Social Security Solvency Act of 2009

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to speak in morning business for 20 minutes.

Mr. President, there has been a generous amount of discussion on the floor today about the economic recovery package that has been put together and about the dire conditions of our economy. If you listen, they have been described in so many different ways-- financial crisis, deep recession, economic trouble, a wreck, a dire condition--and I suspect almost anybody who has been experiencing trouble in the workplace as a result of this rather steep economic decline would understand all of those terms.

I have been listening to the debate on the floor of the Senate, and I had to come to see if we could add a little clarity to what has caused all this. It is pretty hard to describe a remedy unless you understand what has caused it.

I understand from a lot of discussion a bit ago that there are a lot of people who don't want to do anything or they want to do something much less or they are not sure. In any event, I was thinking of how many people in the Senate lined up to help the banks. The Treasury Secretary said we have to pass legislation to help the big Wall Street banks. He said we have to pass a 3-page bill in 3 days for $750 billion. Boy, there was a big-old traffic jam trying to get up here to the well to vote in favor of that legislation, helping out all the big banks with hundreds of billions of dollars. Now we are talking about helping someone else out, helping out folks who need jobs, and all of a sudden, there is a big problem. Mr. President, $700 billion to bail out big banks and steer this economy in the ditch--that is OK, big traffic jam to do that, but some money to help put people get back on payrolls, no, that is deficit spending, we are told.

I showed this chart the other day on the floor of the Senate. There were 35 jobs available in Miami for firefighters, and 1,000 people showed up on the sidewalk and lined up to apply.

For some, it may be easy to come to the floor of the Senate and talk about the 598,000 people who lost their jobs last month, the 1 million people who lost their jobs in the last 2 months, and the 3.6 million people who lost their jobs since this recession began. But name 1, name 10, name 1,000, name 1 million or look at their picture and see the faces of people who want to work but cannot because they were told their jobs no longer exist. Then ask whether this is important, and ask yourself: What are you going to do about it? What do you think the remedy is? What do you think the priority ought to be with respect to putting people, such as these people, back to work: giving them an opportunity with a job or lining up in the well of the Senate to say to the big banks: Here I come; here is $700 billion. Big difference, in my judgment.

The difficulties we face in this country today are not some natural disaster. This is not Hurricane Katrina that came raging through our country. This is not some disaster over which we had no control. This is an economy which is collapsing and has very serious trouble as a result of specific things that have been done that have been irresponsible.

How on Earth do you describe a solution unless you are willing to admit what has caused it? Let me go through some of it. It is not a question of pointing fingers, it is just a matter of deciding, let's be straight about where we are and how we got here. They will write in the history books about this era and this age. We studied the Gay Nineties. We studied the Roaring Twenties. Somebody will study this age, this age of excess, this carnival of greed in the history books in the future.

So how did we get here? Let me describe it by saying we got, in my judgment, several fundamentally flawed policy changes that happened over a long period of time.

Trade. First of all, you cannot suggest this problem we have does not lay right on the doorstep of those who have allowed this trade deficit in this country to rise to $700 billion to $800 billion a year, buying $2 billion more each day than we sell abroad and racking up a giant deficit for this country that we must repay to other countries. Most of the Members of this body have been perfectly willing to be brain dead on that subject for a long time. Trade doesn't matter, the deficits don't count. Don't worry about jobs going overseas, don't worry about unfair trade agreements, just ignore it and just keep chanting about free trade. That is one big mistake that has been made for a very long time and no more so than during the past 8 years of the past administration.

With a trade deficit of $700 billion to $800 billion a year, add to that budget deficits. I know what they say about the budget deficit in the newspaper. OMB puts out a number. I think the

last administration said it is some $450 billion. That is not true at all. It is not $450 billion. The question is how much did we have to borrow last year. That is the impact. It is between $700 billion and $800 billion, even more depending on whose counting. So with an economy of $14 trillion or so, a $700 billion to $800 billion trade deficit, a budget deficit of somewhere around $700 billion to $800 billion, that is 10-percent or so indebtedness in 1 single year.

But it is not just the fact we have this budget deficit that has been so out of whack ever since the last administration took office--and by the way, they inherited a budget surplus. We had a big debate on the floor of the Senate, and those now saying: Let's not do much to remedy this economy, were standing on the floor of the Senate saying: We want to get rid of the budget surplus; we want very big tax cuts for a very long time, most of which will go to the very wealthy. Some of us said: Let's be careful, let's be conservative. No. Katy, bar the door. They passed their legislation. We ran into very big budget deficits in a very big hurry.

Trade deficits, budget deficits--and by the way, a budget deficit that was, in part, constructed by deciding to fight a war and not paying for it. Can you imagine, fighting a war and saying we are going to charge every penny. We say to the American people: You go shopping. That is what President Bush said: Your job is to go shopping. We are going to fight this war. We are going to spend $10 billion, $12 billion a month, and we don't intend to pay a penny of it. Some of us who wanted to pay for part of it were told: We will veto the legislation if you try. He said: I will veto the legislation if you try.

Trade deficits and budget deficits have weighed this economy down in a very significant way. And the very folks who have come today to talk about spending and deficits are the ones who supported all along a fiscal policy that created the most significant budget deficits in the history of this country.

Those are not the only two things. They are significant--trade deficit, a budget deficit, reckless fiscal policy. They are significant, but something else happened, something very significant, and I talked about it frequently on the floor of the Senate. The same people who are so concerned about these issues now joined forces to say: You know what, we need to modernize America's banking system. It is way old-fashioned, way out of date. We put in place all kinds of things since the Great Depression to prevent banks from being modernized, and we need to have one-stop shopping. We need to let banks get involved in real estate investments again. We need banks to get involved in securities investments again. And so they passed--yes, the Congress did; incidentally, there was bipartisan support for it--a piece of legislation called the Financial Services Modernization Act. It got rid of old-fashioned things that were put in place after the Great Depression and helped create the big bank holding companies that could get involved in securities, real estate, and all kinds of risk ventures attached to banking which we had prevented for 80 years.

All of a sudden, we saw the pyramid created, the big holding companies, and it was Katy, bar the door. What we saw was the buildup of unbelievable leveraged debt in these institutions and a substantial amount of risk brought into America's banking system.

Almost immediately, that system allowed greed to permeate. Here is how it manifested itself in one significant part of the contributor to this economic malaise, and that is the housing bubble and the subprime loan scandal. I have spoken about it at great length--I am sure people are tired of hearing it--the subprime loan scandal. We know people who were cold-called by brokers to say: We know you are paying a 7-percent interest rate. We will give you a 2-percent interest rate, and by the way, you don't have to pay any principal; 2-percent interest rate and no principal, and you don't have to document your income to us. No-doc loan, no principal, 2-percent rate. They put people in subprime loans not telling or emphasizing that it is going to reset in 2 years to 10 percent or 11 percent and you can't prepay because there is a prepayment penalty for doing it.

They larded up a whole lot of securities because they wrapped these into securities with bad loans, bad mortgages, and then sold them upstream to mortgage banks, hedge funds, investment banks. They were all fat and happy, and that included the rating agencies that would take a look at that security and say: That is a good security; that is AAA. They were all in on the take. By ``the take,'' I mean infected with greed. So we had the housing bubble. We had all of these mortgages out there.

Consider this: A $14,000-a-year strawberry picker buying a $720,000 home placed by a broker who got a big bonus for placing the mortgage without any chance of that person being able to make payments. But that mortgage then becomes a mortgage wrapped into a security sold to a hedge fund, rated as a security as AAA, sold to an investment bank. Now all of a sudden you have brokers who are happy because they are making massive amounts of money; you have the mortgage banks, they love it, they are making lots of money; hedge funds, they are making so much money they can't count it.

By the way, the top hedge fund manager a year and a half ago earned $3.7 billion. By my calculation, that is $300 million a month, about $10 million a day.

Honey, how are you doing at work?

I am doing pretty well, $10 million a day. I make as much in 3 minutes as the average American worker does in a year.

They were all happy, all making massive amounts of money. The problem is, they built a pyramid. The scheme of this pyramid is not much different from Mr. Madoff, who apparently allegedly got away with a $50 billion Ponzi scheme. This scheme was not much different. All of a sudden, it began to collapse.

Huge trade debt, big federal debt, reckless fiscal policy, fighting a war and not paying for it, charging every penny, in fact, insisting on continuing tax cuts even during the war, and then this unbelievable banking scandal by removing the protections that existed since the Great Depression and saying to the big banks: You can create holding companies, you can attach risk, such as securities and other issues, and it will be just fine. You can do that. And so they did. All of it was built on leverage--trade debt, budget debt, leverage debt in the private sector, almost unparalleled in the history of this country. Then the tent pole began to come down. All of a sudden, we discover a very serious problem.

To describe how significant the money that was being paid was, there was a discussion in the last couple of days in the Congress about maybe doing what President Obama suggested; that is, to those big companies that got bailout funds, for the top 25 people in those companies, their compensation should be limited to half a million dollars a year. It is interesting, when they tried to do that, my understanding is there was a budget cost to that of something close to $10 billion. Why would there be a budget cost? Because they were all making so much money that the income tax they would pay as a result of that money was so significant that you had a $10 billion budget cost if you limited the income of the top people on Wall Street in these firms to $500,000 a year. That is almost unbelievable to me. But having done some work to study how much income exists in those areas, that is exactly true.

There was an investigative story in the Washington Post about the failure of one of the largest investment banks. They described the top trader in that organization, a person trading securities and the person who was in charge of risk management. It turns out they carpooled every day from Connecticut to New York. It wasn't very hard to have the top trader deal with his best friend risk manager and get things done pretty easily. The top trader, they said, was making $20 million to $30 million a year. So that company turns out to be loaded with toxic assets, as were most of the other institutions engaged in exactly the same business because they were making so much money.

Now we are told the taxpayers have to come to the rescue of these banking institutions. So $700 billion has been voted in what is called the Troubled Asset Relief Program, TARP. I did not support that legislation. I didn't think

the Treasury Secretary had the foggiest idea what he was doing, and I think history shows that to be the case.

But one of the questions I think needs to be asked at this moment, is: Is there a requirement that we bail out these specific banks? Is that some divine right of existing institutions, to come to the Government to say: We are in trouble, you need to help us. Well, what has happened is the Government has allowed them to become so big they are referred to as being too big to fail. That is an actual specific category at the Federal Reserve Board--too big to fail. Despite the fact that they are bailing them out, our Government--the Federal Reserve Board and the Treasury, which have said these institutions are too big to fail, and have in fact failed and need taxpayer money to bail them out--our Government is actually pursuing mergers to make them bigger. It is unbelievably ignorant, in my judgment, as a policy matter. But I think it is important for us to ask some basic questions here. Do we care about too big to fail; and should we, at some point, decide to take apart those institutions and create different entities, smaller institutions?

I understand we can't tomorrow decide there will not be any major banking institutions in this country. Our country can't function like that. Credit is critical to every business in this country. I know many profitable Main Street businesses that are having great difficulty finding credit from established credit sources they have had for decades. So I understand the urgency and the need for credit from banking institutions. My only observation is this: If we are pushing $700 billion after failed institutions in order to try to make them well, even as we are saying to them, we want you to become bigger, and when, in fact, they are already too big to fail, I am saying that doesn't add up to me. I think maybe we should have a discussion here in this Congress about whether there is some inherent right to preserve institutions, or whether those that are too big to fail should be perhaps taken apart and create institutions that will better serve this country's interest.

Now, some say there are only two choices in the future as we try to take a look at financial reform. And by the way, there is very little action on that at this point, and I believe it ought to go concurrent with all the discussion about trying to put people back to work and so on. But it seems to me the two choices are: You go back to a world in which you had Glass-Steagall and separation of banks from other inherently risky things, such as securities and real estate. And I believe we should do that. That means banks essentially become very much like a utility. That is the way it was. They were regulated, but generally performing traditional banking functions and making money. Then risky enterprises are over here, regulated in a different way but nonetheless able to engage in substantial amounts of risk with securities, real estate, and other items.

We have to make that choice, and the sooner the better. I think to ignore that is to suggest, as some are now doing, that what we are going to do is we are going to have taxpayer money chase current institutions that have failed, and perhaps even make them bigger when they are already too big to fail. That makes no sense to me at all.

And that brings me to this issue today of the economic recovery plan that has been negotiated. I don't think anyone comes willingly to this either starting line or finish line with this kind of a plan to say, I am pleased to be here. But I do think this: I see all of the energy of people who rush to try to help the big banks with $700 billion, and then see so much concern about trying to help people who are out of work, and I say: Wait a second; maybe we have our priorities wrong here. I believe that the economic engine in this country works best when people have something to work with, when American families have a job to go to, a job that pays well and allows them to take care of their family. I think that is a percolating-up kind of strategy with the economic engine, and I think it is perfectly appropriate and important. In fact, I think it is essential for us to worry about trying to put people back to work during a very deep recession.

No one can say that what happened last month doesn't matter. You can't say that 598,000 people coming home at night and telling their loved ones they lost their job doesn't matter to this place. If it mattered to this place that the biggest banks in the country were having some difficulty, and they had to get $700 billion, why doesn't it matter that we care a little bit about the people who lined up in Miami, FL, a thousand of them, trying to get a little shot at 35 firefighting jobs? This too ought to matter. It is not unfair, as some have suggested last week when I showed this chart, and said I was playing on sympathy. This isn't sympathy. This is reality. Isn't it important that we talk a little about reality and a little less about theory here in the Chamber of the Senate? The fact is these people got up, stood in line, because they need a job, and we ought to be able to do something about that, to try to put people back to work and give this economy a lift.

I think it is pretty clear that no one knows exactly what the medicine is or the menu is to try to make this economy well and healthy once again. But this legislation we are going to be considering contains a couple of things that I put in during this past week when it was considered. One is very simple: If we are going to put people back to work building roads and dams and bridges and so on and so forth, putting people on payrolls to do these projects that will invest in America's infrastructure, then let's try to buy American products while we do it so that we are putting people on factory floors to produce those products. I am talking about steel and iron and manufactured projects.

When I suggested that we buy American for the major purchases that we are going to make to put people back to work, I did that because I know when we buy those products we will put our people back to work in those factories. But you would have thought I was talking the most radical kind of talk in the world, by the reaction of some--you are going to upset the international balance of trade. That is absurd. We are already so out of balance in trade. We are $700 billion to $800 billion in red in trade. At any rate, my legislation is here. So as we try to put people back to work and invest in our infrastructure to create jobs, we should buy American. It is common sense.

The second amendment I put in this piece of legislation is different than anything that has been required with all the other money that has been shoved out the door by the Federal Reserve Board, by the Treasury Department, by the FDIC, and, yes, with TARP, supported by the Congress, and that is a provision that says: I want accountability. If you get money from this economic recovery package, you have to report to us on a quarterly basis that says: Here is who I am, here is the money I got, here is how I used it, and here is how many jobs I created. That kind of accountability, demanding that kind of reporting, is essential for my support for this bill. And that is in this piece of legislation because I put it there last week.

Now, one final point, if I might. I understand, as I have said many times, that in most ways the issue of trying to promote economic recovery in this country is not about some menu. It is not about a menu of tax cuts or more spending. It is not about a menu of M1B or anything of that sort in fiscal or monetary policy. It is about trying to give the American people some increased confidence about the future. That is critical in order to have an expansion of our economy. People have to feel confident about the future in order to act on that confidence--to buy a suit, buy a new washing machine, buy a car, buy a home, take a trip. It is the kind of things people do when they are working and they feel good about the future and their job is secure. They do things that expand the economy.

When people aren't confident, they do the exact opposite, and that causes a contraction of the economy. That is where we are today. People aren't confident about the future. I understand that. I mean, I think all of us know why. They have seen the most significant era of greed perhaps since the 1920s, and they do not like it. They have seen a collapse of the housing bubble, they have seen big investment bankers get rich, they have seen all these things--the scandals--and it is hard to be confident. They have seen the country fight a war without paying

for it. Some people have given their lives. So I understand that we have a lack of confidence. The question is not whether that exists; the question is what do we do about it? Do we decide to do something about it? And if so, what?

I have described often the response of Mark Twain when asked if he would engage in a debate at this organization, and he said: Oh yes, if I can take the negative side. They said, but we haven't even told you the subject yet. He said: Oh, the subject doesn't matter. The negative side will take no preparation.

So I understand how easy it is to simply be opposed to everything. The question now, however, is: What do we do to lift this country? What do we do to help lift this country out of this deep recession and give people some confidence that we are on the right road? Perhaps a trade policy that begins to insist on some balance in trade so we are not deep in the red; a budget policy that at some point says you can't spend what you don't have on what you don't need. You have to have some balance in fiscal policy and you have to recognize that. And you have to have a policy on banking and finance that says we're not going to allow you to do this anymore. We are not going to merge the safety and soundness of banking with speculation and risk in real estate and securities. We are not going to do it. If we would take those steps, it seems to me we would give some substantial confidence to the American people.

Passing the legislation that is going to be proposed today or tomorrow--the American Recovery and Reinvestment Act--is not the easiest thing, I understand, because it is counterintuitive to somehow believe that the way out, when you are deep in debt, is to spend some money. Well, I understand that is counterintuitive. Yet all of the lessons we have learned are that you have to prime the pump to put people back on a payroll. If you have half a million people a month losing their jobs, you have to find a way to put people back on the payroll and to inspire some confidence in the economy again.

I have heard discussions today about, well, I worry about this piece or that piece, and people won't go back to work. I am telling you, I think there are a lot of things in this bill that will put people back to work.

I chair the Appropriations Subcommittee on Energy and Water. We have $4.6 billion in this with the Corps of Engineers, and the Corps of Engineers will be repairing mostly bridges and water projects--that are designed, engineered, and ready to go. They will be being hiring contractors who will be hiring workers. The fact is there will be a lot of jobs created with this package--we believe 3.5 to 4 million jobs. That is going to make a difference, I believe.

Having described in some cases our disagreements, let me say that I do think every single person in this Chamber wants the same thing for this country. We perhaps have different approaches to how to get there, but we all want this country to prosper, the economy to be lifted and to recover, for people to go back to work, and for us to have the kind of future that we expect for our children. I believe that is possible. If I didn't believe it was possible, I would hardly be able to go to work in the morning.

Let me tell one story, if I might--I have mentioned it before, a couple of weeks ago--and some people have heard of this. I talked about this guy named Ken Mink from Kentucky, because it is so inspiring. It is so indicative of people in this country who think we can do anything and they can do anything.

Ken Mink, from a news report I read, was 73 years old. He was out in the back yard shooting baskets, and he came in and said to his wife: Honey, it is back. She said what is back? He said: My shot. My basketball shot is back. No matter where I shoot in the back yard, I don't miss. So he sat down that night and wrote applications to colleges--junior colleges--at age 73. He got into a junior college and tried out for the basketball team, at age 73, and made the basketball team. About a month and a half ago, he made two points in a college basketball game. The oldest man, by 40 years, ever to score at a college basketball game, at age 73. I was thinking about that the other day, and I thought: What a wonderful inspirational story, of somebody who didn't understand what he couldn't do. Who says you can't play basketball at age 73 for a junior college some place in Kentucky?

My point is: I think that represents the story of our country. We have so many stories of people who, against the odds, do things that make this a better place. And if we work together and believe in ourselves, and believe in what we have accomplished in decades past and will accomplish in the future, this country is going to be fine. So we are going to get through this week, and hopefully we will give some boost to this economy, and after which I believe we will see an economy that provides more jobs and begins to expand and provides opportunity for American families once again.

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

Mr. President, I rise to express my opposition to the conference report that has been granted and put together accompanying the American recovery and Reinvestment Act of 2009, more commonly known as the stimulus package.

When I spoke on the floor last week about my disappointments in the Senate version of the stimulus bill, I did not think the bill would get much worse in conference. In fact, I harbored some hope it would actually improve. Unfortunately, I was wrong.

What we have seen emerge from the conference weakens the stronger provisions of the Senate bill and worsens the less effective provisions.

Many Utahans have called and written me to express their concerns about this stimulus package and the process by which it has been legislated. They are rightly worried about the consequences of an economic stimulus package that, with interest, will cost taxpayers well over $1 trillion. That is just the beginning, by the way. They are particularly worried it will be ineffective in saving or creating jobs.

Last year, President Obama's campaign was based on ``hope not fear.'' That is until he needs fear to help him pass a bill, as Charles Krauthammer of the Washington Post points out. The pressure is on the majority to convince the American people this is the right economic package.

On Tuesday, President Obama spoke to the American people, not about the audacity of hope but rather to instill fear into Americans. He said at that time:

A failure to act will only deepen the crisis as well as the

pain of Americans.

He also said:

The Federal Government is the only entity left with the

resources to jolt our economy.

While I do not disagree with these statements, it is wrong to use fear to force the completion of an unbalanced, largely partisan package that the Congressional Budget Office estimates will create at most 1.9 million jobs by the end of 2011 and leave us with a lower gross domestic product in 10 years than if we do nothing at all.

Keep in mind, the head of the Congressional Budget Office is a Democratic appointee.

It is clear we are in an economic recession and that action is needed to stimulate the Government. I think every one of our colleagues agrees with this. What troubles me is the misperception about why most Republicans are opposed to this bill. The President and many of our Democratic colleagues have unfairly implied that Republicans prefer to do nothing. That is absolutely not true. Yes, we are opposed to this bill, but we are not opposed to stimulating the economy. We simply want to do it in the most effective and least wasteful way as possible. We do not want to see us make a $1 trillion mistake, and this is a $1 trillion-plus mistake.

Yet we Republicans were shut out of negotiating the final conference report, which is something President Obama vowed to the American people he would change. According to President Obama's Presidential campaign Web site, change.gov, he vowed to ``end the practice of writing legislation behind closed doors.''

Specifically he said he would `` . . . work to reform congressional rules to require all legislative sessions, including committee mark- ups, and conference committees, to be conducted in public.''

That certainly did not happen here. I believe this bill could be much more effective and so does President Obama. At his Tuesday press conference, he admitted as much when he said:

I cannot tell you for sure that everything in this plan

will work exactly as we hope.

That concerns me. If we plan to spend an amount equal to the 15th

largest economy in the world, we ought to make sure the stimulus plan is drafted in the most effective way possible.

For example, many economists say the make work pay tax credit provision in the plan, which will give workers roughly $15 more a week in each paycheck, will largely be ineffective in stimulating the economy. It is not going to help the economy. Yet it is a tremendous cost, around $150 billion, that could have easily been spent on something that would help the economy, create jobs. I suggested the research and development tax credit by making that permanent. I cannot begin to tell you how that would keep our unqualified lead in the high- tech world.

My objection to this bill is not based on the fact it includes spending, it is because it lacks an effective balance of spending and tax relief.

If we look closely at the bill, we will see that much of what the majority lists as tax relief is actually spending. In other words, those who do not pay any income taxes, as well as State and local governments, are receiving money through the Tax Code. How can there be tax relief to those who do not pay taxes? That is more taxes for those who do. Tax relief from what? I am not saying those who do not pay income taxes should not benefit from this stimulus package. I am saying if you are going to give money to people who do not pay taxes, call it what it is--it is spending, it is not tax relief.

Like I say, I would far rather would have had a permanent research and development tax credit, which would cost about only two-thirds of what they are going to spend on this so-called make work pay provision that would create millions of jobs in America and throughout the world.

In fact, when one adds up all the provisions in the bill, more than 70 percent is spending and less than 30 percent is real tax relief. Where is the balance? Even worse, only one-half of 1 percent of this bill--one-half of 1 percent of this bill--is devoted to tax relief to help struggling businesses keep their doors open. One-half of 1 percent--that is pathetic. We know small business produces most of the jobs. Yet this is what we are doing. Moreover, the bill fails to adequately address the housing crisis. Unfortunately, the $15,000 tax credit for home buyers, which is one of the few bipartisan amendments accepted into the Senate bill during the Senate debate, has now been watered down drastically. So has the other major bipartisan amendment added on the Senate floor--the deduction for interest on a new auto loan. And one of the few provisions to help struggling companies keep their doors open--the expanded period for carryback net operating losses--has been erased from the conference report, except for small businesses.

Now, I have some news for my Democratic colleagues. Small businesses are not the only companies that are laying off workers. Allowing companies to get quick refunds of taxes previously paid was one of the few smart and efficient provisions in the Senate bill, designed to directly save jobs. Now that has been whittled down to a mere shadow of what it was.

I worry that my friends on the other side of the aisle are looking through rose-colored glasses, spectacles tinted by spending priorities, such as expanding Government programs, which they hope will stimulate the economy. They are trying to convince America that spending millions on Government vehicles will somehow stimulate the economy. They refuse to listen to even the President's Chair of the Council of Economic Advisers, Christina Romer, who in a study determined that every dollar of Government spending increases the gross domestic product by $1.40, while every dollar of tax relief increases the gross domestic product by $3. That is what the study says. The President's own Chair of the Council of Economic Advisers says that $1 of Government spending equals a $1.40 increase in GDP, but if you do it in tax relief, $1 will give you a $3 increase in GDP. Doesn't take too many brains to figure out it is far better to do it the second way.

The Congressional Budget Office recently estimated that the Senate version of this so-called stimulus package would only save or create between 600,000 and 1.9 million jobs by the end of 2011. At a cost of $1.2 trillion, including interest, the cost to the taxpayer for each job saved or created under the plan is at least $632,000 and as much as $2 million if that goes up. We are spending taxpayer money to create one job at the rate of $632,000 per job.

Now that the Senate bill has been scaled back significantly, this job-creation estimate is almost sure to go down significantly. We can do better than this, Mr. President. This is not good enough for Government work. With the amount of money spent in this bill, you could give every man, woman, and child in America $4,000. I think Utahns and all Americans would put $1.2 trillion to better use than what this bill does.

A large share of this stimulus bill will go to States to implement temporary programs. When that funding runs out, what do we tell all of those employees who were hired and now have to be let go? Will we say: Sorry, this is just a temporary job. Who are we kidding? This makes about as much sense as denying an undefeated football team the chance to play in the national championship game. I know that sounds a little bit like sour grapes since the University of Utah was the only undefeated team this last year but had absolutely zero chance to play in the national championship game.

The majority knows the American people want to see more tax relief in this stimulus bill. A February 9 poll conducted by the Rasmussen Report found that 62 percent of U.S. voters want the plan to include more tax relief and less Government spending. It appears as if the more time Americans have to review this bill, the less they like it. That is certainly the case for me.

While time is of the essence, we cannot afford to get this wrong. The stakes are too high. Yet President Obama has chosen to break the theme of his Presidential campaign and use fear to hurriedly pass this flawed economic stimulus package. Now, I am not sure I can blame him for that because he is stuck with what the people up here have done to him and to what he said he would do. So I suppose he was limited to using fear to get this package passed. I have a lot of respect for him. I personally have helped him, and I intend to help him more. But, gee whiz, this is pathetic.

Mr. President, we Republicans realize the severity of this economic situation. We recognize the need to stimulate the economy with a balanced stimulus package that has an appropriate mix of spending and real tax relief. We want to create jobs and spur economic growth. But haste makes waste, and, like many of my constituents, I believe our efforts are about to be wasted--squandered on a stimulus bill that will stimulate more criticism and feeling of futility than the economy.

The great American poet and abolitionist John Greenleaf Whittier wrote:

For of all sad words of tongue or pen, the saddest are

these: ``It might have been!''

And while those words were written more than a century ago, they can certainly be applied now to Congress. Faced with serious recession, we need to do our very best to get the economy moving again. Instead, it looks as if this body will settle for a partisan bill that could well fail to do the job our Nation requires. We should do better. We could do much better. The American people need us to do much better. And if this legislation passes, many of us will one day shake our heads at the opportunity lost and wonder aloud about what might have been.

I have told a few people over the last number of weeks who have blamed both parties for what has gone on here over the last number of years that I have been here 33 years and there hasn't been 1 day in the Senate that I can point to where a fiscal conservative majority has been in control of the Senate--not 1 day in 33 years--because there are always enough liberal Republicans, combined with the mostly all liberal Democrats, to do just about anything they want to in spending. It is discouraging, I have to admit. We have won some battles because we have outworked the other side or we have had a President who has made a difference on some issues, no question about it. But not 1 day that I can recall where, if you count the liberals on our side and the liberals on the Democratic side and you put them together--it is usually only five or six, really, on our side--we always have the majority on

the other side. That is why President Bush was hammered all the time for his spending programs when, in fact, his budgets were at all times less than what we ultimately passed here in both Houses.

Mr. President, I would like to now take a few minutes to talk about the health care provisions in this so-called stimulus package or, more appropriately, the next installment of the ``Socialized Health Care for All Act of 2009.'' Democrats hate to hear that. They think it is terrible to hear the word ``socialism.''

President Obama recently made the media rounds stating that any delay in passing this Government spending package would be inexcusable and irresponsible. Well, today I am going to highlight certain health care provisions in this Trojan horse legislation that, in the President's own words, should be classified as inexcusable and irresponsible.

First and foremost, let me make this point again, even though I am starting to sound like a broken record. Reforming our health care system to ensure that every American has access to quality, affordable, and portable health care is not a Republican or Democratic issue, it is an American issue. When we are dealing with 17 percent of our total economy, it is absolutely imperative that we address this challenge in an open and bipartisan process.

Think about it. We are going to talk about this for just a minute. Just like the partisan SCHIP exercise preceding this bill, this stimulus legislation is another example of the Democrats justifying the current economic turmoil to simply expand our entitlement programs and make the Federal Government bigger. More and more Americans are being pushed into Government-run health care programs. Special interests have taken priority over families; politics, of course, over policy.

In this time of national crisis, we should have come together as one group to write a responsible bill for the American families who are faced with rising unemployment and dropping home values. Instead, the other side has simply chosen to turn this into a government-expansion exercise and a grab-bag of favors for the liberal special interests.

I continue to hope that the other side's promise of change was more than a campaign slogan that did not expire on November 4, 2008. Let's all remember: Actions speak louder than words.

Let me start with the COBRA provisions in this package. The Senate version of the stimulus includes more than $20 billion in subsidies for health insurance premiums for those who have lost their jobs in these tough economic conditions. However, this subsidy will only go to those Americans who had access to COBRA coverage through their employers.

Now, let me put this inequity into perspective. If you worked for a large employer, such as Lehman Brothers or Bear Stearns in New York City, which had access to a COBRA qualified group health plan, you will get help under this bill. But mom-and-pop stores in Salt Lake City that could not afford a group health plan for their hard-working employees, they get nothing. Not a thing. Now, let me repeat again--nothing. This is not only unfair, it is unconscionable.

That is not all. It gets worse. Both the Senate- and the House-passed language gave the same COBRA subsidy--50 percent and 65 percent respectively--regardless of one's income threshold. Look at this chart. You probably recognize the fellow on the left. This is Richard Fuld, the former CEO of the now-bankrupt Lehman Brothers, who made almost half a billion dollars in salary, bonuses, and stock options since the year 2000. He is going to get the same level of subsidy for his health insurance premiums as the laid-off construction worker on the right here in Utah.

I worked with Senator Grassley to write an amendment that would have applied income testing to this provision to target this taxpayer-funded help to those who needed it the most. We income test Medicare Part B for our seniors, so why not do the same for these subsidies? Unfortunately, it was not included in the Senate package.

Another concern Americans need to be mindful about is the impact of this massive COBRA subsidy on our Nation's employers, who are already struggling to meet their payroll needs.

By the way, just so everybody understands what COBRA means, if you get fired or the business ends or you have to leave the business, you have a right under COBRA to continue the insurance, but you have to pay for it rather than your employer.

Even though employers are not explicitly liable for the COBRA subsidies in this legislation, they will suffer from this phenomenon of adverse selection. A number of COBRA-eligible individuals have premiums that exceed those of active workers. Studies have shown that the average COBRA premiums are at 145 percent of active worker premium payments. According to a study by PricewaterhouseCoopers, the 10-year impact of this provision on employers, even when limited to those in the 55-to-64 age group, could be up to $65 billion. Economics 101 dictates that these additional costs will simply be passed on to employers, which in return will result in lower wages and more layoffs. This is not exactly what would qualify as ``stimulus'' in my book-- spending, sure, but definitely not stimulus.

Let me shift my attention to the comparative effectiveness provision. The idea behind this concept is simple: Compare the effectiveness of medical treatments and procedures so payers, providers, and patients can make smart choices. Sounds good. However, the difficulty arises when you decide to compare on the basis of what is cheaper rather than what works well. Both the House- and the Senate-passed versions provided $1.1 billion for comparative effectiveness, including a $400 million slush fund to be used by the Secretary at his or her discretion. Once again, this is a topic of bipartisan interest and concern that should have been discussed in the context of comprehensive reform.

We can all agree that a one-size-fits-all approach is the wrong approach for the American health care system. Based on our own personal experiences, we know that what works best for one does not always work the same for the other. Allowing comparative effectiveness on the basis of cost can have disastrous consequences not only on innovation of lifesaving treatments but also in the delivery of quality care.

On this chart, for example, we see Jack Tagg, a former World War II pilot, who in 2006 suffered from a severe case of macular degeneration. The regional health board that utilized cost-based comparative effectiveness rejected his request for treatment citing high cost, unless the disease hit his other eye also.

It took 3 years to overturn that decision. Now let's just all remember that a family member with cancer in an intensive care unit would probably neither have the time nor the resources to appeal such an egregious decision. We need to remember the real implications of these provisions--not simply in terms of political spin and special interests--but in terms of its impact on real people who are our mothers, fathers, husbands, wives, brother and sisters--children.

During the Finance Committee consideration of the stimulus legislation, Senators Baucus, Enzi, Conrad, and I discussed the importance of getting the comparative effectiveness provision right.

I believe that comparative effectiveness must focus on clinical effectiveness, not cost, and it should maintain patient choice and innovation. Failure to do so could have disastrous consequences.

As I have already said multiple times, I am disappointed that Democrats have decided to use the stimulus legislation to address health care reform in a partisan and piecemeal manner. Health IT-- information technology--is another perfect example. It is an area of consensus that should have been part of a comprehensive and bipartisan health care reform dialogue.

It is my hope that the Health Information Technology Standards Committee that is created in this legislation will take into account the work of States like Utah that already have adopted statewide HIT. standards for the exchange of clinical data. Utah is much further down the road than other States in this area. Therefore, when the committee is making recommendations for HIT standards, it is my hope that the work of States like Utah will be taken into account and seriously

considered by the HIT Standards Committee members. Utah has been a national leader in this area and I believe that its work in this area should be used as a template when national HIT standards are developed.

In addition, as we incentivize physicians, hospitals and other health care providers to use electronic health records--EHR, it is important that we provide assistance for them with both the purchase and maintenance of EHR systems. I have heard from one Utah physician in Ogden who paid over $8,000 for software only to discover that the software simply does not work. This is unacceptable. Therefore, if we are going to incentivize health providers to use electronic health records, we need to make sure that providers will have assistance in choosing, implementing and using electronic health records.

Utah has been a leader in physician EHR implementation as a result of its participation in the Centers for Medicare and Medicaid Services-- CMS--Medicare Care Management Performance--MCMP demonstration project which was created through the Medicare Modernization Act. The demonstration provided incentive funding to Utah physicians for adopting EHRs and offered these doctors support and assistance with their EHRs systems. In the bill we are considering, I included language to ensure that health providers in Utah and across the country will continue to receive that assistance. Without such assistance, many practices will move forward with a commitment to adopt EHRs, but will not choose the right product for their needs or could have difficulty using the system.

Another concern that has been brought to my attention by Utah health care providers is that the maintenance of effort provision in this legislation only applies to eligible State and local governments and not to State and local health care providers. This is a real concern in Utah. My State, like others across the Nation, is experiencing economic difficulties and, as a result, is contemplating reducing provider payments. I am deeply concerned about the impact this provision could have not only on providers but patient access to quality health care.

Finally, I would like to briefly address the enforcement provisions contained in section 13410 of this legislation relating to the State attorneys general. When adopting rules to implement the health information technology provisions in this act, I would urge Secretary of HHS to include rules to require the States to notify the HHS Secretary as to any outside groups that will have contracts to assist with the enforcement of these provisions. I appreciate the opportunity to work with my colleagues on this important issue.

I look forward to working together to transform our sick-care system into a true health care system. However, the other side at this time seems focused on transforming it into a socialized welfare system through this Government-spending bill. I continue to hold deep hope in my heart that we will soon move beyond these beltway games and work together to fix Main Street and make sure that our Nation continues to be the shining city on the hill.

Let me just make one other comment. When our bill went over to the House--the House bill was passed too--I happened to notice that the welfare reform program that we worked so hard on in the mid-1990s, that President Clinton vetoed twice until he finally decided that it was worthwhile and signed it, has been greatly modified in this bill. I may be wrong in this because I have not read that section, but I have had indications that that section basically has changed our welfare reform law. It basically put, within a short time thereafter, two-thirds of the people who had been on welfare to work, many of those people second and third generations on welfare. They found out that they could work and get the self-esteem that comes from being able to work, while still having a welfare system to care for those who can't care for themselves but would if they could.

My understanding is they have changed the rules now where people can stay on welfare their whole lifetime. I hope that has been changed. I have not looked at this final version, but I hope that has been changed. If not, let me make a prediction. For most all of my time in the Senate, the percentage of GDP that our Federal Government has required is somewhere between 18 and 20 percent. If this bill goes through and there is another $2 or $3 trillion in spending, without being done right, we are talking about Europeanizing America. We are talking about the percentage of GDP going up as high as 39 percent-- according to the economists I talked to. That would be disastrous.

Some are so crude that they suggest that is the plan of our more liberal friends on the other side because the more they get people dependent on the Federal Government, the more they think the Democratic Party is the only one that is going to take care of them.

We prefer a little different approach to it. We prefer to help those who can't take care of themselves but would if they could, to help them in every way we possibly can. We have difficulty--at least I do-- helping those who can help themselves but will not.

I hope that provision is no longer in this bill, but I strongly suspect it is. If that is so, we will have done the American economy tremendous harm.

I am concerned about this. I can't vote for this bill, but I would have liked to have voted for a really good bill that really provided appropriate tax relief and made it possible to expand jobs in such a way as to bring this economy back to the greatest economy in the world, bar none, without question, and without question of its future greatness.

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

Mr. President, we are awaiting the conference report on the stimulus package. The papers and the airwaves are full of the fact that this will be the largest expenditure we have made in peacetime perhaps in our history.

I think it well, as we wait for the details of the package, for us to pause for a moment and take a longer look, beyond the recession, beyond the financial circumstances we are facing at the moment, and look down the road at what we are facing as a nation as a whole.

So I am going to make a historic pattern today and then introduce, at the end, a bill I believe is necessary for us to deal with our financial problems. Let's go back a moment in history to the year 1966. Why do I pick 1966? Because that was the year we significantly expanded the entitlement spending in the United States. That was the year we adopted Medicare as a Federal program.

As you see from the chart, at that time the mandatory spending constituted 26 percent of the budget. By ``mandatory,'' I mean spending that we have to do. People are entitled to receive that money whether we have the money or not; it is mandatory under the law.

The largest portion of the mandatory spending in 1966 was Social Security.

We were paying roughly 7 percent of our budget for interest. We had nondefense discretionary spending which was 23 percent. The big item, the big ticket item that dominated the budget in 1966 was defense. It constituted 44 percent of Federal spending in 1966.

Let's see what has happened since that time. Let's see where we are today. In fiscal 2008, this is where we are. The mandatory spending has grown from 26 percent to 54 percent. Interest costs are roughly the same. They were 7 percent; now they are 8. Nondiscretionary spending has shrunk to 17 percent. Defense discretionary, even though we are in a wartime, is 21 percent. It is clear the mandatory spending is taking over control of the Federal budget. And interest costs, of course, are mandatory. We owe those interest costs.

If you add the two together, 54 and 8, you get 62 percent of the Federal budget beyond the control of Congress. That is, when we pass the appropriations bills, when we make our decisions what to spend money for, we are spending money in the minority; whereas, 62 percent majority is out of our control. When you take away the defense spending and assume that has a semimandatory aspect to it and put defense spending in the mix, that means the Congress only has control of 17 percent of the budget, an amazing change in the roughly 40 years from 1966 until today.

What does the future look like? I must make the point that every projection we make around here is wrong. Every projection is an educated guess. But the educated guess of what will happen 10 years from now is that mandatory spending will have grown to 61 percent and interest costs to 10 percent. That is 71. The Congressional Budget Office won't make a guess as to the divide between defense and nondefense discretionary spending. So all discretionary spending will be 29 percent, if we divide it in half, as it has historically been. That means the Congress, just 10 years from now, will only control 10 percent of the Federal budget. All the rest of it will be on automatic pilot. That is a startling thing to look forward to.

So as we talk about the stimulus package, we need to pause and pay a little attention to the entitlement spending that will go on and the kind of spending that will be built up, and we are adding to that with this stimulus.

Here it is in the projections of what it will be. It constitutes a wave. Indeed, it has been referred to almost as a tsunami of spending. It is broken down into the three primary sources of mandatory spending, the three biggest entitlements. At the bottom is the one that is the biggest now, and that is Social Security. But Social Security does not grow as fast as the next one, which is Medicare. And then on top of that is Medicaid. One can see this tsunami of spending will take our mandatory spending, which at the moment is less than 10 percent of GDP, up to more than 20 percent of GDP.

Let me show another chart that illustrates the same point in a slightly different way. You have the same entitlements. We have added in this chart discretionary spending. The solid line across is the average revenue of the Federal Government. It is recorded in percentage of GDP. We have historically had a revenue average of 18.4 percent of GDP. As we can see in 2007, the expenditures were slightly above that line. The largest portion of the expenditure was the combination of defense and nondefense discretionary spending. But the projection, as you go out, you see that at some point the entitlements will take over every dime we take in. The largest portion of it will be Medicare. Social Security will still be there. Medicaid will still be there. Discretionary spending will shrink even further as a percentage of what we are dealing with.

Why is this happening? Is this some kind of a plot that somebody is involved in? No. This is a result of the demographic changes that are occurring in our country. This chart summarizes it with the headline: ``Americans Are Getting Older.''

If you go back to 1950, the percentage of Americans who were age 65 or older was about 7 percent. It grew, the percentage, at a relatively slow level and then actually began to shrink. Why did it begin to shrink, the percentage of Americans 65 and over? This is a reflection of the Great Depression. People had fewer children in the Great Depression. So it follows that 65 years later, there were fewer people who were of retirement age. But following the Great Depression, you had the Second World War and then, when people came home from war, you had what historians refer to as the baby boom. All of those who came as a consequence of that are called the boomers.

Starting in 2008, which is now history, the line started upward in a dramatic fashion. In the next 20 years, we are going to see something happen that has never happened in American history. In the next 20 years, the percentage of Americans who are over 65 is going to double. That is what is driving all the numbers I put up before, all the changes in entitlement spending. These people are already born. This is not a projection that depends on guesses. This is something we can be sure of because the demographics of these folks are already there.

Now the projection is that 20 years from now, when the baby boomers finish retiring, the rate of increase will slow down again and go back to the somewhat gentle rate it was before we got into this situation. But that is the reality we are dealing with. In the next 20 years, the percentage of Americans who are 65 or over is going to double.

Let's look at some of the detail behind these demographics. Seniors are living longer. Not only are we going to get more of them, but they are living longer. That is why that trend is not going to turn down once the baby boomers have been absorbed. If you go back to 1940, after you reached 65 in 1940, if you were a male, your life expectancy was another 12 years, female 13. The chart shows how it has changed. Now if you are male and you reach 65, your life expectancy is another 16 years. If you are female, it is another 19 years. And roughly a short decade away, a male will go to 18 and female to 21. That means all the entitlement programs geared toward our senior citizens are going to be tapped into for many more years than was the case when they were put in place.

If we go back to the history of Social Security, we realize Social Security was something of a lottery. When Social Security started in the 1930s, roughly half of American workers did not survive until they were 65. So it was a lottery with 100 percent of the people paying in and only 50 percent taking anything out. Those who paid in got nothing for having done so. Those who survived to 65 got the benefit of their survival. Now you see they are living longer today, something like 75 or 80 percent of workers who join the workforce at age 20 are still alive at 65, so the lottery doesn't work anymore. Instead of half the people paying into the lottery, not getting anything out, you have more than three-quarters of the people who pay into the lottery getting something out. Then, once they get it, they get it for longer. The life expectancy of Americans is going up, as was shown in the last chart. This

shows the trend lines for male and female.

Again, in 1940, the life expectancy of Americans who had reached 65 was, for males, about 75. When we get out into the future, it will be 86. Put those two facts together. More people survive to 65 and, then, more people who get into the pool over 65 stay there for more years.

All this means that the financial structure of Social Security is simply unsustainable. Social Security cannot deal with these demographic changes. This is not a Republican plot or a Democratic plot. This is the demographics of the reality of the fact that Americans are healthier, living longer, and surviving to older age. So you get this reaction to the Social Security situation.

We go to the next chart that shows how Social Security works, in terms of the lottery I was discussing. In 1945, the program was still in its infancy. So this is a bit of a distortion. There were 42 people working and paying into the program for every one retiree drawing out. As the program matured and more and more of the workers retired, this number very appropriately came down. By 1950, there were still 17 workers paying into the program for every one retiree drawing out. Today there are three workers paying into the program for every one drawing out. With the demographic realities I described in the previous charts, we are looking at a time when there will be two workers for every retiree. That means, if the retiree is going to take out $1,000 a month, each worker has to be putting in $500 a month in order to make that happen and for a long period of time. This is how we have dealt with this demographic change throughout our history. We have dealt with it by raising taxes. Every step along the way, as the number of workers to retirees has gone down, the amount of taxes every worker pays has gone up.

Here is the history of the payroll tax increases: In 1937, you paid taxes on $3,000. That was it. Now it is $106,000. It has gone up and up all the way through.

This is unsustainable. You cannot continue to deal with the demographic changes in Social Security by simply ratcheting up the taxes. You have to do something to stabilize Social Security in a way that it will be there for our children and our grandchildren.

There is a reported survey--I have seen it many places, but I have never seen the source--that says a poll shows that among the young people in America, more believe in the existence of UFOs than believe Social Security will be available for them when they retire. I have grandmothers come up to me spontaneously on the streets in Utah and tell me how concerned they are their children and grandchildren will not have Social Security. I have people entering the workforce who come to me and say: Senator, my biggest question is, Will Social Security be there for me? And, increasingly, people are sure it is not.

The legislation I introduce today is geared to make sure Social Security will be there for our children and our grandchildren and that it will be there at roughly the same level it is for us; that is, they will not have to accept significantly less than we accept in order to make this program work.

How do we do that in the face of this demographic challenge? How is that possible? Well, one of our colleagues in the Senate for many years, Senator Pat Moynihan of New York, had the answer. Senator Moynihan looked back on how Social Security benefits were calculated, and he said: We calculate the increase in Social Security benefits on the wrong base. I do not want to get too technical, but the term that applies is ``wage-based'' increases for cost of living. Senator Moynihan pointed out the cost of living is not going up as rapidly as wages are. So if we would just adjust the base from wage base to cost- of-living base, a true cost-of-living base--that means we would slow down the rate of growth in benefits, and in slowing down the rate of growth in benefits in that fashion, we would solve the problem. It would become solvent.

That is fine. But what if you are someone who depends upon Social Security as your sole source of retirement? It was never intended that would be the case when it was put in place, but it has become that way for too many Americans. If they were to give up the benefit that comes from an overpayment--that is the form of wage-based adjustments--to go to the true payment of cost of increasing, which is the cost of the Consumer Price Index, it would hurt them. They would give up significant benefits. On the other hand, if you look at people such as Warren Buffett and Oprah Winfrey, they do not really need to have Social Security go beyond the true increase in cost of living.

So the solution is to say, for those who are at the bottom of the economic ladder, we keep Social Security benefits exactly as they are. For Warren Buffett and Oprah Winfrey and those who are at the exact top end of the economic ladder, we take Senator Moynihan's idea and we put it in place and say: You will have to struggle by with a Social Security plan based on the actual increase in cost of living rather than an inflated increase in cost of living.

What about those of us who are in between, the people at the bottom and the people at the very top? For those of us who fall in between those two areas, we get a mix, a blend, if you will, of wage base or cost-of-living base. It is called progressive indexing. All of the details are available in hearings that have been held on this subject which I chaired when I was chairman of the Joint Economic Committee and in other publications that have addressed this question.

What will this do to the actual benefits of the people in Social Security? We have asked the Social Security Administration to tell us. Now, again, these are projections, and as projections, they are subject to some kind of challenge. But they are the best analysis that people can make.

We start out with people who are currently 55; that is, only 10 years away from the 65 retirement date, although Social Security, by the time they get there, will be at 67. But what is going to happen to them under the bill I am introducing?

As shown on this chart, the dark bar is what a 2009 retiree will get. The red bar is what a 2019 retiree will get. These are in constant dollars; that is, an adjustment has been made for inflation. You see in every instance, the 2019 retiree will get more than the 2009 retiree.

Now, this is for the low earner. These are the people who are at the bottom third of our economic structure. Then the medium earner, and the high earner. So you see, in every case, people are made whole and protected.

This last chart is for the max earner, the maximum earner, who, quite frankly, probably does not exist. That would assume that somebody entered the workforce at age 20, earned $106,000 a year the first year, and continued to earn that level going on up through his entire career. The maximum he could possibly draw from Social Security: that would be that one.

But 82 percent of Americans fall in these two categories. So for someone age 55, under this bill, they come out just fine. They have nothing they should worry about.

Well, what about somebody who is 45, a little bit younger? What happens to them? Again, these are the estimates made by the Social Security Administration. Once again, the low earners, they do better under the Bennett plan. The medium earners, they do better under the Bennett plan. The high earners, virtually the same under the Bennett plan.

We can make the statement that we are going to hold everybody harmless. We will adjust Social Security in a way that makes it solvent, while at the same time preserving the same level of benefits we have for those of us who are currently drawing Social Security benefits, and we can see the same level of benefits would be available to those who come after us.

We will reach out all the way to 2075 and see what the estimates are from the Social Security Administration. These are people who will be born in 2010. It is a little hard to make a projection as to how much money they will have when they are not alive yet, but the projections are made.

Once again, under the bill I am introducing today, in 2075, the people at the bottom will do substantially better comparing today's benefit of $800 to the potential benefit of nearly $1,300 because they are the ones who are held harmless in the way Social Security benefits are currently calculated. So

they will get a significant position of significantly greater benefit than they do under current law. The medium earner--well, they also will do better. The high earner also will do better. Even the max earner will come out essentially the same.

Now, I cannot guarantee these numbers. You cannot guarantee with any certainty what the numbers are going to be in 2075. But the fact is that the Social Security Administration, looking over a past version of this bill I have introduced, has said everyone can look forward with some certainty--this is my description of it, not their words--everyone can look forward with some certainty to seeing that his or her Social Security benefits will be roughly the same as the benefits that are being paid to retirees today, and the system will be solvent, not requiring any increase in taxes throughout the life of the system.

We have had a lot of debates about Social Security, and we have had a lot of proposals about Social Security. To my knowledge, this is the only one that can say the two things I have just said; that is, that everybody's benefit, wherever they fall on the economic continuum, will be held at roughly the same level as today's benefit--in the case of the low earners, substantially better--and it can be done without raising any taxes. That is why we call this the Social Security Solvency Act.

Let me go back to the charts I put up in the beginning to stress once again the importance of bringing entitlements under control.

As shown on this chart, this is where we were in 1966 before entitlements started to get out of control. We in the Congress controlled 23 percent of the budget in nondefense discretionary spending and 44 percent of the budget in defense spending. So we controlled the majority. Today, we have shrunk that to the point where we control only 17 percent of the Federal budget, with 21 percent for defense spending, and the mandatory and interest costs have grown to a majority--a significant majority. Looking ahead just 10 years, if we do not do something about the entitlements, the mandatory spending will be 61 percent, 71 percent when you add interest costs. If you divide defense and nondefense in this historic pattern, we will only have 15 percent of the entire Federal budget under our control for nondefense discretionary spending.

We are talking about the largest single expenditure in our peacetime history. As we adopt it, we should do so against the backdrop of what we are looking at in mandatory spending down the road and realize if we are going to be able to afford this stimulus package, we have to have the courage to tackle mandatory spending at the same time.

I yield the floor.

Mr. President, I thank my friend and colleague from Oregon for his kind words. He was not here when I put up one chart which has now been taken away that showed the tsunami of entitlement spending, consisting of a band of three programs. The largest portion of that tsunami band was made up of health care spending. I will confess to having taken the easy route. Social Security is the easiest one to fix because we can make the kinds of changes I described here that go back to the effort started by Senator Moynihan.

Here is the chart. We can see Social Security is the easy one and eventually the small one. Medicare and Medicaid are the ones that are going to overwhelm us. They are the most difficult ones to fix.

So I am honored to have the Senator from Oregon say what he has to say because he has been the leader in recognizing that this challenge; that is, the challenge of dealing with the health care costs, is the tougher challenge, but, as with most tough challenges, it is also the one that will produce the biggest reward. It is where the biggest opportunity lies.

As I have said many times and repeated here on the floor of the Senate, one of the things I realized while working with the Senator from Oregon is that the best way to get all of these costs under control and turn these lines downward is to get quality going in our health care program. The bill I have had the honor to cosponsor, along with the Senator from Oregon, is focused on getting proper quality into our health care system.

If the Senator from Oregon is successful, with whatever help I can give him along with those others who have joined us, he will have made a significant contribution to our country, not only in terms of the benefits that come from having done health care right but from the economic impact of having done health care right. He will have made it possible for us to even consider such expenditures as a target in the stimulus package because this is the backdrop against which we are going to have to pay for those. So I thank the Senator from Oregon for his kind words, but I thank him even more for his valiant effort and his leadership on the whole issue of trying to deal with the health care challenge.

Mr. President, I again stress how grateful I am to the Senator for his leadership and how happy I am to be one of his cadre of loyal followers on this issue.

Mr. President, we are awaiting the conference report on the stimulus package. The papers and the airwaves are full of the fact that this will be the largest expenditure we have made in peacetime perhaps in our history.

I think it well, as we wait for the details of the package, for us to pause for a moment and take a longer look, beyond the recession, beyond the financial circumstances we are facing at the moment, and look down the road at what we are facing as a nation as a whole.

So I am going to make a historic pattern today and then introduce, at the end, a bill I believe is necessary for us to deal with our financial problems. Let's go back a moment in history to the year 1966. Why do I pick 1966? Because that was the year we significantly expanded the entitlement spending in the United States. That was the year we adopted Medicare as a Federal program.

As you see from the chart, at that time the mandatory spending constituted 26 percent of the budget. By ``mandatory,'' I mean spending that we have to do. People are entitled to receive that money whether we have the money or not; it is mandatory under the law.

The largest portion of the mandatory spending in 1966 was Social Security.

We were paying roughly 7 percent of our budget for interest. We had nondefense discretionary spending which was 23 percent. The big item, the big ticket item that dominated the budget in 1966 was defense. It constituted 44 percent of Federal spending in 1966.

Let's see what has happened since that time. Let's see where we are today. In fiscal 2008, this is where we are. The mandatory spending has grown from 26 percent to 54 percent. Interest costs are roughly the same. They were 7 percent; now they are 8. Nondiscretionary spending has shrunk to 17 percent. Defense discretionary, even though we are in a wartime, is 21 percent. It is clear the mandatory spending is taking over control of the Federal budget. And interest costs, of course, are mandatory. We owe those interest costs.

If you add the two together, 54 and 8, you get 62 percent of the Federal budget beyond the control of Congress. That is, when we pass the appropriations bills, when we make our decisions what to spend money for, we are spending money in the minority; whereas, 62 percent majority is out of our control. When you take away the defense spending and assume that has a semimandatory aspect to it and put defense spending in the mix, that means the Congress only has control of 17 percent of the budget, an amazing change in the roughly 40 years from 1966 until today.

What does the future look like? I must make the point that every projection we make around here is wrong. Every projection is an educated guess. But the educated guess of what will happen 10 years from now is that mandatory spending will have grown to 61 percent and interest costs to 10 percent. That is 71. The Congressional Budget Office won't make a guess as to the divide between defense and nondefense discretionary spending. So all discretionary spending will be 29 percent, if we divide it in half, as it has historically been. That means the Congress, just 10 years from now, will only control 10 percent of the Federal budget. All the rest of it will be on automatic pilot. That is a startling thing to look forward to.

So as we talk about the stimulus package, we need to pause and pay a little attention to the entitlement spending that will go on and the kind of spending that will be built up, and we are adding to that with this stimulus.

Here it is in the projections of what it will be. It constitutes a wave. Indeed, it has been referred to almost as a tsunami of spending. It is broken down into the three primary sources of mandatory spending, the three biggest entitlements. At the bottom is the one that is the biggest now, and that is Social Security. But Social Security does not grow as fast as the next one, which is Medicare. And then on top of that is Medicaid. One can see this tsunami of spending will take our mandatory spending, which at the moment is less than 10 percent of GDP, up to more than 20 percent of GDP.

Let me show another chart that illustrates the same point in a slightly different way. You have the same entitlements. We have added in this chart discretionary spending. The solid line across is the average revenue of the Federal Government. It is recorded in percentage of GDP. We have historically had a revenue average of 18.4 percent of GDP. As we can see in 2007, the expenditures were slightly above that line. The largest portion of the expenditure was the combination of defense and nondefense discretionary spending. But the projection, as you go out, you see that at some point the entitlements will take over every dime we take in. The largest portion of it will be Medicare. Social Security will still be there. Medicaid will still be there. Discretionary spending will shrink even further as a percentage of what we are dealing with.

Why is this happening? Is this some kind of a plot that somebody is involved in? No. This is a result of the demographic changes that are occurring in our country. This chart summarizes it with the headline: ``Americans Are Getting Older.''

If you go back to 1950, the percentage of Americans who were age 65 or older was about 7 percent. It grew, the percentage, at a relatively slow level and then actually began to shrink. Why did it begin to shrink, the percentage of Americans 65 and over? This is a reflection of the Great Depression. People had fewer children in the Great Depression. So it follows that 65 years later, there were fewer people who were of retirement age. But following the Great Depression, you had the Second World War and then, when people came home from war, you had what historians refer to as the baby boom. All of those who came as a consequence of that are called the boomers.

Starting in 2008, which is now history, the line started upward in a dramatic fashion. In the next 20 years, we are going to see something happen that has never happened in American history. In the next 20 years, the percentage of Americans who are over 65 is going to double. That is what is driving all the numbers I put up before, all the changes in entitlement spending. These people are already born. This is not a projection that depends on guesses. This is something we can be sure of because the demographics of these folks are already there.

Now the projection is that 20 years from now, when the baby boomers finish retiring, the rate of increase will slow down again and go back to the somewhat gentle rate it was before we got into this situation. But that is the reality we are dealing with. In the next 20 years, the percentage of Americans who are 65 or over is going to double.

Let's look at some of the detail behind these demographics. Seniors are living longer. Not only are we going to get more of them, but they are living longer. That is why that trend is not going to turn down once the baby boomers have been absorbed. If you go back to 1940, after you reached 65 in 1940, if you were a male, your life expectancy was another 12 years, female 13. The chart shows how it has changed. Now if you are male and you reach 65, your life expectancy is another 16 years. If you are female, it is another 19 years. And roughly a short decade away, a male will go to 18 and female to 21. That means all the entitlement programs geared toward our senior citizens are going to be tapped into for many more years than was the case when they were put in place.

If we go back to the history of Social Security, we realize Social Security was something of a lottery. When Social Security started in the 1930s, roughly half of American workers did not survive until they were 65. So it was a lottery with 100 percent of the people paying in and only 50 percent taking anything out. Those who paid in got nothing for having done so. Those who survived to 65 got the benefit of their survival. Now you see they are living longer today, something like 75 or 80 percent of workers who join the workforce at age 20 are still alive at 65, so the lottery doesn't work anymore. Instead of half the people paying into the lottery, not getting anything out, you have more than three-quarters of the people who pay into the lottery getting something out. Then, once they get it, they get it for longer. The life expectancy of Americans is going up, as was shown in the last chart. This

shows the trend lines for male and female.

Again, in 1940, the life expectancy of Americans who had reached 65 was, for males, about 75. When we get out into the future, it will be 86. Put those two facts together. More people survive to 65 and, then, more people who get into the pool over 65 stay there for more years.

All this means that the financial structure of Social Security is simply unsustainable. Social Security cannot deal with these demographic changes. This is not a Republican plot or a Democratic plot. This is the demographics of the reality of the fact that Americans are healthier, living longer, and surviving to older age. So you get this reaction to the Social Security situation.

We go to the next chart that shows how Social Security works, in terms of the lottery I was discussing. In 1945, the program was still in its infancy. So this is a bit of a distortion. There were 42 people working and paying into the program for every one retiree drawing out. As the program matured and more and more of the workers retired, this number very appropriately came down. By 1950, there were still 17 workers paying into the program for every one retiree drawing out. Today there are three workers paying into the program for every one drawing out. With the demographic realities I described in the previous charts, we are looking at a time when there will be two workers for every retiree. That means, if the retiree is going to take out $1,000 a month, each worker has to be putting in $500 a month in order to make that happen and for a long period of time. This is how we have dealt with this demographic change throughout our history. We have dealt with it by raising taxes. Every step along the way, as the number of workers to retirees has gone down, the amount of taxes every worker pays has gone up.

Here is the history of the payroll tax increases: In 1937, you paid taxes on $3,000. That was it. Now it is $106,000. It has gone up and up all the way through.

This is unsustainable. You cannot continue to deal with the demographic changes in Social Security by simply ratcheting up the taxes. You have to do something to stabilize Social Security in a way that it will be there for our children and our grandchildren.

There is a reported survey--I have seen it many places, but I have never seen the source--that says a poll shows that among the young people in America, more believe in the existence of UFOs than believe Social Security will be available for them when they retire. I have grandmothers come up to me spontaneously on the streets in Utah and tell me how concerned they are their children and grandchildren will not have Social Security. I have people entering the workforce who come to me and say: Senator, my biggest question is, Will Social Security be there for me? And, increasingly, people are sure it is not.

The legislation I introduce today is geared to make sure Social Security will be there for our children and our grandchildren and that it will be there at roughly the same level it is for us; that is, they will not have to accept significantly less than we accept in order to make this program work.

How do we do that in the face of this demographic challenge? How is that possible? Well, one of our colleagues in the Senate for many years, Senator Pat Moynihan of New York, had the answer. Senator Moynihan looked back on how Social Security benefits were calculated, and he said: We calculate the increase in Social Security benefits on the wrong base. I do not want to get too technical, but the term that applies is ``wage-based'' increases for cost of living. Senator Moynihan pointed out the cost of living is not going up as rapidly as wages are. So if we would just adjust the base from wage base to cost- of-living base, a true cost-of-living base--that means we would slow down the rate of growth in benefits, and in slowing down the rate of growth in benefits in that fashion, we would solve the problem. It would become solvent.

That is fine. But what if you are someone who depends upon Social Security as your sole source of retirement? It was never intended that would be the case when it was put in place, but it has become that way for too many Americans. If they were to give up the benefit that comes from an overpayment--that is the form of wage-based adjustments--to go to the true payment of cost of increasing, which is the cost of the Consumer Price Index, it would hurt them. They would give up significant benefits. On the other hand, if you look at people such as Warren Buffett and Oprah Winfrey, they do not really need to have Social Security go beyond the true increase in cost of living.

So the solution is to say, for those who are at the bottom of the economic ladder, we keep Social Security benefits exactly as they are. For Warren Buffett and Oprah Winfrey and those who are at the exact top end of the economic ladder, we take Senator Moynihan's idea and we put it in place and say: You will have to struggle by with a Social Security plan based on the actual increase in cost of living rather than an inflated increase in cost of living.

What about those of us who are in between, the people at the bottom and the people at the very top? For those of us who fall in between those two areas, we get a mix, a blend, if you will, of wage base or cost-of-living base. It is called progressive indexing. All of the details are available in hearings that have been held on this subject which I chaired when I was chairman of the Joint Economic Committee and in other publications that have addressed this question.

What will this do to the actual benefits of the people in Social Security? We have asked the Social Security Administration to tell us. Now, again, these are projections, and as projections, they are subject to some kind of challenge. But they are the best analysis that people can make.

We start out with people who are currently 55; that is, only 10 years away from the 65 retirement date, although Social Security, by the time they get there, will be at 67. But what is going to happen to them under the bill I am introducing?

As shown on this chart, the dark bar is what a 2009 retiree will get. The red bar is what a 2019 retiree will get. These are in constant dollars; that is, an adjustment has been made for inflation. You see in every instance, the 2019 retiree will get more than the 2009 retiree.

Now, this is for the low earner. These are the people who are at the bottom third of our economic structure. Then the medium earner, and the high earner. So you see, in every case, people are made whole and protected.

This last chart is for the max earner, the maximum earner, who, quite frankly, probably does not exist. That would assume that somebody entered the workforce at age 20, earned $106,000 a year the first year, and continued to earn that level going on up through his entire career. The maximum he could possibly draw from Social Security: that would be that one.

But 82 percent of Americans fall in these two categories. So for someone age 55, under this bill, they come out just fine. They have nothing they should worry about.

Well, what about somebody who is 45, a little bit younger? What happens to them? Again, these are the estimates made by the Social Security Administration. Once again, the low earners, they do better under the Bennett plan. The medium earners, they do better under the Bennett plan. The high earners, virtually the same under the Bennett plan.

We can make the statement that we are going to hold everybody harmless. We will adjust Social Security in a way that makes it solvent, while at the same time preserving the same level of benefits we have for those of us who are currently drawing Social Security benefits, and we can see the same level of benefits would be available to those who come after us.

We will reach out all the way to 2075 and see what the estimates are from the Social Security Administration. These are people who will be born in 2010. It is a little hard to make a projection as to how much money they will have when they are not alive yet, but the projections are made.

Once again, under the bill I am introducing today, in 2075, the people at the bottom will do substantially better comparing today's benefit of $800 to the potential benefit of nearly $1,300 because they are the ones who are held harmless in the way Social Security benefits are currently calculated. So

they will get a significant position of significantly greater benefit than they do under current law. The medium earner--well, they also will do better. The high earner also will do better. Even the max earner will come out essentially the same.

Now, I cannot guarantee these numbers. You cannot guarantee with any certainty what the numbers are going to be in 2075. But the fact is that the Social Security Administration, looking over a past version of this bill I have introduced, has said everyone can look forward with some certainty--this is my description of it, not their words--everyone can look forward with some certainty to seeing that his or her Social Security benefits will be roughly the same as the benefits that are being paid to retirees today, and the system will be solvent, not requiring any increase in taxes throughout the life of the system.

We have had a lot of debates about Social Security, and we have had a lot of proposals about Social Security. To my knowledge, this is the only one that can say the two things I have just said; that is, that everybody's benefit, wherever they fall on the economic continuum, will be held at roughly the same level as today's benefit--in the case of the low earners, substantially better--and it can be done without raising any taxes. That is why we call this the Social Security Solvency Act.

Let me go back to the charts I put up in the beginning to stress once again the importance of bringing entitlements under control.

As shown on this chart, this is where we were in 1966 before entitlements started to get out of control. We in the Congress controlled 23 percent of the budget in nondefense discretionary spending and 44 percent of the budget in defense spending. So we controlled the majority. Today, we have shrunk that to the point where we control only 17 percent of the Federal budget, with 21 percent for defense spending, and the mandatory and interest costs have grown to a majority--a significant majority. Looking ahead just 10 years, if we do not do something about the entitlements, the mandatory spending will be 61 percent, 71 percent when you add interest costs. If you divide defense and nondefense in this historic pattern, we will only have 15 percent of the entire Federal budget under our control for nondefense discretionary spending.

We are talking about the largest single expenditure in our peacetime history. As we adopt it, we should do so against the backdrop of what we are looking at in mandatory spending down the road and realize if we are going to be able to afford this stimulus package, we have to have the courage to tackle mandatory spending at the same time.

I yield the floor.

Mr. President, I thank my friend and colleague from Oregon for his kind words. He was not here when I put up one chart which has now been taken away that showed the tsunami of entitlement spending, consisting of a band of three programs. The largest portion of that tsunami band was made up of health care spending. I will confess to having taken the easy route. Social Security is the easiest one to fix because we can make the kinds of changes I described here that go back to the effort started by Senator Moynihan.

Here is the chart. We can see Social Security is the easy one and eventually the small one. Medicare and Medicaid are the ones that are going to overwhelm us. They are the most difficult ones to fix.

So I am honored to have the Senator from Oregon say what he has to say because he has been the leader in recognizing that this challenge; that is, the challenge of dealing with the health care costs, is the tougher challenge, but, as with most tough challenges, it is also the one that will produce the biggest reward. It is where the biggest opportunity lies.

As I have said many times and repeated here on the floor of the Senate, one of the things I realized while working with the Senator from Oregon is that the best way to get all of these costs under control and turn these lines downward is to get quality going in our health care program. The bill I have had the honor to cosponsor, along with the Senator from Oregon, is focused on getting proper quality into our health care system.

If the Senator from Oregon is successful, with whatever help I can give him along with those others who have joined us, he will have made a significant contribution to our country, not only in terms of the benefits that come from having done health care right but from the economic impact of having done health care right. He will have made it possible for us to even consider such expenditures as a target in the stimulus package because this is the backdrop against which we are going to have to pay for those. So I thank the Senator from Oregon for his kind words, but I thank him even more for his valiant effort and his leadership on the whole issue of trying to deal with the health care challenge.

Mr. President, I again stress how grateful I am to the Senator for his leadership and how happy I am to be one of his cadre of loyal followers on this issue.

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

Mr. President, I have been listening to the criticisms of the recovery and reinvestment plan from the other side of the aisle, and I have tried to put them into categories so I can address them and consider them. The first complaint appears to be that this is an $800 billion stimulus package which will add to our deficit.

There is no question about the premise. The facts are right. It is $800 billion, and it will add to our deficit. But I find it interesting that the Republicans who are criticizing this come from the same party which, over the last 8 years, saw America's national debt double from $5 trillion to $10 trillion and they went along with all of it. When the President wanted a war and did not want to pay for it, which added to the debt of the country, they voted for it. The final cost was about $800 billion, and it is still accumulating. When the President wanted tax cuts in the midst of a weak economy, which added to the deficit-- and cuts that went primarily to the wealthiest people--his Republican Party supported him and no questions asked.

In fact, the argument for many years was that deficits don't matter, when President Bush was in the White House, during that 8-year period of time. Now deficits do matter. It is an accumulated debt of America. It has a lot of negative impact on our economy. But for a party which ignored this reality for so many years to come and tell us now, in the midst of the worst economic crisis in modern times, that

we have to be so careful of the deficit we cannot address this economic crisis, is a little hard to take. That is the first point.

The second point is they criticize this package for costing too much, when in fact on two separate occasions Republican Senators offered amendments to this package which added to the costs dramatically. In the Senate Finance Committee, the Republican Senator from Iowa offered an amendment that added $70 billion in cost to this package. It passed with the support of both parties, I will add. At the end of the day, the package cost $70 billion more, and the Senator from Iowa said he couldn't vote for the final work product because it was too expensive. He had authored an amendment that added $70 billion in cost and then said he couldn't vote for the package because it was too expensive.

Another Senator, from Georgia, added an amendment on the floor--I thought it was a thoughtful amendment--that added in cost $11 billion to $30 billion, by some estimates, to give incentives for people to buy homes. It makes sense. We need help in the housing market. Yet this added expense on the bill, this added amendment, which we adopted, could not win that Senator's support. He too was critical of the final product: It cost too much.

So it is hard to follow why so many Republican Senators are criticizing the President's attempt to get this economy back and moving forward, because they are saying it cost too much, when they introduced and passed amendments which added to the cost of the package. It doesn't follow.

And the third point, made by the Republican leader, who came to the floor today and criticized the compromise--the final bill here that we will consider probably tomorrow night--said they cut back on some of the tax cuts for working families.

It is true. The President's original proposal was $500 for individuals, I think it was up to $70,000 or $80,000 in income, and $1,000 for families. Then when we had to cut back in the cost of the overall bill to win the support of several Republican Senators, the President offered to make a cutback in that area. So when we try to cut back in the cost of the bill to win Republican support, we are criticized for those cutbacks; and when the bill comes to the committee, or to the floor, Republican Senators add amendments that add cost to the bill and then tell us it costs too much. It is hard to follow their logic. I can't.

I am glad that it appears, with our fingers crossed, that there will be at least 60 Senators tomorrow when we vote on this bill that will do something about the state of our economy. This President has inherited the worst economic crisis of any President since Franklin Roosevelt's in 1933. This situation is terrible. It is no Great Depression, thank goodness, but it is terrible. We have lost jobs all over America-- 500,000 jobs in the month of December--and 36,000 of them, incidentally, in my home State of Illinois. That is 1,200 jobs a day we have lost in my State in December, I am afraid a like number in the month of January, and there is no end in sight.

The President has stepped up and said: We cannot let the American economy slide into this spiral that is going to create so much hardship for workers losing their jobs and businesses closing. We have to do something. We need a solution. We can't stand back and watch the parade go by. We have to step in and try to stop the negative impact of this economic crisis.

Most Americans--in fact, the overwhelming majority of Americans-- believe the President is right in trying to solve this problem. He has said, and they understand, this may not be a 100-percent solution. At the end of the day, we may need to do more or something different. But the alternative is to do nothing, and that seems to be the position of many Senators who are opposing this. They want to wait. They want to wait and see if this economy gets better or they want to return to the old-time religion. What is the old-time religion? It is what we tried last April. When the economy was softening, President George W. Bush came to us and said: I know the solution. I know how to get us out of this problem. It is a tax cut.

Well, if you have been around Congress for a while, you know that when it comes to the Republican Party, the answer to every challenge, every issue, every circumstance is a tax cut. We have a surplus. Is the economy booming? Cut taxes. Do we have problems. Is the economy cratering? Cut taxes. Well, tax cuts do have value, but in certain circumstances they may not work effectively. And we found out last April that our $150 billion package--and I think that was the number-- that President Bush asked for, enacted by the Democratic Congress, didn't work. I believe it was $300 to individuals and $600 to families. It may have helped an individual family put some money in savings or pay off a credit card, but at the end of the day, when you step back and look at the big picture--the macroeconomic picture--it didn't work. The economy continued to slide downhill.

So the magic elixir of tax cuts, which we hear consistently from the Republican side, even during this crisis, is one that has been tried and failed.

We included tax cuts in this package in an effort to try to win over some Republican votes. It didn't work very well. We got no Republican support in the House and only three Republican Senators who stepped up in the Senate and said they would support it.

What we are trying here is something that is dramatically different; not just tax cuts for working families, which they need, but injecting money into the economy. Why do we need to have the government spending money in this economy? Because Americans are not spending enough of their own money. We anticipate that this year Americans will spend about $1 trillion less on goods and services than they ordinarily would.

We have a gross domestic product of about $14 trillion a year. Well, that is about 7 or 8 percent of it that won't be spent this year. And when you cut back in that much spending, when people are not buying the things they buy--refrigerators and cars and homes and clothing, and all the rest--jobs are lost, businesses contract, and our recession gets deeper. So the President said: Let's put this money into a stimulus or recovery package that will inject new life into this economy and try to get it moving forward again.

It turns out economists--conservatives, liberals, most economists-- have said it is worth a try. Historically, it has worked; we should do it now. And the President went further. He said that our goal will be creating or saving 3\1/2\ million jobs over the next 2 years. That is an ambitious goal, and I hope we can reach it.

I know those on the other side criticize it. They say: You know what, when you take the total cost of this bill and divide it into the number of jobs, it is a fantastic amount of money for each job. But they have forgotten one basic thing: That new worker in Illinois or in Iowa is not only going to get a paycheck, that worker is going to spend the paycheck. And when the worker spends the paycheck downtown, the people who work at that shop have a job, too. And the people who work at the shop with the job take a paycheck home, and they will go to another shop and spend the paycheck. It moves through the economy over and over again. So to argue that we are spending so much money for a single job overlooks the obvious, overlooks Economics 101. I think I learned this in Georgetown in one of the first classes. It is called the multiplier. That says if I go out and spend a dollar at shop, then maybe 80 cents of that is going to be spent by a worker there, and on and on. So the dollar may turn out to be worth a lot more in terms of the economic activity.

That is the President's goal, to create enough jobs and save enough jobs to breathe life into this economy to start people moving forward again with confidence in making purchases. That is the bottom line.

It also provides, this bill we are going to consider tomorrow, 40 percent in direct relief to working and middle-class families. I talked about the President's tax cuts. He focuses on the working and middle- class families. I think it is the right thing to do. It is about $400 an individual, $800 for a family. That will give them a helping hand.

It also doubles the renewable energy generating capacity of our country over 3 years. Is there anyone who doubts the President's position that if we are going to have a strong economy over a long term we need to have more

energy independence, we need to have more renewable sustainable sources of energy right here in our country? This bill, this stimulus package, invests in energy for America's future--good energy, reliable energy, energy that we do not have to bargain with OPEC to have in future years to build our economy.

It invests $29 billion in the Clean Energy Finance Authority and renewable tax credits. This is a way to encourage the renewable energy sector. In my State of Illinois, in the State of Iowa and a lot of other States, you see the wind turbines when you drive down the highway. In one section of central Illinois are 240 wind turbines that will generate enough clean electricity to supply the electricity needs of Bloomington-Normal, a large--at least by Illinois downstate standards--metropolitan area. More and more of these need to be built. Solar panels, using wind energy, geothermal sources, all of these are clean, thoughtful, homegrown, and make us less dependent on energy sources from overseas.

There is also a dramatic investment, $150 billion, in infrastructure. Infrastructure is a generic word that does not paint a very specific picture. We are talking about roads and bridges and highways. We are talking about making certain that what we have in our State and States across the Nation is in good repair and safe, and is expanding opportunities for the economy to grow by building these roads and bridges for the future. It is money well spent, as far as I am concerned.

And health care, too. The first casualty for unemployed workers is usually health insurance, so we want to help the families facing unemployment with the costs of health insurance. That to me is money well spent. These families need the peace of mind to know that if somebody gets sick they have a doctor they can go to and a medical bill that at least will get a helping hand to be paid.

There is $25 billion for school construction--no, not for new buildings but modernizing schools. If you bring energy efficiency to a school, it is going to reduce the cost to the school district and to the property taxpayers who sustain that district.

Mr. President, I ask unanimous consent for an additional 5 minutes.

In addition to that, we are going to try to make sure this bill moves us forward when it comes to health care. One of the things we need to do in America, which we have done in the Veterans' Administration, is start putting medical records on computers. The importance of that is obvious to anyone who has visited a modern hospital. You know if a doctor has access to all of your medical records on computer, or a nurse, that they are more likely to make a better diagnosis, come up with better treatment, save money in the process and have a safer outcome. So if we are going to move toward a health care system ready for this century, we need to bring the Internet into the hospital room and into the hospital setting. This bill makes the investment to do that. It is a critically important investment and it is the starting point I think in moving toward the health care system we need to provide for Americans.

There will be critics. Many of them want to do nothing, let the economy solve its own problems. But most of them are not students of history. The last President facing a major economic crisis, who said let's ride it out, was Herbert Hoover. Herbert Hoover, a Republican President during the Great Depression, said things will get better, the economy will cure itself, the market is a miracle. Guess what happened. More and more people lost jobs, more businesses failed, the stock market cratered and Franklin Roosevelt rode to the rescue.

We have to understand that standing back and watching this economy crater is unacceptable. This President was elected last November 4 to bring real change to this town in the way we do business and real change to this economy so we have a fighting chance for excellence in the 21st century. I think he has the right approach.

Let me add another element. There is a big section of this bill that demands accountability. All of us, whether we voted for or against President Bush's attempts to help the economy--all of us were frustrated at the end of the day that so few dollars could be accounted for. We gave them $350 billion. At the end of the day we wanted an accounting--those who voted for it and for the taxpayers. We couldn't get it. We still don't know what happened to the money.

This bill is different. This bill not only is going to provide inspectors general in each of the departments to watch the money as it is being spent, accountability through the States and through the local units of government, but Web sites as well for taxpayers to follow the course of this bill. It is a new level of openness and transparency we have not seen before and it is long overdue. I am glad it is there. I think that kind of openness is what the American taxpayers want to see, too.

They want solutions, they do not want political squabbling. They want to have people working together here rather than like in the House of Representatives, where no Republicans would even support the idea of a stimulus package. They want accountability, transparency--so they know their Federal tax dollars are being spent wisely--and they want honesty too. This President has been honest from the beginning and he said: I believe this will work. The best minds in the economy tell me this will work. If it does not, we are going to try something that does. We are going to be honest with you about the outcome here.

That is the best we can ask from our leaders, that they give it their best effort, good-faith efforts to solve our problems and be honest with us if they do not succeed. We need to succeed. There is too much at stake here.

I have seen it in Illinois. We have seen it all across this country. This particular proposal for Illinois is one I am excited about, creating or saving 148,000 jobs over the next 2 years. We need it. As I mentioned, we lost 36,000 jobs in December. We need to do something to stop this outflow of jobs.

A making work pay tax cut of up to $800 will affect about 5 million workers and their families in my State; 156,000 families are going to be eligible for an American opportunity tax credit, which makes college affordable. When I talk to college presidents, they tell me: I am worried. Kids are coming into the dean's office and saying: Dad's business is going down or Mom lost her job. I may not be able to finish here.

Let's give these families a helping hand, a tax credit so these kids can stay in school. If these young people end up dropping out of school with a mountain of student loans and no degree, that's the worst possible outcome. This will help us avoid it.

An additional $100 a month in unemployment insurance for those who lost their job doesn't sound like much to most families, but for these folks $100 means an awful lot.

We are providing funding sufficient to modernize 412 schools in Illinois so our children have the labs and classrooms and libraries and energy efficiency they need.

We are doubling the renewable energy generating capacity. I think there will be more wind turbines that will be installed in my State. There will be some happy farmers renting their plots of land for that and some communities that will have cleaner energy sources.

This is a bill that looks forward. To those looking in the rearview mirror of what we tried last year and want to try it again--we gave them their chance and it didn't work. It is worth a try now. I am glad three Republican Senators stepped forward and said they are willing to give this President a chance. It shows the kind of bipartisan cooperation we need more of.

I hope at the end of the day even more will vote for this and I hope the next time we debate an important issue on the floor that more Senators from both sides of the aisle will come together to solve the problems the American people face and do the job they sent us here to do.

I yield the floor.