

This bill expands entitlement spending. It does not restrict entitlement growth. Ironically, it does it in a way that makes those programs probably not subject to pay-go when they are expanded.

This is the biggest failure of this bill. The spending is pretty bad and the taxes have improved a little, but basically this is the biggest failure of this bill, the failure to address what the chairman has talked about--I agree with his discussions, I agree with his hearings-- has talked about the most severe problem we face as a nation; that is, the fact that when this baby boom generation retires, this Government becomes unaffordable for our children. The cost of three major entitlement programs--Social Security, Medicare, and Medicaid--will actually exceed the total Federal Government cost as a percentage of gross national product by 2025, and we will have nothing available to do anything else or, alternatively, will have to tax our children into oblivion so they cannot enjoy a quality lifestyle. Yet this bill does nothing on that.

We offered a reasonable amendment on this subject. We suggested that people earning more than $80,000 as individuals and $160,000 jointly should not be subsidized in their drug benefit by people working in restaurants across this country or working at gas stations or working on assembly lines, and it was rejected by the other side of the aisle.

We suggested that hospitals and provider groups that are getting an inflated payment under the COLA by about 1.2 percent should have that inflated COLA payment reduced by about half. They will still be getting an extra half a percent, six-tenths of a percent in benefits, and that was rejected.

If either of those had been accepted, we would have moved toward some semblance of getting under control this outyear instability in our Medicare fund. Those two amendments would have done more to make Medicare solvent than anything else we could do around here and thus make it available to seniors when they retire and have our children able to afford it. But that was rejected. There was no action at all in that area.

The tax issue--have to come back to this issue. The idea that there is not a

tax increase in this bill is so patently absurd on its face that the first amendment out of the box offered by the Democratic leadership was to extend the tax cuts for certain tax cuts they felt they didn't want to have go up, and the reverse of that, of course, is they are willing to let the other tax cuts go up. That is obvious. That is just A follows B or 1 and 1 makes 2. So there is no question they are taxing.

This idea that there is a comparison between the President's numbers and their numbers in tax increases, again is a total inconsistency. They use OMB to score the President's numbers and they use CBO to score their numbers. But if we score it apples to apples and oranges to oranges, we see the difference is significant. This was calculated before the Baucus amendment was adjusted, so these would be adjusted down somewhat, but the differences are still significant, somewhere in the range of $250 billion of difference if we compare apples to apples and oranges to oranges.

When we peel everything away from this bill--I understand we are going to start voting at 9:30--all these inconsistencies, the fact that they don't use pay-go for programs they like but they do apply to positions which the Republicans might take, the fact that the tax increase in this budget is the largest in history and yet they claim there is no tax increase, the fact that the spending goes up dramatically and they claim spending doesn't go up, the fact that there is virtually--there are no savings in entitlements on a net basis and there is actually significant aggravation of the cost of entitlements for our children in this bill as a result of new programs which they anticipate, this bill is going to do significant damage to our economy, and it is going to grow the Government and make us larger.

It comes down to a very simple fact, really, when we take everything away: This bill essentially is a classic Democratic tax-and-spend bill. That is all it is. Bigger taxes, bigger spending, bigger debt, larger Government, and as a practical matter, it is not going to be a constructive event for us as a nation. So I hope my colleagues, when we get to final passage, will vote against it. We are going to have a lot of votes here, but in the end, what is going to pass, if this bill passes, is your classic tax-and-spend bill.

Mr. President, I believe we are supposed to start voting at this time.

I think this is actually the likeness of somebody from Nevada.

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

Mr. President, I send an amendment to the desk, and I ask that it be reported.

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

Mr. President, I ask unanimous consent that the amendment be accepted.

Mr. President, I say to the Senator from North Dakota the purpose of this amendment is to make it absolutely clear we do not make reconciliation a stalking-horse to spend money. You have to use it to reduce the deficit.

Mr. President, I suggest we do this amendment on a voice vote, and I ask unanimous consent that be the case.

I ask unanimous consent the amendment be adopted.

Mr. President, I agree with the Senator from North Dakota. I would note, in our batting order, we have Senator Bunning on Social Security, Senator Dole on IRAs for soldiers, Senator Allard on mandatory spending, Senator Smith on SCHIP, Senator Thomas has one on extraneous items in the supplemental.

Then we will have, potentially, Senator Grassley and--Senator Sessions on AMT first. Then Senator Hatch is going to get in here. We are going to get Senator Hatch taken care of. That is the lineup on our side so people have some type of idea.

Mr. President, in my statement earlier, I failed to mention we have an agreement that Senator Kyl's vote will come before 11 o'clock.

Unfortunately, it is not whom we have left, but it is what the order is. I wish it was what we had left. Anyway, we go to Senator Nelson and Senator Kyl, which are under a prior agreement to have both those votes before 11 o'clock; then Senator Hatch, Senator Allard, Senator Smith, Senator Thomas, Senator Specter, and Senator Graham on our side. We are picking up other people as they come along and ask for time. That is the order now. All those will require votes potentially.

Mr. President, I ask for the yeas and nays.

Mr. President, I wish to make a point. I have talked to the chairman and this will be a 10-minute vote, not a 15-minute vote. From here on out, they will all be. Anybody who is not here, you are going to miss it.

Mr. President, for the information of Members on our side, the amendments, as they are presently lined up, are Senator Hatch, Senator Allard, Senator Smith, Senator Thomas, Senator Specter, Senator Graham, Senator Grassley, Senator Lott, myself, Senator DeMint, and Senator Thune.

Amendment No. 508

Mr. President, I note on this amendment, when we get into the rollcall, Senator Stevens and Senator Inouye wish to be deemed as paired.

Mr. President, was the last vote announced?

Then I believe we are going to Senator Specter.

Maybe we should move on.

Mr. President, I ask unanimous consent that this amendment be set aside and that we move to the amendment from Senator Graham, who would be next.

Mr. President, I ask unanimous consent that we agree to the Specter amendment No. 613 and the Thune amendment No. 465.

That is correct.

I renew the request, Mr. President.

I ask that amendment No. 465 be reported.

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

Mr. President, I ask unanimous consent that the amendment be agreed to.

I believe Senator Grassley has the next amendment.

Mr. President, I am glad we are having the debate about the death tax. I regret the amendment I proposed a couple days ago was voted down. There were some suggestions it was because of the capital gains and dividends provisions that were tied to it. So I brought an amendment back with Senator Thune that would eliminate the capital gains and dividends part of it and simply have us vote, along with one education tax credit, for real reform to the death tax.

Now, I want my colleagues on the Democratic side to appreciate--and I have certainly appreciated working with all three of them.

Thank you, Mr. President. I prefer not to be raising my voice, but I cannot hear myself.

Let's understand what voting for the Democrat ``cover'' amendment would do. First of all, when we had a $5 million exemption we were talking about last year, all of the groups came to us and said: You have to index it for inflation or pretty soon it will not mean anything. The Kyl-Thune amendment is indexed for inflation, the $5 million exempted amount. The amendment that is being proposed on the Democratic side is not indexed for inflation, and you will hear from groups such as the Farm Bureau and the NFIB and other groups that understand it has to be indexed for inflation.

Secondly, you say the rate is 35 percent, but there is a surcharge for ``large'' estates. How are they defined? They are not defined. A majority of Americans, according to surveys, say rates above 35 percent are confiscatory. So the 40-percent top rate in this Democratic proposal is going to be a big problem for a lot of Americans, both those who have to pay and those who do not have to pay.

Finally, with respect to the idea this is paid for, appreciate the big expenses for estate tax are after the year 2011. So it is folly to say this is paid for. Yes, you will have raised taxes by about $60 billion to ``pay'' for this for the 5 years covered by the budget, but the reality is, it is not going to be paid for in the future.

Do you know what. All of us--the Senator from Arkansas, the Senator from Nebraska, the Senator from Louisiana, and other Senators on the Democratic side--have in the past appreciated the fact that when it comes to death tax reform, we should not raise taxes on some taxpayers to provide this relief for the people who have to pay the death tax.

The reality is, we should not have to raise money from one group of taxpayers to pay for the relief granted to this group. The reality is probably it is going to be the same group of folks.

So I say to my friends who would want to suggest this is a ``cover'' amendment, that they can be just fine on this issue of death tax if they will vote for the proposal that is before us right now. That is not the case. If you want the real cover, that is to say the appreciation of the American people, reserve your aye vote for the Kyl- Thune amendment which will come next.

Thank you, Mr. President. I appreciate my colleagues not supporting this proposition. There are two main--

I am sorry, Mr. President. I thought my amendment was at the desk. It is pending.

There are two main differences between the amendment that was just rejected and the one which I hope we will all support. The first difference was that the $5 million exempted amount for estates was not indexed

for inflation. In the Kyl-Thune amendment, it is indexed for inflation. I think if you will all check with your folks, you will find they want this indexed for inflation.

This is a little like AMT. At first it didn't hit very many people, but after awhile, it begins to hit a lot of people, primarily because of inflation. The same thing will occur here. The whole point of an exemption is so people would not have to worry about spending all the money on insurance and lawyers and accountants, and so on, to plan against the estate tax. That is why you want an exempted amount such as the $5 million, but it is important it doesn't get eroded over time. Again, one of the key differences between the amendment that was just rejected and this amendment, which I hope you will support, is this amendment is indexed for inflation.

Secondly, most Americans believe that a 40- or 45- or 50-percent rate is confiscatory.

The other difference between the amendment that just failed and the one I hope you will now support is that the maximum rate under this is 35 percent. I still think that is too high.

The amendment just agreed to had a maximum rate of 40 percent. I think 35 percent is too high, if you look at the various polls that have been taken. In any event, that is the maximum rate under this amendment. It has been supported by a bipartisan group on both sides of the aisle, which is why we sit at 35 percent, because the reality is that in order to have the estate tax reform, we are going to need a bipartisan coalition.

My concluding remarks are to reach out to my friends on the other side of the aisle. My final plea is that we can demonstrate in a bipartisan way by supporting this amendment, which has enough flexibility in it because it is a budget amendment rather than a specific proposal, to accommodate nuances that Members on both sides of the aisle would like to see in estate tax reform.

The time for reform has come. Adopting this amendment will make that point in a general way. Then we can sit down and work together to try to work something out that we can get passed. I would appreciate our colleagues expressing support for death tax reform by voting aye on the Kyl amendment.

Mr. President, how much time remains?

I would like to make sure my colleagues don't think I was misstating a fact. The top effective rate is 35 percent, but there is a 5-percent surcharge on the largest estates. Am I wrong in that?

Mr. President, I ask unanimous consent for the yeas and nays.

Mr. President, I thank the chairman for his remarks. I appreciate

it. Certainly, I knew there was no attempt to suggest that I was misrepresenting. I try to read things very closely. This is one of the situations where apparently it could have been read both ways.

I appreciate the comments of the chairman.

Mr. President, the amendment the majority leader and I are offering today is the first step in our effort this Congress to undo a fundamental unfairness that affects over 300,000 disabled veterans in this country who also happen to be military retirees. In short, this amendment creates a reserve fund that will allow this Congress to once and for all eliminate the offset that exists between military retiree pay and VA disability benefits.

At a time when we have men and women in harm's way in Iraq, Afghanistan and in other locations around the globe, it is appropriate that the budget resolution we pass out of the United States Senate acknowledge and seriously address the unmet needs of our Nation's veterans.

It is wrong that our veterans are enduring long waiting lines to receive health care from the VA due to inadequate funding. It is wrong that the Bush administration slammed the doors of the VA health care system on hundreds of thousands of so-called ``higher income'' veterans--veterans who in reality make as little as $28,000 a year. And it is wrong for this administration to try to impose higher copayments and enrollment fees on our veterans. As someone who sits on both the Budget Committee and the Veterans Affairs Committee, I am incredibly proud that on all these issues, this budget resolution is on the side of veterans and rejects administration proposals that short-change and nickel and dime those who have served.

The scandal at Walter Reed has highlighted that even here in Washington, only a short distance from this chamber, some of our servicemembers were living in sub-standard conditions with moldy walls, rodents, and holes in the ceilings. Thankfully, this budget resolution also addresses this outrage.

In addition, this budget resolution also provides for substantial, new investments in mental health services for our veterans to help us treat the thousands of veterans returning from the Iraq War with Post Traumatic Stress Disorder, PTSD. Also this budget resolution recognizes that we need to significantly increase funding to treat the large number of servicemembers returning with traumatic brain injury.

Finally, this budget resolution includes an amendment I added in committee that will allow us to make other important improvements to veterans' programs later this year. In short, the budget resolution we are considering is a huge step in the right direction when it comes to veterans' health care and benefits. Chairman Conrad and his staff deserve tremendous credit for recognizing the very serious needs of our veterans and moving boldly to address them. I also want to commend Chairman Akaka of the Veterans' Affairs Committee and his staff for their work and support throughout this budget process.

Even with the tremendous strides forward we have made for veterans in this budget resolution there is one additional issue that needs to be addressed. Today, Senator Reid and I are offering this amendment to take care of that very important issue. Before getting into the details first let me start off by saying that I am honored to be working with the majority leader on this issue. I know that, year after year, he has been the leading voice in the Senate to eliminate the Disabled Veterans Tax. And today, he continues that leadership with this amendment.

This amendment would create a reserve fund to allow for the elimination of the remaining offset between military retiree pay and VA disability payments. In my view, this is an issue of basic fairness. Military retirees earned their retiree pay based on their long-term service to the Nation. They earn their VA disability benefits based on the disability they acquire or aggravate in the service of their country.

The current offset between these separately-earned benefits originates from a 19th century law that required a dollar-for-dollar offset of military retired pay for VA disability compensation. In my view and the view of millions of veterans across the country, it is clear that veterans deserve to receive both their military retirement which they receive for their service and their VA disability payments as additional compensation for the injuries and lost earning power due to their service-connected disabilities.

Let me provide just a bit of background on some of the progress Congress has made on this issue in recent years, thanks in large part to the work of Senator Reid. In the fiscal year 2003 Department of Defense Authorization, Congress created a special benefit called ``combat-related special compensation'' or CRSC. It expanded it in the fiscal year 2004 DoD Authorization. CRSC gives certain combat disabled veterans a cash benefit equivalent to what they would receive if full concurrent receipt were allowed.

In the fiscal year 2004 DoD Authorization bill, Congress approved phasing-in concurrent receipt for military retirees rated as at least 50 percent disabled. The fiscal year 2005 DoD Authorization ended the phase in for 100 percent disabled veterans.

So, today we find ourselves in a situation where retirees who are less than 50 percent disabled are getting no relief from the Disabled Veterans Tax and veterans at least 50 percent disabled but less than 100 percent disabled are in the middle of the phase period that will not be complete until 2014. Frankly, if Congress has made the determination that the ban on concurrent receipt of military retiree pay and VA disability compensation is wrong--and I think the legislation passed so far demonstrates that Congress has made that determination--there is no excuse for making veterans wait for the benefits that we have acknowledged they are due. Now is the time--once and for all--we need to eliminate the disabled veterans tax.

The Reid-Sanders amendment is just one important step we need to take to

keep faith to the promises we made to our veterans. I look forward to working with the majority leader on this issue as it moves through the legislative process and I would ask that my colleagues to support this amendment.

Mr. President, as ranking member of the Senate Committee on Small Business and Entrepreneurship, I rise to draw attention to funding for our Nation's small businesses, which has systematically declined over the last 6 years and is inadequate in both the President's budget and this budget resolution before us. I first commend my colleage, Senator Kerry, for working with me on this bipartisan amendment to restore this critical funding for small businesses.

This amendment would restore $97 million in funding to the Small Business Administration, an agency that contributes substantially to our economic growth. Since 2001 the SBA's overall budget has declined by an unacceptable 31 percent. Especially when one considers that small businesses are the backbone of our economy, breathing life into areas once devastated by manufacturing closures, disasters, and economic recessions, it is frankly beyond me why we continue to shrink the resources that actually help our Nation's job creators grow.

Just last month, I heard firsthand from over 90 Maine small business manufacturers about the barriers that hinder their success and the programs that have helped manufacturers grow and expand their business like the SBA's 504, 7(a), SBDC and HUBZone programs. However, this budget falls short of providing the very programs that have helped revitalize Maine's and our Nation's communities devastated by over 20,700 manufacturing job losses since 2000.

This amendment is about the 25.8 million small businesses and small manufacturers across the country, which are vital to the economic growth and job creation in each of our States. In every State, small businesses are the engine that drives our economy. Small businesses use SBA loans to expand and hire new workers; they receive vital advice from Women's Business Centers, Small Business Development Centers, and Veterans Business Development Centers; and they survive and thrive by obtaining contracts with the Federal Government. These are the people and the businesses my amendment assists. So why does this budget handcuff the very programs that have allowed our businesses and economy to expand?

The SBA has helped create and retain over 5.3 million jobs since 1999. It is clear that our economic future depends on the success of small firms, which constitute over 98 percent of our Nation's manufacturing enterprises, create nearly three-quarters of new jobs, and produce 50 percent of the gross domestic product. However, we cannot, on the one hand, state how much we value small businesses, and on the other hand, neglect to provide the assistance that small businesses so desperately need to compete.

This bipartisan amendment provides funds for the SBA's Microloan Program, which provides loans of up to $35,000 and technical assistance to new and growing small businesses. The administration proposes to eliminate the

subsidy for microloans and transfer the technical assistance duties to the entrepreneurial development programs. However, this relatively inexpensive program is critical to our next generation of entrepreneurs. In fact, in my own State of Maine, the Microloan Program has made 94 loans over the last 2 years, for a total of $1.7 million. The elimination of this subsidy will increase interest rates for our Nation's microlenders and micro-entrepreneurs located in rural and underserved communities that have no other resource for financing.

Additionally, this amendment provides the critical funding for Small Business Development Centers, SCORE and Women's Business Centers, which served over 1.2 million clients in 2006. Not only has funding for these programs decreased over the last 5 years but the SBA proposes to increase their responsibility to take on microloan technical assistance. These critical programs need and, quite frankly, deserve the resources to reach and assist more small businesses.

Moreover, this amendment provides the resources necessary for our small businesses to access prime contracting and subcontracting opportunities. The SBA has failed to fix regulatory loopholes identified by the GAO that allows large contractors to keep small business set-asides. To address a contracting market that has increased to nearly $400 billion a year, the SBA budget needs to increase its resources and provide proper oversight.

I would like to point out the irony that the administration's budget supports and funds microloans and assistance for foreign microenterprises, but eliminates, yes, eliminates, all funding for domestic microloans and assistance for American microenterprises. While I fully support aid and assistance to foreign microenterprises, what are we saying with this imbalance? Is this fair? Is this the message we want to send to our Nation's small businesses?

How can we justify repeated cuts in funding for loans and assistance here at home? Is this our priority? I think it is not, and this amendment reflects our priorities and our commitment to American small businesses. The $97 million provided for here would make a significant difference to our job-creating small firms and helps them grow, flourish and thrive.

My amendment is absolutely necessary for America's small businesses and is an investment in the entrepreneurship and future of this country. I urge my colleagues to support it for the SBA and our small business job creators. If we fail to provide sufficient support to SBA's core lending and business development programs, we threaten to reduce small businesses' ability to compete. The American economy needs a strong and vibrant Small Business Administration.