Floor Statements

Mr. President, I rise today to speak not only on the fiscal year 2007 budget resolution that has been placed before this body but also on the environment in which Chairman Gregg has had to write the resolution.

First of all, I thank our chairman for his yeoman effort to bring this budget to the floor. Chairman Gregg has produced a very strong effort under difficult circumstances.

For once, I am excited to see the chairman's limitation on the use of ``emergency'' designations for the fiscal year 2007 budget. While utilizing ``emergency'' spending may be necessary, Senator Gregg has put in place a process to force us to reflect on what should be deemed as an ``emergency'' and consequently sidestep the regular budgetary process versus what should be moved as part of the regular appropriations process. In other words, all of us feel that in terms of our emergency spending, much of it should be actually in the regular budget resolution rather than considered as emergency spending.

I also applaud the chairman's inclusion of a new point of order against direct spending that would apply once it was determined that the general fund would contribute more than 45 percent of total Medicare outlays. This new point of order serves to highlight what all of us know is decimating future budgets--the impending costs of Medicare and other entitlements.

While I respect the efforts required in producing this budget, and the effort to try to comply with the cap that the President issued, it is the view of this Senator that the budget falls short of meeting the current pressing needs of our country, and those sentiments are reflected in some of the amendments that have and will later be offered to the budget.

Each of us must be able to justify our actions on behalf of our constituents. During my first biennial budget, as Governor of Ohio, I had to go back to the budget four separate times to find additional areas to cut. But after cutting program after program, I could not justifiably say I provided for the public good by slashing more. Indeed, I made the difficult choice to ask the legislature to increase taxes at the margins. After keeping spending to its lowest growth in 30 years, we were able to reduce taxes my last 3 years in office. But we did take care of the needs of the people of the State of Ohio.

I am not calling for raising revenues at this time. However, I am calling attention to what I view as a lackadaisical attitude toward what I believe is a freight train bearing down on our fiscal house. I voted for tax cuts in 2001, 2002, and 2003. In 2001, we were projecting surpluses beyond the horizon, I think a $5.4 trillion surplus in 10 years. We believed those surplus funds were better utilized in what I called the three-legged stool of fiscal responsibility--pay down the debt, spending restraint, and returning excess funds to households so as not to be unwisely spent.

In 2002, I supported additional tax cuts to stimulate our economy in the aftermath of September 11. And in 2003, our country was still reeling from September 11, the war against terror, and corporate accounting scandals. We needed additional stimulative medicine. I fought to ensure that the amount we passed was the right amount. I said that $350 billion in tax cuts would be enough to get the economy moving, and I believe that it worked.

However, the world does not stand still, and we now face different challenges. Since that time, the economy has grown. The Nation's GDP grew by 4 percent in both 2003 and 2004 and 3.5 percent in 2005. Unemployment has dropped since we enacted the tax cuts from 6.6 percent to the current 4.8 percent. I wish it were as good in the State of Ohio as that, but overall that is what it is. While the tax cut stimulation worked, making these tax cuts permanent should be subject to pay-go. I am sorry today that we didn't have the votes to do that.

While the economy has been renewed, our Nation has had to pay for the extraordinary expenses of Iraq and Afghanistan, as well as responding to our concern for homeland security for

which, since 2001, we have tripled governmentwide spending related to nondefense homeland security, and on top of that add in the expenses of Hurricane Katrina. What I am saying is that with the 22 agencies we brought together after 2001, 180,000 people, we have tripled the budget of those agencies since 2001. While we are dealing with all these expenses, we are ignoring the 800-pound gorilla in the room: the impending tidal wave of entitlements coming due. In his State of the Union Address, President Bush acknowledged that:

The retirement of the baby boom generation will put

unprecedented strains on the federal government. By 2030,

spending for Social Security, Medicare, and Medicaid will be

almost 60 percent of the entire federal budget. And that will

present future Congresses with impossible choices--staggering

tax increases, immense deficits, or deep cuts in every

category of spending.

I am pleased that the President decided to focus on what some have called the demographic tsunami coming our way and the necessity to reform entitlement programs before it hits. The 77 million baby boomers coming into Social Security and Medicare Programs will put the Federal budget under unprecedented pressure. Chairman Gregg took the courageous step to take on entitlement spending through the Deficit Reduction Act of 2005, and I supported those efforts. However, this was just the tip of the iceberg. I would support greater efforts to continue to debate on entitlement reform so that we may make wise decisions and not decisions stemming from unneeded dawdling and delay.

No matter which way you look at it, if we leave reform of entitlement programs to future Congresses to handle as well as a mountain of national debt to pay off, it will have devastating consequences on the economy and our children.

We owe it to the American people to let them know the true condition of our Federal budget. Currently, governmental expenditures absorb about 20 percent of the GDP, while our tax receipts are only 17.5 percent of GDP. The debt has grown from about $5.5 trillion when I first came into office in 1999 to a staggering $8.1 trillion today. That is a 47-percent increase. The debt service alone threatens to gobble up revenues in the near future.

According to the CBO, in fiscal year 2005, interest on the public debt grew more rapidly than any other major spending category, rising 14 percent above the fiscal year 2004 level. Without major spending cuts, tax increases, or both, the national debt will grow more than $3 trillion through 2010 to $11.2 trillion according to GAO--nearly $38,000 for every man, woman, and child in the United States. The interest alone will cost $561 billion in 2010, the same as today's budget for the Pentagon. Think of that.

However, we all know that the real problem is our long-term debt. I might mention in terms of our interest costs, if the central banks of foreign countries that are investing in our debt decide to redo their portfolios, we are really going to be in trouble because we will see our interest costs spike dramatically.

By the General Accounting Office's own estimates, about 35 years from now, when my grandchildren have their own children to care for, balancing the budget will require actions as large as cutting total Federal spending by 60 percent or raising taxes to 2\1/2\ times today's levels. Think about that. And if we are going to be honest with the American people about the shape of our fiscal house, we should be honest on budgeting. Accrual accounting is what we require private businesses to use in presenting their finances to give an honest snapshot. On an accrual basis, our Federal deficit for fiscal year 2005 was $760 billion, representing an increase of $144 billion or 23 percent over the previous year's deficit of $616 billion. That is a stark difference from the $319 billion deficit that was reported. That is what we told the American people: It is $319 billion. Under this convenient Government accounting, it made it look as if we had a decrease in the deficit of $93 billion from the previous year's deficit of $412 billion.

Frankly, if the Treasury Department already has the numbers, why don't we use the accrual method of accounting for our budget? I want to remind the American people again, as well as my colleagues in the Senate, that the true deficit in 2005 was $760 billion--an increase of $144 billion or 23 percent over the previous year's deficit.

I have also introduced a bill called the Truth in Budgeting Act, cosponsored by Senator Conrad, which stops the Federal Government from using surplus trust fund revenues to hide the true size of the Government's deficit and highlighting the true size of the Federal debt by forcing the Government to increase borrowing from the public to cover general fund expenses. It is important to have an honest accounting of where we are and where we are headed from a fiscal perspective. We need to change the current Federal accounting and reporting model and budgeting systems to better reflect the Government's true financial condition. This will bring about greater transparency and accountability in Government operations and really let the American people know what is happening here in Congress.

Additionally, if we are to be honest about the budget, we should make reasonable assumptions. The administration's budget assumes enactment of more than a dozen user fees totaling $3.2 billion in 2007 to offset discretionary spending increases. The user fee proposals in the budget include an increase in airline passenger security fees, changing some veterans' enrollment fees for medical care--which, by the way, was rejected by the Senate today 100 to 0--increased TRICARE enrollment fees and deductibles for military retirees under 65, regulatory fees for explosives, and Food Safety and Inspection Service user fees. These proposals have been rejected by Congress in the past and are unlikely to materialize. What they will do is, because that money is not going to come in, it is just going to squeeze other priorities.

Additionally, we are not being honest about the Medicare physician fee schedules. Physicians are reimbursed for treatment of Medicare patients through that fee schedule. Right now, physicians are facing another 5 percent decrease in their Medicare payment on January 1, 2007. Reducing physician payments will have a direct negative impact on seniors' access to quality health care. Last year, we responsibly offset funding to avoid a scheduled 4-percent reduction. We included a freeze in their payment rates in the deficit reduction bill. It has become evident that we must face this annually, but never truly budget for it. In other words, we know that we can't cut the reimbursement for doctors in this country for Medicare patients, but we just assume that we are going to do it, at least the administration does, knowing full well that Congress is going to have to come in with that additional money--in this case, $1.5 billion--and that means that there is just going to be less money for other priorities that we have on our domestic side of the budget.

The administration's budget also accounts for an extension of AMT relief in 2006 but not for 2007 or the rest of the 5-year budget window. The administration says that a permanent solution to the AMT issue should be enacted as part of tax reform. However, the likelihood of Congress passing tax reform this year, as much as I would like to see it since I offered the legislation calling for the blue ribbon panel on tax reform, is slim to none. I feel bad that the administration has backed away from tax reform as a priority since simplifying the Code to make it more simple, fair, and honest could, by some estimates, save taxpayers $260 billion in costs associated with preparing their taxes. That is across the country. Saving that cost would be a real tax reduction and not cause the Treasury to lose one dime of lost revenue.

The question we must ask ourselves is, If we don't have enough revenue to pay our current bills, how in the world are we going to prepare to cover much larger future promises? The simple fact is that we can't have it all. We need to set priorities. We need to make choices; otherwise, our children will end up paying for it.

Our forefathers recognized the inequity of passing on debt to future generations. George Washington in his farewell address stated:

[likewise avoid] the accumulation of debt, not only by

shunning occasions of expense, but by vigorous exertion in

time of peace to discharge the debts which unavoidable wars

may have occasioned, not ungenerously throwing upon posterity

the burden which we ourselves ought to bear.

In other words, throwing the cost of a war on to the next generation. Frankly, if we are willing to be honest with ourselves and make the hard decisions, the last thing we should be doing is talking about making tax cuts permanent. If we are to be honest and forthright with the American people, we should be asking them to pay for the extraordinary cost of the war and improving our homeland security. Because if we are not willing to do so, it will not be Members of this body who are going to be paying the tab. We will be gone. Instead, repayment of the debt will land squarely in the lap of our children and grandchildren. I don't know any parents or grandparents who would think it was a good idea to run up huge personal debts that their children and grandchildren would have to pay at the time of their death, but that is exactly what we are doing with our Federal budget--passing it on to our children and grandchildren. The major reason I sought reelection to this venerable body was to make sure that was not going to be our legacy or the legacy I left my three children and seven grandchildren and my fellow Americans.

According to the administration's fiscal year 2000 budget, mandatory spending will take up 54 percent of the $2.8 trillion budget; net interest we will have to pay on the debt will eat up 9 percent; 18 percent would be allocated for the defense discretionary budget, leaving 19 percent for all the discretionary programs or about one- fifth of the budget. And what we have been doing the last couple of years is flat-funding discretionary spending, the real increases in this budget. People say: You are spending money. The money is being spent on the war and on homeland security. And in terms of discretionary nondefense spending, we basically have flat-funded that.

As I quoted, by the administration's conservative estimate, the programs on auto-pilot, such as Social Security, Medicare, and Medicaid, will account for over 60 percent of the budget by 2030. That does not leave much for all other governmental obligations we have. We are putting the squeeze on just one-fifth of the budget while the rest sees large increases.

We must make entitlement reform a priority, but in the meantime, we should not pretend that by flat funding or cutting nondefense, nonhomeland security needs or programs that work and serve a critical governmental purpose will get the job done. Some of these programs actually save the Government money by benefiting the economy or avoiding further costs down the road.

The point is that in this global economy, we are confronted with the most competitive environment our Nation has ever faced, at least in my lifetime. Anyone who has read Tom Friedman's book ``The World is Flat'' or read the National Academy of Sciences report ``Rising Above the Gathering Storm'' gets it. They get it.

In the big picture of where the United States stands, it is clear to me that the economic framework of our Nation needs to be refurbished. There are certain investments and responsibilities that this Senator believes we can no longer ignore and must address. We should be rebuilding an infrastructure of competitiveness so that future generations can compete in that global marketplace and have at least the same opportunity to enjoy our standard of living and quality of life.

We cannot remain competitive without a workforce full of educated and motivated young Americans. As a nation, we have to invest in our children and enable them to fully develop their God-given talents in order to compete in a knowledge-based global economy. This means we have to place more emphasis on careers in science, engineering, and math. And right now we are not getting the job done.

Globally, the United States ranks 17th in proportion to college aid population earning science and engineering degrees, down from third place several decades ago. In fact, the percentage of 24-year-olds with science or engineering degrees is now higher in many industrialized nations, including England, South Korea, Germany, Australia, Singapore, Japan, and Canada. All produce a higher percentage of science and engineering graduates than the United States.

The National Academy of Sciences released a report this fall that recommends action that the Federal Government should take to enhance our ability to compete in our global economy. The recommendations range from those that will improve our Nation's math and science coursework and establish a workforce of qualified teachers who will prepare our students for futures in highly innovative careers, to the crucial need for energy independence, and an investment in research.

I am encouraged the President recognized that America needs to wake up and build a new infrastructure for competitiveness, and I applaud his American competitiveness agenda.

Also, I have joined a number of my colleagues as an original cosponsor of the Protecting America's Competitive Edge Act of 2006, PACE. This legislation is aimed at improving our Nation's competitiveness through advancements in and emphasis on math and science education. Like the President's initiative, this legislation is comprehensive in its aim to increase our Nation's research capacity, emphasize strong science and math education, but it will require a national commitment to reengage our Nation's youth in science and math, similar to our response in the late 1950s to Russia's launch of Sputnik and the ensuing space race.

In order to implement PACE, it is going to take $10 billion a year for the next 10 years, including making the research and development tax credit permanent. That money is not in this budget. That money is not in this budget.

Funding for nuclear engineering programs truly showcases the disconnect between our stated priorities and the budget. The administration and numerous Members in this body are supportive of the recommendations in the National Academy's report, which also highlighted the importance of moving toward greater energy independence. However, the administration's budget zeroes out funding for the Department of Energy's University Nuclear Reactor Infrastructure and Education Assistance Program from $27 million in fiscal year 2006--it is a relatively innocuous amount within the context of a $2.6 trillion budget. But with our renewed focus on our Nation's competitiveness and the need to address our education and energy policies, it doesn't make sense to eliminate this program. That is what we see all the way through this budget.

Additionally, beyond our human capital infrastructure needs, our physical infrastructure needs are facing a real dilemma as well. In other words, we have to build that infrastructure of competitiveness. We are not getting it done. We desperately need to provide increased funding for the Army Corps of Engineers, including funding for levees and additional civil engineers. This Nation has an aging national water resources infrastructure. If we continue to ignore the upkeep, the deterioration of locks, dams, flood control projects, and navigation channels, we risk disruptions in waterborne commerce, decreased protection against floods, as we saw in Katrina, and other environmental damage.

I have been concerned about the backlog of unfunded Corps projects since I was chairman of the Subcommittee on Transportation and Infrastructure in 1999 and 2000 on the Environment and Public Works Committee. When I arrived in the Senate in 1999, the operation and maintenance deficit was about $250 million. Today it is $1.2 billion. In 2001, there was $38 billion in active resources projects waiting to be funded. Today there is $41 billion in active construction general projects that need to be funded. This budget is only going to increase this backlog.

This budget proposes a 33-percent cut in the Corps construction budget and a 42-percent cut in the Corps investigations budget. Currently, the Corps is able to function only at 50-percent capacity at the rate of funding proposed by this budget. Listen to this: Currently the Corps is able to function only at 50-percent capacity at the rate of funding proposed by this budget.

Can you believe this, after the lesson we learned from Hurricane Katrina? We had people testify before the Environment and Public Works Committee who were a part of the American Civil

Engineers Society saying that if we had properly funded the levees in New Orleans, they would have survived Katrina.

Let's talk about our highways. According to the Federal Highway Administration 2002 Conditions and Performance Report, $106.9 billion through 2020 is needed to maintain and improve our highways and bridges. We are just not getting the job done.

Community development block grants, which was spoken to by Senator Murray earlier, is another example. These grants support State and local government-directed neighborhood revitalization, housing rehabilitation, and economic development activities. I know in my time being mayor of the city of Cleveland how important CDBG is in terms of providing funds to local government officials so they can do housing rehabilitation, neighborhood revitalization, and economic development. I refer to it as the yeast that raises the dough. It is probably the best leveraged Federal program we have for our cities in the United States of America.

By the way, it is a program that was put in place by Richard Nixon when he was President of the United States.

When we fail to recognize our country's needs, it is at the expense of our seed corn programs that are essential to the future of our country. We must not be pennywise and pound foolish while we consider this budget. While cuts and reforms need to be made, it should not be made at the expense of programs that our country relies on, such as these.

It is too bad that we don't have to balance our budget. That would be beautiful. The thing that drives me crazy about this place, after being mayor for 10 years and doing 10 budgets, and being Governor and having to do four budgets when we had to balance our budget, is that we are irresponsible when it comes to budgeting.

I recall as Governor, as I mentioned earlier, we had to raise taxes at the margin to balance the budget and respond to critical needs of Ohio. It was through cuts in spending and making very difficult choices that we balanced the budget and accumulated over $1 billion in our rainy day fund. It was through these efforts--in other words, we tried to do everything, and at the end, through what I call the strong- management, good-economy bonus, we reduced our State income tax 3 years in a row, including almost 10 percent in 1998.

It is difficult for this Senator to believe that we have the ability to fund the war on terror, respond to homeland security needs, pay for emergencies such as Hurricane Katrina, deal with explosions in entitlement costs, guarantee our country will have the infrastructure of competitiveness to battle the global marketplace, balance budgets, pay down the debt by focusing our attention solely on the discretionary, nondefense, nonhomeland security part of the budget--it doesn't make sense, and it is not fair. It is not fair, and I think the American people understand what I am talking about.

The problem is that Congress has not told the truth about what we can and cannot afford. We want to have it all but don't want to pay for it. America's families don't live like that, nor should we. I learned this difficult lesson while serving as mayor of Cleveland for 10 years and Governor of Ohio for 8 years. It is time that we in Congress learned that lesson as well.

Yesterday, I sat in the Presiding Officer's chair listening to Chairman Gregg and Senator Conrad debate. I was heartened to hear these two budgeteers agree that we have to take on the debt on a bipartisan basis, and sooner rather than later. I wish to be associated with those sentiments, and I hope both sides of the aisle will promptly realize the dilemma and heed the words of Senators Gregg and Conrad. We can get the job done. We can be responsible, but we have to do it on a bipartisan basis.

When I had my problems when I was Governor of Ohio, I had the strongest leader we ever had, a Democrat, in the House of Representatives. He had been there for 24 years. We named a building after him while he was alive. In fact, I had to genuflect to his statue every day when I went to my office at the State House. He was a very powerful guy. We had problems. I went to him and said: Vern, we have to do something about this. He said: Partner, OK, but you have to give a little, we will have to give a little. We spent 3 weeks and came up with a program to get the job done.

The President recognized this. One of the things I felt very bad about last year is we spent all this time on dealing with Social Security when I knew right from the beginning if it wasn't going to be on a bipartisan basis, it would go nowhere, and it went nowhere. The President wasted a lot of time--I give him credit for pointing out the fact that we had a problem with Social Security, but it had to start out on a bipartisan basis.

I was so delighted, I got up and clapped when the President said: We have to put together a commission of the best and brightest to tackle the problem of entitlements so we can move toward fiscal sanity.

We have to do that. The American people are looking at what we are doing here and they are saying: Put aside your partisan differences; come together for the benefit of our country, for our children, for our grandchildren.

I am concerned about this budget, but I am more concerned about the direction we are going. Our problem is that we are unwilling to pay for things or do without them. Unless we wake up to that fact, we are in very deep trouble.

Mr. President, I ask unanimous consent that there now be a period for the transaction of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. President, as in executive session, I ask unanimous consent that Executive Calendar No. 428 be recommitted to the Commerce Committee.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9 a.m., Wednesday, March 15. I further ask that following the prayer and pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved, and the Senate resume consideration of S. Con. Res. 83, the budget resolution, as under the previous order.

Mr. President, tomorrow morning we will continue to debate amendments to the budget resolution. In addition to the amendments debated this evening, on Wednesday, we will have an additional series of amendments ready for votes. We will announce the precise timing of the votes in the morning, but it is likely we will have one or two votes starting at 1 p.m.

At 1:40 p.m., the Senate will proceed to the House of Representatives in order to hear an address by the President of Liberia. That address begins at 2 p.m. Therefore, we will recess from 2 to 3 p.m. At 3 p.m., we will likely then begin a lengthy series of votes to dispose of the remaining amendments under the order from earlier this evening.

As a reminder, the majority leader has announced that this week we will need to complete action on the budget, as well as the debt limit. Members can expect full days and late nights.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order.

Madam President, I rise out of concern for our generation and also for the generations of our children and grandchildren and the legacy we leave them.

It has been said that the real test for a moral society is the kind of world it leaves to its children. With that in mind, I speak about the reconciliation tax bill before the Senate.

First, I comment on the larger context of what I and others see as a great threat to our future way of life. Comptroller General David Walker has said that the greatest threat to our future is our fiscal irresponsibility.

He also says:

America suffers from a serious case of myopia or

nearsightedness both in the public sector and the private

sector. We need to start focusing more on the future, we need

to recognize the reality that we are on an imprudent and

unsustainable fiscal path and we need to get started now.

In November of last year, Alan Greenspan testified before the Joint Economic Committee and told Congress:

We should not be cutting taxes by borrowing. We do not have

the capability of having both productive tax cuts and large

expenditure increases, and presume that the deficit doesn't

matter.

I, for one, am taking this warning very seriously, and I have since I have been a Member of the Senate. I strongly believe deficits do matter. I do not know how anyone can say with a straight face that when we voted to cut spending in December to help achieve deficit reductions, we can now turn around a short while later to provide tax cuts that exceed or cancel out the reduction in spending. I voted to cut spending in the reconciliation bill, but I voted against the tax cuts that were part of the reconciliation effort. In my opinion, it is the only responsible course of action.

There are three reasons we should oppose tax cuts at this time. It is simple. First of all, we cannot afford those tax cuts; two, we do not need these tax cuts; three, we should be working on tax reform rather than tax cuts.

Let's look at some of the looming problems or liabilities that our Federal Government will have to face in the near future. There is the often quoted but perhaps not recognized statistic that 77 million baby boomers, about whom the President talked last night--he is one of them; so is Bill Clinton--will begin to retire in just a couple of years, and they will be a tremendous drain on our entitlement programs. It has been called a demographic tsunami that will never go away.

By 2030, the Congressional Budget Office projects Social Security spending as a share of the U.S. economy will rise by 40 percent. The bottom line is the predictions are that by 2030 almost the entire budget will be used for Social Security, Medicare, and Medicaid, and we will not have anything left for anything else.

At the size of the Federal budget today, according to the Congressional Budget Office, the prescription drug benefit will cost $155 billion a year by 2016, and taken together with Medicare and Medicaid will cost us $1.3 trillion or about one-third of Federal spending.

On top of this, we must consider the pension liabilities taxpayers may soon take on. The Pension Guaranty Corporation has assumed 1.3 million pensions, which adds up to about $23 billion more in obligations than its premiums can cover. That shortfall could grow to more than $100 billion in the near future, considering that about 1,100 companies are at high risk of defaulting on their plans. All that may be added to the Government's bill to pay. We are going to have to pick up the tab on that if this happens.

The war on terror has cost us over $350 billion since it began. This just happens to be the size of the tax cut we enacted in 2003. I took a lot of heat for holding the line on that $350 billion, but the costs of the war were not clear at that time. Consider where we would be today had we not limited the scope of the tax cuts. Where would we be in terms of our budgets being in balance and our national debt? I voted for funding for the war on terror because it is the Federal Government's primary duty to provide national security. However, considering these large increases in spending, it certainly does not make sense to give away large tax cuts.

The Congressional Budget Office projects that Defense spending will rise from $420 billion in 2006 to $461 billion in 2011. This is excluding supplemental appropriations. And, of course, we must look at the Federal spending for Hurricane Katrina. While not as expensive as originally thought, relief spending will amount to about $101.5 billion--the total cost of the supplemental appropriations, targeted tax relief, and other Katrina-related bills we have passed.

Now add to that we are already operating in a deficit. In case anyone has forgotten, the deficit for fiscal year 2005 was $319 billion. In October of last year, the gross Federal debt climbed past $8 trillion. The debt has grown from $5.5 trillion, when I first came

into office, to a staggering $8.1 trillion. The debt service alone threatens to gobble up revenues in the near future. According to CBO, in fiscal year 2005, interest on the public debt grew more rapidly than any other major spending category, rising 14 percent above the fiscal year 2004 level.

Let's face it, we have been lucky. Interest rates have been very low so our interest costs to the debt have been relatively modest. But as we move up the chain and interest rates start to rise, they are going to take a much larger share of our expenditures.

Without major spending cuts, tax increases, or both, the national debt will grow by more than $3 trillion through 2010, to $11.2 trillion, according to the General Accounting Office. In other words, it is going to grow more than $3 trillion through 2010. According to the General Accounting Office, that will be nearly $38,000 for every man, woman, and child. The interest alone would cost $561 billion in 2010, the same as the budget of the Pentagon. In other words, the interest costs in 2010 are going to be the same cost as to entirely fund our Defense budget.

However, we all know the real problem is our long-term debt. By the General Accounting Office's own estimates, about 35 years from now, when my grandchildren have their own children to care for, balancing the budget could require actions as large as cutting total Federal spending by 60 percent. We had a tough time with our modest reduction in terms of cutting expenses 1 percent. We went through all kinds of furor around here.

By passing these tax cuts into law, I believe we are increasing the deficit and thus the Nation's debt, which results in a future tax on our Nation's children. I believe it is immoral to bequeath trillions of dollars in debt to our children and grandchildren. This will not be politically easy, and I understand that. But the simple, undeniable fact is we cannot have it all. We have to make hard choices. We have to decide we cannot say to them: You pay for things we wanted and were not willing to pay for. We should either pay for them or be doing without them.

I learned this lesson while I was mayor of Cleveland for 10 years and as Governor of Ohio for 8. You have to balance budgets. You have to deal with deficits.

In the words of Robert J. Samuelson in a Newsweek article called ``Capitalism vs. Democracy'':

So it is that budget deficits persist; any combination of

spending cuts and tax increases arouses a coalition of the

angry. And so it is that--despite a gradual aging of the

population that will require huge and, probably, damaging tax

increases--no one has seriously attempted to contain these

costs. It is easier to pretend that there will be no ill

effects.

It is time to recognize a simple fact, and that is this: Tax cuts do not pay for themselves. We have heard all of this about: Did the tax cuts generate more revenues than what we had expended? The red bars on this chart show the revenue projected before we cut taxes in 2003. In other words, these are the revenues we expected to get if we had not cut taxes. The blue bars show the revenue projected after we cut taxes. The green bars show the revenue actually collected. The green bar shows the most important thing.

The blue bar shows what we thought we were going to get, and we did get more revenue than we expected in 2003. We expected this, as shown by the blue bar, in 2004, and we got the green. We expected what is shown with the blue bar, as projected, and we were able to get added revenue, as shown by the green bar. The revenue came up, but there is a big debate.

Particularly, we were talking about that yesterday in a meeting, about what caused the increase in revenues. Some were arguing it was because of reducing the tax on dividends and lowering the capital gains tax. I asked the question: Did the lowering of interest rates have anything to do with the fact that we had added revenues? We talk about the stock market. Did the fact interest rates were down impact on the fact that the stock market has gone up?

So there are a lot of things that come into play. I am sorry, but so many of my colleagues say these two tax reductions made the difference for America and fail to realize there were a lot of other things that were happening in our economy. The 2003 tax cuts, yes, were not as expensive as we feared, but the fact is, they still did not pay for themselves in terms of what we projected the revenues to be if we did not have the tax cuts.

The Government Accountability Office and the Congressional Budget Office have both stated we cannot simply grow our way out of the problem. The Congressional Budget Office said last year:

[E]conomic growth alone is unlikely to bring the nation's

long-term fiscal position into balance.

What I am saying is we have to make some tough choices around here. I voted for tax cuts in 2001, 2002, and 2003 because the country needed stimulative medicine. It has worked. The economy has grown. But like any other medicine, an overdose of tax cuts can, and in my opinion will, do more harm than the original disease.

In 2003, I said that $350 billion in tax cuts would be enough to get the economy moving, and it worked. Now I am saying that any more would be an overdose. It is time to put the tax cut medicine back on the shelf, particularly in light of the war in Iraq, our spending on homeland security, Hurricanes Katrina and Rita, and all the other mandatory spending I have mentioned earlier.

The second reason to put the tax cut medicine back on the shelf is that many important tax extensions do not have to happen today. They do not. For instance, the reduced rates on dividends and capital gains do not expire until 2008. As a matter of fact, we could wait until 2009 to deal with it in terms of the 2008 tax year. That is 3 years from now. If we wait to look at these extensions, perhaps it would give us a chance to find offsets to pay for them or even look further at something that is long overdue, tax reform. I am going to discuss that in a moment.

When Alan Greenspan testified before the Joint Economic Committee at the end of last year, a member of the committee asked if he supported extending the current 15-percent tax rate for capital gains and dividends. Former Chairman Greenspan replied he could only support extending these tax cuts if they were paid for. According to Chairman Greenspan, large budget deficits will drive up interest rates over time, raising the Government's debt-service costs, which I referred to 5 minutes ago; that is, interest costs go up, and we end up paying a large portion of our budget on interest costs. Chairman Greenspan said: unless the situation is reversed, at some point these budget trends will cause serious economic disruptions.

The fact is if these taxes are so important, we should pay for them, which is why I supported the pay-go amendment to the budget resolution in March and supported it again in November. We have pay-go that says if you want to spend more, you have to find some way to pay for it. We should do the same thing with tax cuts. No, we decided not to do that.

I also supported the Deficit Reduction Act when it passed the Senate in December because I believe controlling the growth of entitlement spending is essential to dealing with our fiscal challenges. The Deficit Reduction Act has been presented as an important step toward putting our fiscal house in order.

However, adjusting the balances on the pay-go scorecard to reflect the passage of the reconciliation bill would give credence to the criticism that we voted to restrain entitlement spending to allow for larger tax cuts, not to reduce the deficit. In other words, you guys cut your expenses so you could pay for your tax reductions, and you did nothing for the deficit.

Furthermore, even though the budget resolution adopted last April allowed for legislation increasing the deficit by $75.6 billion, the fiscal and political environment is very different now than it was when the budget resolution was adopted. As I mentioned before, the costs of responding to Hurricane Katrina have had a substantial impact on the budget deficit. Katrina hit the United States on August 29, well after we passed the budget resolution. We had no idea this was coming. This was the worst natural disaster we have had, and we have to say: Well, we will take care of it. We will find some way to fudge it and pay for it. But we know fudging it means our budget for 2006 is going to be more unbalanced and we are going to add to the national debt.

The Office of Management and Budget recently announced that the deficit will exceed $400 billion once again in fiscal year 2006, $60 billion higher than projected last summer.

Another important step toward fiscal responsibility is to have honest accounting for the Social Security surplus. We have borrowed over $1.9 trillion from Social Security to finance the rest of the Government. I want to make this point clear. When I first came to the Senate, we were talking about ``unified budget'' and ``on budget.'' All of a sudden, we are now back to the unified budget. In those days, we were saying: We cannot spend the Social Security surplus. Now we do not even talk about the Social Security surplus. The real number is masked by borrowing from the trust funds of other programs. When you add the off-budget surplus of $175 billion from the Social Security trust fund and Postal Service outlays, the real, or on-budget, number is $494 billion. The American people do not understand that. We report $319 billion. The fact is, it cost us almost $500 billion. The Government's accounting for total trust fund surpluses is actually $226 billion. That would increase the total deficit to $545 billion.

In other words, we talk about the Social Security surplus we spent. We do not tell the American people that we are also spending the other money that is in the trust funds. So if you add them all up, we are talking about a deficit of $545 billion, when you include spending the money that is in Social Security and the other trust funds.

It is time to stop the raid on Government trust funds. That is why I have introduced the Truth in Budgeting Act. I am happy Senator Conrad is willing to work with me on this important budget reform. The legislation would stop the Federal Government from using surplus trust fund revenues to hide the true size of the Government's deficit spending and highlight the true size of the Federal debt by forcing the Government to increase borrowing from the public to cover general fund expenses.

I have introduced this bill not as a Social Security reform measure but as a budget reform measure. It is important to have an honest accounting of where we are and where we are headed from a fiscal perspective.

If you look at a study by the Heritage Foundation on Western European economies, you get a glimpse of where we are going. Many older European nations have been forced to impose large tax increases on workers to fund benefit systems mainly for retirees. Overall government spending in the 15 nations comprising the European Union averages 48 percent of GDP, and tax revenues average 41 percent of GDP, which has placed a significant drag on their economies. Compared to the United States, per capita income is 30 percent lower in these countries. Economic growth rates are 34 percent lower than the United States, and unemployment is substantially higher. As their populations continue to age, the economies of countries such as Germany and France risk collapsing under the weight of their unrealistically generous retirement and welfare systems. We can't allow that to happen here.

I am pleased that President Bush, in the State of the Union Address last night, called for a bipartisan commission to examine the full impact of baby boom retirements on Social Security, Medicare, and Medicaid. He said the commission ``should include Members of Congress of both parties and offer bipartisan solutions. We need to put aside partisan politics and work together and get this problem solved.'' I couldn't agree more. We have ignored this issue. It is time that we sit down in a bipartisan basis and face up to this pending disaster and deal with it now before it is too late.

My third reason for opposing tax cuts at this time is that the President's Advisory Panel on Tax Reform released its final report in November of last year. All of us have heard from families and businesses in our States lamenting the complexity and frustration with the current Tax Code. I don't know about the Presiding Officer, but I know my wife and I spend hours getting our papers together, and we have to take them to an accountant. I used to do my tax return. I am a lawyer. I wouldn't touch my tax return today with a 10-foot pole.

I am disappointed that the administration seems to have put tax reform on the back burner. Why extend tax reductions, which we are talking about now, piecemeal when we should be considering fundamental tax reform instead? The goal of any government revenue program should be to raise sufficient funds to operate public programs with the least amount of disruption to the economy. Our tax structure should be simple, fair, and honest. Our current Tax Code achieves none of these objectives.

Last year, the Tax Foundation, a conservative think tank, estimated that Americans spent more than 6 billion hours doing their taxes and that complying with the current Federal income tax code costs U.S. individual businesses and nonprofits $265 billion, which is 22 cents for every dollar of income tax collected. This is equivalent to the combined budgets of the Departments of Education, Homeland Security, Justice, Treasury, Labor, Transportation, Veterans Affairs, Health and Human Services, and NASA.

Individuals and businesses lose money they could otherwise save, invest, spend on their kids' education, or enjoy an extra evening out with the family. But the Federal Government gains nothing from this atrocious tax system we have. It is the equivalent of stacking money in a pile and lighting a match. It doesn't do anything for anybody.

We all recognize the need for a simple, fair, and honest Tax Code. This would be a win-win goal for everyone. We will soon be considering a bill that would cut taxes by about $60 billion. Simply cutting tax compliance costs in half, from 20 percent to 10 percent, would have the impact of a much larger tax cut in the amount of $130 billion. In other words, if we could get a fair, simple, understandable Tax Code and eliminate this enormous amount of money it costs all of us to pay our taxes and reduce that by half, we could save the American people $130 billion. That is real money. This tax cut we are talking about is $60 billion. We are talking about $130 billion out there that we have in our pockets. It doesn't impact the revenues to the Federal Government one iota. However, it would be a tax cut that doesn't reduce our revenue.

We all know that fundamental tax reform is critical. I cannot understand why some of my colleagues want to make so many provisions of the Tax Code permanent or add new tax cuts when we very well may be eliminating precisely the same provisions as part of fundamental tax reform.

The problem we have is this, if you want to be practical: When I got involved in this whole business in 2003 of the $350 billion tax reduction to stimulate the economy, and we started talking with some of the high leadership in the House of Representatives, I was saying to them: When I was Governor, what we did is we looked at tax reductions that stimulate the economy, and then we looked at other areas where we could increase taxes that would have less impact on the economy. We had to be concerned about balancing our budget.

What I heard from the leadership on the other side of the Capitol was: We can't increase taxes because we all took the pledge that we can't increase taxes.

I said: Even if you could increase taxes that don't have that much impact on the economy so that you could decrease taxes that would help stimulate the economy?

No way.

Where are we going? If that is the deal, we will never get anything done around here.

It is my opinion that it is not time for piecemeal tinkering. No homeowner would remodel their kitchen and bathroom a year before tearing down the house to build a newer and better one. We need to tear down the house.

If you look at that Tax Code, consider it to be a Christmas tree. If you look at all the ornaments on that tree, you would sit back and say: Who in the devil ever decorated this tree? They must have been under the influence of alcohol or drugs. That is what it is today. We just keep adding things, one after another, another bell, another whistle, this and that. It is time for us to look at this.

I wish to reiterate the three reasons I think we should oppose these tax cuts at this time.

No. 1, we cannot afford them because of our soaring deficit and the national debt. Putting our spending on the credit cards of our kids is unconscionable, particularly because they are going to have to work harder and smarter to compete in a global marketplace just to maintain our current standard of living. Don't think they are not worried about that. And as a parent, don't think I am not worried about the kind of environment in which my kids are going to live. They are going to have to work very hard in this new competitive world. We better wake up to it. It is the most formidable competition we have ever had in my lifetime; from China, India, you name it. What we are basically saying to our kids is: You are going to go into this competitive society and have to work harder than you have ever had to before. And by the way, down the road, you are going to have to pay for things we weren't willing to do without or pay for. God bless you.

I can't do that. I cannot do that. I don't think any of us can do that.

Second, we don't need tax cuts at this time. If this body believes we must have them, then follow Alan Greenspan and David Walker's advice and let's pay for them.

Third, from a public policy point of view, these tax cuts are premature because in the very near future we may well change them as part of fundamental tax reform and simplification.

I thank my colleagues for their attention and urge them to consider the ramifications of additional tax cuts at this time and reaffirm a principle we have held dear over the years and that I have adhered to as mayor of Cleveland and governor of Ohio. That is to balance budgets and reduce deficits and, yes, when the circumstances warrant it, cut taxes, as I did the last 3 years as governor of Ohio.

I yield the floor.

Mr. President, I rise today to urge my colleagues to vote to confirm Judge Samuel A. Alito, Jr., as an Associate Justice of the U.S. Supreme Court.

Before I discuss my reasons for supporting Judge Alito, I would like to make a few remarks about the judicial confirmation process. Judge Alito is the second nominee to the Supreme Court since I was elected to the Senate. I have been pleased with how his nomination has been handled by both the White House and the Judiciary Committee.

I wish to compliment Senator Specter and Senator Leahy for the excellent job they have done in handling the confirmation hearings for Judge Alito. The hearings were fair and orderly. These hearings gave the country an important opportunity to see what type of person Judge Alito is: one with a long history of service to his country and with a true love of the law. As was the case with the confirmation hearings for Chief Justice Roberts, the ``advice and consent'' process gave the country a valuable lesson in constitutional law, showing that each branch of Government plays a valuable role in our democracy.

The President has nominated another fine candidate to the Supreme Court. History will look back on the nomination of Judge Alito, combined with President Bush's nomination of Chief Justice Roberts, as one of the most important legacies of the Bush administration.

A Supreme Court nominee must have two qualities. First, a nominee must have an exceptional intellect. Second, a nominee must be committed to the rule of law. I am very pleased to say that based on everything I have seen and heard, Judge Alito has demonstrated both of these qualities.

It is difficult to see how Judge Alito could have more impressive professional credentials. From his academic record to his almost 30 years in government service, including 15 years on the U.S. Court of Appeals for the Third Circuit, Judge Alito has accumulated a remarkable record of achievement.

As my colleagues have previously noted, Judge Alito graduated from Princeton University, was elected to Phi Beta Kappa, and was selected as a Scholar of the Woodrow Wilson School of Public and International Affairs. Judge Alito then attended Yale Law School where he served as an editor of the Yale Law Journal.

Since his start as a young lawyer, Judge Alito has shown a commitment to public service in the Jeffersonian ideal of the citizen-lawyer. Judge Alito served as a law clerk to Judge Leonard Garth of the U.S. Court of Appeals for the Third Circuit. After completing his clerkship, Judge Alito began his legal career as an Assistant U.S. Attorney briefing and arguing cases before the Third Circuit. I hope that Judge Alito's commitment to public service is noted by law students and young lawyers around the country as they think about their career choices. Judge Alito's experience stands as a model of public service and has led him to the opportunity to obtain one of the highest honors a lawyer can hope to achieve, a chance to serve his country as an Associate Justice of the U.S. Supreme Court.

In 1987, Judge Alito was nominated and approved by unanimous consent as the U.S. attorney for the District of New Jersey. As U.S. attorney, Judge Alito prosecuted a wide variety of cases, including those involving white collar and environmental crimes, drug trafficking, organized crime, and violations of civil rights. Judge Alito's extensive experience as a Federal prosecutor will add a unique perspective to the Court's decisionmaking process.

In 1990, Judge Alito was unanimously confirmed by the Senate to serve on the U.S. Court of Appeals for the Third Circuit. Throughout his 15 years as a judge on the Third Circuit, Judge Alito has developed a reputation as a methodical, gracious, even-tempered jurist with a history of fairness for all who appear before him. Judge Alito is also known for producing well-written and well-reasoned opinions. His 15 years on the Third Circuit give Judge Alito a unique and seasoned perspective on, and appreciation for, the courts.

His impressive educational and professional background makes Judge Alito well prepared to be an Associate Justice of the Supreme Court. As he displayed during his confirmation hearings, he has an encyclopedic knowledge of the Supreme Court and of constitutional law. Yet he also has diverse, real-world experience in government and in how law interacts with the actual day-to-day operation of government. Judge Alito has the ideal balance of academic and practical experience.

Given his professional achievements, it is not surprising that the American Bar Association has given Judge Alito its highest rating. Mr. Stephen L. Tober, the chairman of the American Bar Association's Standing Committee on the Federal Judiciary, noted in his statement, the ABA unanimously concluded that Judge Alito is ``well qualified'' to serve as Associate Justice on the U.S. Supreme Court. The ABA noted that ``[Judge Alito's] integrity,

professional competence, and judicial temperament are indeed found to be of the highest standing. Judge Alito is an individual who, we believe, sees majesty in the law, respects it, and remains a dedicated student of it to this day.''

Judge Alito has shown a commitment to the rule of law. Now, no two people will agree on how to interpret every provision of the Constitution or of every statute. Nevertheless, Judge Alito's statement that ``there is nothing that is more important for our republic than the rule of law'' is an important testament to his commitment to ensuring that the rule of law, and not individual preferences of Justices, remains supreme. It is essential that any nominee displays a conscious commitment to deciding cases based on the law, rather than on his or her own personal views.

During Judge Alito's confirmation hearings, I was struck by how dedicated he is to the law and to correctly applying the law as a judge. As Judge Alito noted, ``The judiciary has to protect rights, and it should be vigorous in doing that, and it should be vigorous in enforcing the law and in interpreting the law . . . in accordance with what it really means and enforcing the law even if that's unpopular.'' He went on to state, ``A judge can't have any agenda. A judge can't have any preferred outcome in any particular case. And a judge certainly doesn't have a client. The judge's only obligation--and it's a solemn obligation--is to the rule of law, and what that means is that in every single case, the judge has to do what the law requires.''

I observed Judge Alito's demeanor and conduct during this confirmation process, as he refused to abandon his judicial independence for the sake of political expediency. As Judge Alito noted, ``We shouldn't decide those questions, even in our own minds, without going through the whole process. If we announce--if a judge or a judicial nominee announced before even reading the briefs or getting the case or hearing the argument what he or she thought about the ultimate legal issue, all of that would be rendered meaningless, and people would lose all their respect for the judicial system, and with justification, because that is not the way in which members of the judiciary are supposed to go about the work of deciding cases.''

Accordingly, I have every confidence that parties who appear before Judge Alito will encounter a judge who is committed to viewing each case without bias and to reaching a decision that is dictated by the rule of law alone.

Finally, I want to offer some personal observations about Judge Alito. Too often we view executive and judicial nominees through political or ideological glasses and not as human beings. Nominees quickly get labeled as being a ``Republican nominee'' or a ``Democratic Nominee'' or as belonging to a particular school of thought or being a follower of a particular thinker or politician. This is unfortunate as each nominee's character gets overlooked and we fail to see this important aspect of each nominee. It is, however, a nominee's character that can have the biggest impact on his or her work.

In Judge Alito, I believe the Senate has before it not only a nominee who has the capability to be a great Associate Justice but also a nominee who is simply a wonderful person.

I share Judge Alito's appreciation of the great and wonderful opportunities for all Americans. I was moved by Judge Alito's sentiments about his father, as he recalled how a ``small good deed'' from a local Trenton area person allowed his father the chance to attend college and how this act of kindness eventually led to Judge Alito's presence before the U.S. Senate. I can relate to the story of Judge Alito's father because my own father was strongly influenced by his high school principal and a history teacher to stay in school rather than take a laborer's job. With the strong encouragement from these two individuals, my father completed high school and attended Carnegie Tech on a Kroger's Scholarship. Such stories are familiar to many descendants of immigrants and they show that the American Dream is still alive and well.

During my meeting with Judge Alito, he displayed a gracious manner and humble attitude. He is clearly very smart and engaging, and it was a pleasure to hear him explain his view of the Supreme Court and the rule of law. But he is also a very openminded person who listens to others with sincerity and a willingness to hear their views. For such a brilliant and successful person, I did not detect a hint of arrogance. He is a dedicated family man with a good sense of humor whom I believe all Americans will be able to respect and admire.

I have also been pleased to hear that my impressions of Judge Alito have been echoed by so many others during the hearings. I point particularly to the testimony of Professor Nora Demleitner, a self- professed ``left-leaning Democrat,'' who served as a law clerk with Judge Alito after graduating from Yale Law School. Professor Demleitner described Judge Alito as ``a man of great integrity, decency and character.'' Professor Demleitner also noted that Judge Alito is one of her role models and that he has one of the most brilliant legal minds of our generation.

In short, Judge Alito displays the openmindedness, humility and commitment to serving the public interest that should serve as the paradigm of judicial temperament for members of our highest Court.

In reviewing Judge Alito's academic and professional record, his firm commitment to the rule of law, and his strong character, it is clear that Judge Alito is eminently qualified to serve on the Supreme Court. It would be truly unfortunate if we allow this nomination to fall victim to the partisanship that has been growing in the Senate.

I, therefore, urge my colleagues to support the nomination of Judge Alito to be the next Associate Justice of the Supreme Court.

Mr. President, today I rise to introduce legislation to reauthorize the District of Columbia Tuition Assistance Grant (D.C. TAG) program for five additional years. This program has had a tremendously beneficial impact on promoting higher education for high school graduates in our Nation's capital.

The aim of this program is to assist District students, who do not have access to state-supported education systems, in attending college. D.C. TAG scholarships are used by District residents to pay the difference between in-State and out-of-State tuition at State universities nationwide, up to $10,000 per student per school year, with a cumulative cap of $50,000 per student. In addition, since March 2002, District students attending private institutions in Maryland and Virginia, as well as Historically Black Colleges and Universities nationwide, started receiving tuition grants under the program of $2,500 per student per school year, with a cumulative cap of $12,500 per student.

Since the first grants were awarded in 2000, the program has dispersed over $98 million to 8,454 District students; many are the first in their family to attend college. Moreover, District high school graduating seniors have seen a 28 percent increase in college attendance. Seventy five percent of District students said that D.C. TAG made a difference in their decision to continue their education beyond high school. Sixty five percent of District students have indicated that D.C. TAG has enabled them to choose a college that best suits their educational needs.

Because of the great success and positive impact of this program, I propose to expand the program to private schools nationwide, thereby creating greater equity between all private colleges, while establishing a cap on program funding at the current appropriation of $33.2 million annually. In addition, this legislation will require the Mayor of the District of Columbia to submit an annual report to Congress on the program's status.

As Chairman of the District of Columbia authorizing subcommittee, leveling the playing field for high school graduates in the District and enhancing their educational opportunities continues to be a top priority. I urge all of my colleagues to support this legislation.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I rise to introduce legislation to reauthorize the District of Columbia Tuition Assistance Grant (D.C. TAG) program for five additional years. This program has had a tremendously beneficial impact on promoting higher education for high school graduates in our Nation's capital.

The aim of this program is to assist District students, who do not have access to state-supported education systems, in attending college. D.C. TAG scholarships are used by District residents to pay the difference between in-State and out-of-State tuition at State universities nationwide, up to $10,000 per student per school year, with a cumulative cap of $50,000 per student. In addition, since March 2002, District students attending private institutions in Maryland and Virginia, as well as Historically Black Colleges and Universities nationwide, started receiving tuition grants under the program of $2,500 per student per school year, with a cumulative cap of $12,500 per student.

Since the first grants were awarded in 2000, the program has dispersed over $98 million to 8,454 District students; many are the first in their family to attend college. Moreover, District high school graduating seniors have seen a 28 percent increase in college attendance. Seventy five percent of District students said that D.C. TAG made a difference in their decision to continue their education beyond high school. Sixty five percent of District students have indicated that D.C. TAG has enabled them to choose a college that best suits their educational needs.

Because of the great success and positive impact of this program, I propose to expand the program to private schools nationwide, thereby creating greater equity between all private colleges, while establishing a cap on program funding at the current appropriation of $33.2 million annually. In addition, this legislation will require the Mayor of the District of Columbia to submit an annual report to Congress on the program's status.

As Chairman of the District of Columbia authorizing subcommittee, leveling the playing field for high school graduates in the District and enhancing their educational opportunities continues to be a top priority. I urge all of my colleagues to support this legislation.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, first I would like to say I have a great deal of respect for Senator Coburn. I think he is acting from honorable motives. I would remind Senators that our colleague, Senator Frist, is a doctor and is not asking for dispensation from the rule. He continues to practice without compensation on occasion.

I have been hopeful that working in a truly bipartisan manner with the Ethics Committee, which I chair, the Rules Committee, our bipartisan leadership, and Senator Coburn, that we could come to an agreement which would address Senator Coburn's concerns.

While I would like to be able to detail the long history of the Ethics Committee's work to find an accommodation with Senator Coburn to effectively address his concerns, in an effort to maintain the privileged nature of the communications between the committee and the Senator, I must speak only in generalities.

Let me assure my colleagues that we have done everything that the Senate rules will allow us to do to help Senator Coburn in this matter. I can assure you that Senator Johnson and I have spent a great deal of time, and the staff of the Ethics Committee as well, trying to accommodate Senator Coburn. Ultimately, we found ourselves in a situation where we were asked to reinterpret what the Senate rules meant or to endorse a change of those rules for Senator Coburn. As I will soon detail, the specific language and legislative history of Senate Rules XXXVI and XXXVII and Federal law prevent us from reinterpreting the rules. With regard to changing the rules themselves, we did not believe the Ethics Committee should be involved in the sole jurisdiction of the Rules Committee.

As my colleagues know, the Rules Committee establishes the rules of the Senate. The Ethics Committee is charged with enforcing those rules. This matter should not be on the Senate floor. It should be before the Rules Committee of the Senate.

Despite these realities and all the work to accommodate Senator Coburn over the past year, here we are considering a sense-of-the- Senate resolution to clarify Senate Rule XXXVII in an effort to put pressure on the Senate Ethics Committee to reinterpret what ``compensation'' means. Unfortunately, this resolution has not been approved or considered by the Rules Committee. There have been no hearings on this matter in the Rules Committee. Nevertheless, here we are.

First, allow me to lay out the Senate rules which guided the Ethics Committee's determination on the Coburn matter.

Senate Rule XXXVII prohibits Senators from, No. 1, affiliating with a firm, partnership, association, or corporation for the purpose of providing professional services for compensation; 2, permitting his or her name to be used by a firm, partnership, association, or corporation which provides professional services for compensation; and 3, practicing a profession for compensation to any extent during regular office hours of the employing Senate office.

The Senate Ethics Manual, the meat the committee provides the Senate for the bones of the Senate's rules, indicates on page 71 that Rule XXXVII ``prohibits the paid practice of fiduciary professions,'' which includes the medical profession. On page 72, the manual indicates that the rule applies to ``payment for professional services.'' This is important because it goes to the heart of why the committee determined that Senator Coburn's proposal to allow him to receive reimbursement for expense in lieu of compensation should not be approved.

Senator Coburn has publicly stated that the purpose behind his effort today is to allow him to receive reimbursement to cover the medical malpractice costs associated with providing medical care. He believes that in order to maintain his medical skills and licenses and in order to be a ``citizen legislator,'' he should be allowed to receive this compensation.

Again, to be absolutely clear, as chairman of the Ethics Committee, my job is to provide Senators guidance to help them comply with our rules. Our rules clearly state that payment of any kind for any purpose for fiduciary work is prohibited. Rule XXXVII prohibits exactly what Senator Coburn is asking for today.

The Senate looked at this exact specific situation in 1977. Senator Thurmond, with whom a good number of us had the opportunity to serve-- and this is 1977--served as cochair with Senator Gaylord Nelson of the Special Committee on Official Conduct. This committee was charged with developing the original Senate Code of Conduct upon which many of our current Senate ethics rules are based. Senator Thurmond said on the Senate floor in 1977:

If [doctors] value their duties and they want to keep up,

they can visit hospitals and go out and participate, so long

as they do not do it for compensation.

Additionally, the Nelson committee report formed the basis for what is now Rule XXXVI and addresses the possibility of outside earned income. Specifically, the report states:

During its deliberation on this Rule, the Committee was

aware of clear and unmistakable practical facts of political

life. For example, most Americans regard service in the

Senate as a full-time job.

And I can say that was 1977. This is 2005. I can say that I think it is more of a full-time job today than it was back in 1977.

Senators work long hours devoting a substantial amount of

not only their own time, but also time that they could be

with their families, attending to Senate business on behalf

of their constituents.

Consistent with these duties is the notion that since service in the Senate is a full-time job, considerable skepticism is often raised in the minds of the public whenever outside earned income is received by a Senator because of personal services outside regular Senate duties.

Now, this is to be differentiated from other outside income like farming because the personal services or fiduciary relationship is fundamentally different. A Senator engaged in farming is not put in the situation where he or

she would have to choose between tending to their fields or serving a constituent. A doctor, who is in a fiduciary relationship, could face a situation where he had to choose between constituents and providing medical treatment for a patient. Writing a book is not a fiduciary relationship and would not interfere with a Senator's business because he can pick it up and lay it down.

Not only do our own rules and history prevent the arrangement that Senator Coburn is asking for, but Federal law does as well. The Ethics Reform Act of 1989, enshrined as paragraph 5(b) of Rule XXXVII, explicitly prohibits Senators from entering into professional fiduciary relationships. The rule, again based on the Ethics Reform Act, prohibits:

(1) receive compensation for affiliating with or being

employed by a firm, partnership, association, corporation, or

other entity which provides professional services involving a

fiduciary relationship.

(2) permit that Member's, officer's, or employee's name to

be used by any such firm, partnership, association,

corporation, or other entity.

(3) receive compensation for practicing a profession which

involves a fiduciary relationship.

There may be an argument made to the Senate today that the ``compensation'' that Rules XXXVI and XXXVII and Ethics Reform Act refer to is profit. We may hear that the resolution we are considering encourages the Ethics Committee to define compensation as money received for costs or that compensation should only apply to for-profit enterprises or that ``breaking even'' is not compensation. Well, allow me to share some facts for the Senate to consider on what ``compensation'' means.

Section 61 of the Internal Revenue Code finds that gross income includes ``compensation for services including fees, commissions, fringe benefits and similar items.''

The U.S. Court of Claims held in 1968 ``that the statutory definition of gross income is broad enough to include as compensation any economic or financial benefit from any source, conferred in any form on any employee, unless specifically exempted by statute.''

Nowhere in the Internal Revenue Code or in our case law will one find ``compensation'' defined as ``breaking even.''

Let me raise some other facts. The Federal Acquisition Regulation defines compensation as ``all remuneration paid or accrued for services rendered by the employees to the contractor during the period of the contract performance.''

Again, in contracts with the Federal Government, breaking even is not an option.

Finally, allow me to offer one more piece of information for my colleagues to consider when the ``actual and necessary expense'' argument is made on behalf of this resolution. The Code of Federal Regulations, 5 CFR section 2636.303(b), states:

Outside earned income and compensation both mean wages,

salaries, honoraria, commission, professional fees and other

forms of compensation for services other than salary benefits

and allowances paid by the United States Government.

Again, the idea of defining compensation as profit is not considered in our Federal Code.

Finally, allow me to offer some thoughts on what changing the committee's interpretation of rules XXXVI and XXXVII, the Ethics Reform Act, the Internal Revenue Code, findings of the U.S. Court of Claims, and our Federal Code would mean.

Enforcement of this rule change will be impossible. The Ethics Committee would need to hire a small army of auditors and accountants to effectively evaluate what expenses were actual and necessary as the resolution would allow. These accountants would need to have some specific, specialized knowledge in the medical field to evaluate if the expenses Senator Coburn had were ``actual and necessary.'' Frankly, the committee is not equipped to handle this responsibility. Moreover, I do not believe that the committee should be asked to take this on.

The rule change would inevitably lead to violations. I can hardly envision a scenario in which every procedure Dr. Coburn is involved with is billed exactly at the actual and necessary expenses. While Dr. Coburn does have a degree in accounting, I believe that should he be permitted to practice medicine, his focus should be on his patients, not on his accounts receivable. If his rates were to exceed or fall short of his actual or necessary expenses, he would be in violation and subject to an Ethics Committee violation. No one wants that.

The rule change would lead to other calls for changes from our colleagues that are fraught with even more dangers. Why should we not provide the same arrangement to our two colleagues who are veterinarians? Do they not need to continue their practices to maintain their skills and licenses? Is this not their chosen profession and one that they may want to return to eventually? How long will it be before one of the many excellent lawyers amongst us will ask to practice but only receive actual and necessary expenses? If we decide today to allow a colleague to pursue their profession and receive compensation to cover their expenses, how will the committee say no to other requests like this? This is the slippery slope and one that I believe we must carefully avoid.

Again, I am sorry this matter has come to the floor of the Senate. I believe Senator Coburn means well in his efforts today. He wants to continue his services as a doctor to help people. I applaud that altruistic commitment to public service. Rather than debating the possibility of reinterpreting our rules, we should be talking about a real, practical solution that would allow Senator Coburn to continue serving people and to maintain his medical skills and licenses.

The committee has long indicated to Senators that they could provide medical services to patients on a volunteer basis where no compensation is received, as the Senate majority leader does, and we are very familiar with it.

The committee has indicated to Senators, consistent with Senator Thurmond's comments in 1977, that they can pursue a volunteer relationship with a VA hospital in their home States or in Washington at Walter Reed or at the Bethesda Medical Center where no compensation is provided. I understand they have arrangements to cover the malpractice insurance of doctors who operate there, so that malpractice problem would not occur.

Unfortunately, instead of congratulating Senator Coburn for finding a solution that will allow him to continue practicing, we are debating a Senate resolution to instruct the Senate Ethics Committee to ignore Rules XXXVI and XXXVII, the Ethics Reform Act, and definitions of compensation that are in Federal statute. We cannot do that.

With that, I urge my colleagues to reject this effort, and I raise a point of order that the Coburn amendment is not germane to the underlying bill.

Mr. President, I would ask the Chair to remind me of that.

Mr. President, I will clarify again for my colleagues the fact that the Ethics Committee genuinely tried to accommodate the concerns of the Senator from Oklahoma. We, as I say, worked hard to do it. But the fact is, the rule is clear on its face, and we are being asked to reinterpret what the Senate rules mean or to endorse a change in those rules for Senator Coburn.

I think the specific language and legislative history of the rules and the Federal law prevent us from reinterpreting the rules. I believe, as I mentioned when I started my remarks earlier, this matter should not be here being debated on the floor of the Senate but, rather, as Senator Dodd suggested, Senator Coburn should go before the Rules Committee. And if Senator Ensign is unhappy that he cannot practice veterinary medicine, perhaps he should go before the Rules Committee and have a hearing and discuss this matter, and do it according to the procedures of the Senate.

If this were to pass today, I think it would set a very dangerous precedent that would encourage people--rather than going through the process of the rules and procedures we have here in the Senate, it would cause them to come to the floor. I do not think that is good for the institution. I ask my colleagues to not support this resolution.

Mr. President, at this time I raise a point of order that the Coburn amendment is not germane to the underlying bill.

A point of order was made.

Mr. President, I rise to strongly encourage my colleagues in the Senate to support this resolution recognizing the 40th anniversary of the Second Vatican Council's Declaration on the Relation of the Church to Non-Christian Religions, Nostra Aetate, and the continuing need for mutual interreligious respect and dialogue.

October 28, 2005 marked the 40th anniversary of Nostra Aetate, which means ``in our time.'' On October 28, 1965, Nostra Aetate affirmed the respect of the Roman Catholic Church for Hinduism, Buddhism, Islam, and Judaism, and called upon all Catholics to engage in dialogue and cooperation with the followers of other religions. Nostra Aetate states that the Roman Catholic Church, moved by the Gospel's spiritual love, decries hatred, persecution, and displays of anti-Semitism directed at Jews at any time and by anyone. As stated in the resolution, Nostra Aetate marked a new relationship between Catholics and Jews worldwide and opened a chapter in Jewish-Christian relations that is unprecedented in its closeness and warmth.

With Nostra Aetate, Pope John Paul VI called on all Catholics not only to decry the persecution of people of non-Christian religions, but also to love and respect them.

As it is stated in a passage from Nostra Aetate: ``In our time, when day by day mankind is being drawn closer together, and the ties between different peoples are becoming stronger, the Church examines more closely its relationship to non-Christian religions. In her task of promoting unity and love among men, indeed among nations, she considers above all in this declaration what men have in common and what draws them to fellowship. . . . Men expect from the various religions answers to the unsolved riddles of the human condition, which today, even as in former times, deeply stir the hearts of men: What is man? What is the meaning, the aim of our life? What is moral good, what sin? Whence suffering and what purpose does it serve? Which is the road to true happiness? What are death, judgment and retribution after death? What, finally, is that ultimate inexpressible mystery which encompasses our existence: whence do we come, and where are we going?''

Nostra Aetate acknowledges that all people of all religions are united by the fact that we are all searching for the answers to the most basic questions about life and God, and that we must love and respect one another, despite our differences.

The message of Nostra Aetate is of particular importance today, amidst the conflict in the Middle East and terrorism in the name of Islam. As we continue the battle against the rise in anti-Semitism, prejudice against Muslims, and all other forms of intolerance and xenophobia, both internationally and within the United States, we must remember the value of this message that calls for interreligious respect, tolerance, and dialogue and decries all forms of hatred.

Mr. President, I rise to comment on the reconciliation tax relief bill that will most likely come before the Senate next week. I felt it necessary to come and speak on this topic because I am thinking of not only our generation but of the generations of our children and grandchildren and the legacy we leave them.

How do the decisions we make in the Senate today affect their lives after we have long left this body? That is a question I will be asking should the Senate, as I expect it will, begin debate on reconciliation for tax cuts.

Last week, Alan Greenspan testified before the Joint Economic Committee and told Congress:

We should not be cutting taxes by borrowing. We do not have

the capability of having both productive tax cuts and large

expenditure increases, and presume that the deficit doesn't

matter.

I do not know how anyone can say with a straight face that when we voted to cut spending last week to help achieve deficit reductions we can now then turn around 2 weeks later to provide tax cuts that exceed the reductions that we made in spending. It just does not make any sense, and I think it does not make any sense to the American people.

Well, I for one am taking Chairman Greenspan's warning seriously. Last week, I voted to cut spending. And should tax cuts come to the floor next week, I will vote against them. I believe it is the only responsible course of action.

There are three reasons we should oppose tax cuts at this time: No. 1, we cannot afford these tax cuts; No. 2, we do not need these tax cuts; and, No. 3, we should be working on tax reform rather than tax cuts.

In case anyone has forgotten, the deficit for fiscal year 2005 was $317 billion. That was the third largest deficit in our Nation's history. The first and second largest deficits occurred in 2004 and in 2003.

On October 20, the gross Federal debt climbed past $8 trillion. Looking at this chart, you can see what is happening. This is the combined debt, the public and the Government debt. It climbed to over $8 trillion. And according to the Congressional Budget Office, in fiscal year 2005, interest on the public debt grew more rapidly than any other major spending category, rising 14 percent above the fiscal year 2004 level.

So we can see that this debt is escalating rapidly, and it is something about which we should all be very concerned.

Let me put this in perspective. Just the interest payments on the public debt are more than $1,600 for each tax-paying American--more than $1,600 for each tax-paying American. If we could wave a magic wand and stop adding to the deficit today--which we won't--the Federal debt would still be about $28,000 for every person in the United States, and close to $1 million each if it is left to those who are under 20 years of age.

And even if we were to start running surpluses as large as last year's deficit, it would still take us 14 years to pay off just the debt held by the public.

It is time to recognize a simple fact of life. Contrary to what some of my colleagues seem to believe, tax cuts do not pay for themselves.

We have heard about the impact of the previous tax cuts, how in the past few months revenues have exceeded expectations, and how economic growth would pay for all the tax cuts Congress enacted in 2003. But as this chart shows, exceeding expectations does not mean there was no revenue lost as a result of the tax cuts.

As shown on this chart, the red bar indicates what our revenues would have been had we not had the tax cuts. The blue bar shows what the projected revenue was as a result of the tax cuts. The green bar shows what we actually received as a result of the tax cuts. Now, we can see there is a difference between if we had not had the tax cuts and having the tax cuts.

Now, let's go to 2004. Shown in red is what we would have expected in revenues in 2004 had we not had the tax cuts. We had the tax cuts, and shown in blue is what was expected as a result of them. The good news is, we did receive more money than we anticipated from the tax cuts, as shown in the green.

Now, let's go to 2005. Again, the red bar shows what the projection was of what we would have had without the tax cuts. The blue bar shows what the projection was of the revenues we would have because we had the tax cuts. And the green bar shows actually what the revenues were that came in.

The fact is, tax cuts are never free. All during this time, we were adding to the national debt.

Now, I voted for tax cuts in 2001, 2002, and 2003 because the country needed stimulative medicine, and it worked. But like any other medicine, an overdose of tax cuts can, and in my opinion will, do more harm than the original disease.

In 2003, I said that $350 billion in tax cuts would be enough to get the economy moving, and now I am saying that

any more would be an overdose. It is time to put the tax cut medicine back on the shelf, particularly in light of the war in Iraq, our spending on homeland security, and Hurricanes Katrina and Rita.

Just today, the Senate increased mandatory spending over the next 10 years by $9.5 billion.

The second reason to put the tax cut medicine back on the shelf is that most of the provisions included in the reconciliation package do not have to be extended now. In fact, most of the tax cut provisions included in the reconciliation package, including the reduced rates on dividends and capital gains, do not expire until 2008--over 2 years from now.

So here are the provisions of the economic growth plan that we worked on during the last several years. You can see that one of the provisions of the proposal for next week is ``reduced rate on dividends and capital gains.'' This is not going to expire until 2008. Another one is ``section 179 expensing,'' which many of us supported in the bill we passed last year, the JOBS bill. That is not going to expire until 2007.

So the point I am making is, there really is not any need for us to pass these tax cuts next week because most of them are not going to expire until years in the future.

As my colleagues can see, most of the core provisions of the President's tax reform plan, as I mentioned, do not expire until 2010. A handful expire in 2007 or 2008, and only one expires next year.

When Alan Greenspan testified before the Joint Economic Committee last week--I think this is really telling testimony on the part of Chairman Greenspan--a member of the committee asked if he supported extending the 15-percent tax rate for capital gains and dividends. Chairman Greenspan replied that he could only support extending these tax cuts if they were paid for.

According to Chairman Greenspan, large budget deficits will drive up interest rates over time, raising the Government's debt service costs.

I think, as we watch what is happening to interest rates, they are starting to creep up. What we forget is, as they creep up, interest costs are going to take a larger and larger percent of our Federal budget.

I quote Alan Greenspan again:

Unless the situation is reversed, at some point these

budget trends will cause serious economic disruptions.

I will repeat it again. Alan Greenspan:

Unless the situation is reversed, at some point these

budget trends will cause serious economic disruptions.

The fact is, if these tax cuts are so important, we should pay for them, which is why I supported the pay-go amendment to the budget resolution in March, and supported it again last week.

My third reason for opposing piecemeal tax cuts at this time is that the President's Advisory Panel on Tax Reform just released its final report. All of us have heard from families and businesses in our respective States lamenting the complexity and frustration with the current Tax Code.

Well, thanks to our former colleagues, Connie Mack and John Breaux, it seems to me we have a chance to finally do something about it.

Why extend tax deductions piecemeal when we should be considering fundamental tax reform? Our tax structure should be simple, fair, and honest. Our current Tax Code achieves none of these objectives.

I used to prepare my own tax returns and made out tax returns for my clients. I would not touch my tax return today with a 10-foot pole because of the complexities.

I am with the 55 percent of other Americans who have to hire professional help to make out our tax returns. Last year, it is estimated that Americans spent more than 3.5 billion hours doing their taxes, the equivalent of hiring almost 2 million new IRS employees, more than 20 times the agency's current workforce. If the money spent every year on tax preparation and compliance was collected, about $140 billion each year or over $1,000 per family, it could fund a substantial part of the Federal Government, including the Department of Homeland Security, the Department of State, NASA, the Department of Housing and Urban Development, the Environmental Protection Agency, the Department of Transportation, the U.S. Congress, our Federal courts, and all the Federal Government's foreign aid.

Individuals, businesses, and nonprofits must pay these compliance costs, but the Federal Government cannot use them for any useful purpose. Individuals and businesses lose money that they could otherwise save, invest, and spend on their children's education, buy a home, or simply enjoy an extra evening out with the family. But the Federal Government gets nothing. That is the equivalent of stacking money in a pile and lighting a match to it.

We all recognize the need for a simple, fair, and honest Tax Code. This is a win-win goal for everyone. Simply cutting tax compliance costs in half from 20 percent to 10 percent would have the same impact as a major tax cut. Just cutting the compliance costs would be the equivalent of a major tax cut for most Americans, but it would be a tax cut that does not reduce Federal revenues but would guarantee that people are paying their fair share and bring more money into the Federal Treasury.

We all know that fundamental tax reform is critical and that President Bush will be sending us his recommendations in February. I simply cannot understand why some of my colleagues want to make so many provisions of the current Tax Code permanent or add new tax cuts, when next year we very well may be eliminating the same provisions as part of fundamental tax reform. Why do it now when we are expecting the President to come back with a fair and simple, honest tax reform package? Again, this is not the time for piecemeal tinkering. No homeowner would remodel their kitchen and bathroom the year before tearing down the house to build a newer and better one. That is, in effect, what we would be doing next week if we vote for these cuts.

In closing, I reiterate the three reasons we should oppose tax cuts at this time. No. 1, we cannot afford them because of our soaring deficit and national debt. Putting our spending on the credit card of our kids is unconscionable, particularly because they will have to work harder and smarter to compete in the global marketplace to maintain our current standard of living and quality of life.

Two, we do not need these tax cuts at this time. If this body believes we must have them, we should follow Alan Greenspan's advice and pay for them. If these tax cuts are so important to the economy, then let's pay for them.

And third, from a public policy point of view, these tax cuts are premature because in the very near future, we may well change them as part of fundamental tax reform and simplification.

I thank my colleagues for their attention and urge them to vote against the tax cuts proposed next week. I reaffirm a Republican principle we have held dear over the years and one that I adhered to as mayor of the city of Cleveland and Governor of Ohio; that is, balance budgets and reduce deficits.

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

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 261, H.R. 797.

Mr. President, I ask unanimous consent that the amendment at the desk be agreed to, the bill, as amended, be read a third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

Mr. President, I ask unanimous consent that the Chair now lay before the Senate the House message to accompany the bill (S. 1713) to make amendments to the Iran Nonproliferation Act of 2000 related to International Space Station payments.

The PRESIDING OFFICER laid before the Senate the following message from the House of Representatives:

I ask unanimous consent that the Senate concur in the House amendments, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.