Floor Statements

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to call up amendment No. 1025 to the pending bill, and I ask that amendment be made pending.

Mr. President, if I might speak to the amendment for a few moments.

I offered a similar amendment last week to the fraud recovery bill and was told at the time--and, of course, cloture ultimately was invoked on that bill, and I was told it was not germane. So it fell postcloture.

In order to make it germane to this underlying bill--in fact, I was told at the time last week, when I brought it up, it would be germane to the housing bill, which would be considered next. So I decided I would offer this amendment again. But running into the same sort of question about whether this amendment would be germane postcloture, I have adapted the amendment so it is germane to the underlying bill.

I will tell you, I would have preferred keeping it in its original form because, essentially, it would have taken TARP moneys repaid to the Federal Treasury by lending institutions and applied them to debt reduction. That was the amendment in the form it was in last week when I offered it to the fraud recovery bill. I still think that is a good, sound idea: As TARP funds are paid back into the Federal Treasury, rather than being recycled or used on some other Government program, we apply it to debt reduction.

Lord knows we are spending and borrowing enormous amounts of money. The least we could do when these moneys are paid back is put them toward paying down the Federal debt so we are not handing this enormous--enormous--bill to our children and grandchildren.

But, as I said before, in order to get this amendment in a form that it would be germane postcloture, I have revised it. I will describe it in a minute. But I wish to start by saying, on October 7, 2008, we all know Congress passed the Troubled Asset Relief Program, or TARP, as part of the Emergency Economic Stabilization Act. It authorized $700 billion for the purchase of toxic assets from banks, with a goal of restoring liquidity to the financial sector and restarting the flow of credit in our markets.

The Department of Treasury, however, without consultation with Congress, changed the purpose of TARP and began injecting capital into financial institutions through a program called the Capital Purchase Program, or CPP, rather than purchasing toxic assets.

Financial lending was not increased with the implementation of the CPP and the expenditure of $218 billion of TARP funds, despite the goal of the program.

Those receiving funds through CPP are now faced with additional restrictions related to accepting those funds. A number of community banks and large financial institutions have expressed their desire to return those CPP funds to the Department of Treasury. Treasury has, in fact, begun the process of accepting receipt of these funds. However, because of the financial stress test Treasury is currently conducting, it is possible Treasury will restrict some banks from returning funds they received from the CPP.

I mentioned last week when I offered the amendment to the fraud recovery bill that there were banks I was aware of that were not able at the time to return funds to the Treasury. They were told they couldn't. They had money from the TARP, they were banks that were in good financial standing, and they wanted to pay back that TARP money and couldn't do it. I believe now, at least, the Treasury is working with a number of banks to try and receive some of these monies that the banks want to pay back, but it is entirely possible, because of these stress tests, that some banks will be restricted from returning funds they received from the CPP.

In his testimony before the TARP congressional oversight panel on April 21, 2009, Secretary Geithner stated that Treasury estimates $134.6 billion of TARP funds are still available. What is interesting about that number is that in that figure, he includes $25 billion they expect to receive back from banks under CPP. Geithner also stated he believes that $25 billion is a conservative number and that private analysts, of course, are predicting that more--much more--is going to be returned. But the important point is that of the $134.6 billion that Treasury Secretary Geithner referred to in terms of TARP funds that will be available, $25 billion of that is in the form of payments they expect to receive back from banks under the CPP.

So my point is there is money coming in, and rather than using that to pay down the debt, which I think many of us assumed was going to be the use of those funds if they came back in, that they are sort of planning on, it looks like, recycling back into TARP or, perhaps--I hope not but perhaps--using them for some other purpose.

Section 120 of the Emergency Economic Stabilization Act terminates the authority for TARP funds on December 31, 2009, and the Secretary can request an extension to that deadline not later than 2 years after enactment, which would be October of 2010. But keep in

mind, that restriction only applies to Treasury's issuance of new loans and does not cover the reuse of previously issued assistance that was returned to the Treasury. So there is no prohibition on the Treasury using these recycled TARP funds.

The TARP Reduction Priority Act, which is the subject of my amendment, reduces TARP authority by any amount returned by a financial institution to Treasury. So instead of having TARP monies that are returned from the banks back into the Treasury applied to debt reduction, what I do now with this amendment--in order to have it fit within the confines of this bill and to remain germane should, in fact, cloture be invoked--is reduce the TARP authority by whatever amount is returned by a financial institution to the Treasury. In other words, the TARP amount--the amount that would be available for lending under TARP--as it is paid back, monies come back from the banks, the TARP lending amount is reduced commensurate with the amount that is returned, so that those monies cannot be recycled. Once they have been out there and returned by the banks, they can't be recycled and reused or put to some other purpose.

Let me also say that until the December 31, 2009 expiration date, and possibly longer--again, if the Secretary is granted an extension--that without this legislation, Treasury can continue to use TARP funds, including those repaid in any manner they see fit. It is certainly not what Members of Congress envisioned when this legislation passed last year. These are taxpayer dollars. They should not become a discretionary slush fund for the administration. Under the Constitution, Congress controls the power of the purse, and I, as do many Members of Congress and others around the country, have major concerns regarding the Treasury's handling of TARP funding. If the new administration, the Obama administration, or the Treasury Department believes it needs additional funding to address problems in the financial sector, they should come to Congress for that authority.

Inspector General Neil Barofsky stated in his quarterly report to Congress that there are 12 separate programs being funded under TARP involving up to $3 trillion of government and public funds. Amazingly, that is the equivalent amount of the size of the entire Federal budget. It certainly wasn't what Congress was told the funding would be used for.

Mr. Barofsky also mentioned in his April 4, 2009 CBO report--he estimated that TARP would cost the Federal Government $356 billion, meaning that the Treasury will only be able to recover $344 billion or approximately 49 percent of the $700 billion that was originally allocated by the Congress.

When this program was initially pitched to Congress--and my colleagues in the Senate should remember--Secretary Paulson at the time argued that the Government would end up making money once those toxic assets were sold after the economy recovered. Clearly, this is no longer the case. Barofsky's report spans 247 pages. It says the very character of the bailout program makes it:

Inherently vulnerable to fraud, waste, and abuse, including

significant issues related to conflicts of interfacing fund

managers, inclusion between participants, and vulnerabilities

to money laundering.

So again, the point of the amendment is very simple; it is very straightforward. All I am trying to do is to make sure the TARP funds, as they come back in, when they are repaid by banks, are not recycled, they are not reused, they are not put into some program which the inspector general says in his report is inherently vulnerable to fraud, waste, and abuse; that it actually be used to reduce the amount of the TARP authority. It is the best solution we could come up with short of applying those repaid funds to deficit or to debt reduction which, as I said, was the original form of this amendment, but under the rules of the Senate, to make sure it is germane, this is the approach we have selected. I think it accomplishes the same purpose. It makes certain that the monies that come back in, that are paid back by banks that have received TARP funds are not reused, reallocated, put into some other purpose or some other fund, but it actually is reducing the amount of TARP authority that is available to be used and, therefore, protecting taxpayer interests and taxpayer dollars that were extended under this program in the first place.

So I hope my colleagues, when they are making final determinations about which amendments are going to be on the so-called list--and it seems to me, at least, that on a bill such as this, a housing bill, it ought to be wide open to amendments and we ought to be able to get votes on some of these amendments but evidently the leaders on the other side have concluded they are going to limit those amendments and try to come up with some finite list--I hope they will include this amendment on that list. I think it makes sense. It is perfectly fitting with the purpose of the underlying bill, which is a housing bill.

TARP funds, of course, were supposed to deal with the credit crisis, the housing crisis, and I would hope this amendment would be one that the other side, as they make those decisions about which amendments are going to be allowed to be debated and voted on with respect to the base bill, that this amendment will be on that list. I think it makes a lot of sense.

I hope some of the other amendments my colleagues have offered also will be allowed to be voted on. I think that is the way the Senate is intended to work and to function. All Members of the Senate are supposed to be able to come to the floor and offer amendments and have those amendments debated and voted upon. It seems to me that sort of arbitrarily putting in place a construct that limits amendments and picks and chooses ones that get voted on does not represent the heritage and the tradition of this body. I hope my colleagues who are managing the bill on the floor will decide what I think is in the best interests of this institution, and that is that these amendments all be offered, be debated, and be voted on, and I hope this certainly is the case with the amendment I put before the Senate right now.

With that, I yield back the balance of my time and I hope this amendment can be made pending and get voted on whenever we get back on the underlying bill.

Madam President, I would like to pick up where my colleague from South Carolina left off and talk a little bit about the need to have a budget agreement that reflects the will of the American people, to have Republicans and Democrats both engaged, involved in that, not only in Washington in the Senate but Republicans and Democrats around the country. What we saw in this budget was a certain number of amendments that were accepted on the floor of the Senate, Republican amendments, all of which were stripped out in the conference committee with the House--which many of us predicted. But there were lots of good amendments that addressed key, core issues.

We had amendments that addressed the issue of climate change, which the door is left open to in this budget. We had amendments that addressed issues such as the deduction for charitable giving, which was an amendment I offered on the Senate floor. It was adopted by a vote of 94 to 3. That was struck in the conference.

We had amendments that were offered that were designed to protect those with incomes less than $250,000 a year from having tax increases in the budget. That was an Ensign amendment. That was stripped out. So any Republican input or involvement in this budget process was nullified by the work of the conference committee, the Democrats who led the conference between the House and the Senate. So we are left with a budget that has been sanitized of any of those protections against higher costs for energy, against higher taxes, and a whole range of other things--protection against losing the deduction that is available to people, the tax benefit available to people for charitable giving, that being stripped away and used to pay for other things.

The budget essentially now is a Democratic budget. My colleague from North Dakota was here earlier talking about how these problems were all inherited; that the spending all occurred on the past administration's watch and now they are just trying to clean up the mess.

I have to point out to my colleagues in the Senate and to the American people that there are certain givens I think we all would subscribe to, one being the fact that we did have a $5.8 trillion debt at the end of the last administration. Many of us have acknowledged that Republicans didn't do a good enough job when we were in charge of keeping Federal spending under control. But that does not negate the fact that in the next 5 years that $5.8 trillion debt is going to double. In 10 years it is going to triple. In fact, if we go back in the annals of American history, go back starting at the time of the Revolutionary War through the last Presidency, that of President George Bush, from George Washington to George Bush, the accumulated debt over that entire time period will be equaled by the public debt that America will pile up in the next 5 years. It will be tripled in the next 10 years. That is a staggering number.

When you start looking at doubling of the public debt in a 5-year timeframe, tripling in 10 years, when at the end of the 10 years we have $7 trillion in debt or 82 percent of our gross domestic product that is composed of publicly held debt, we have not seen that kind of number since the end of World War II, since 1948.

I would daresay, with all due respect to my colleague from North Dakota who made the point that these are all problems that were passed on by the previous administration, that it was not the Bush administration that put on the table and passed a trillion-dollar stimulus bill. I think it is fair to ask the question, is this trillion dollars in stimulus spending going to be carried on and extended and considered part of the baseline so it will create obligations and liabilities for our Government in the future?

We talked about $1 trillion on the floor of the Senate that actually, according to the CBO, when asked the question, if the spending in this bill is extended and not terminated, how much would it cost, the answer was $3 trillion--with interest, over $3 trillion. That was not a Bush administration policy, nor is the fact that the Omnibus appropriations bill that was passed earlier this year, which had an 8.3-percent increase in spending in it, which was more than double the rate of inflation in this country, nor does this more recently passed budget-- is the Bush administration responsible for that? This is the budget that was put forward by the new administration, that was passed in the Senate without a Republican vote. It went to conference where any amendments that were adopted on the floor of the Senate that had been offered by Republicans were subsequently stripped out.

This budget is a statement of priorities and reflects the spending choices that are made by the new administration and by this Congress. So we cannot blame the past administration for the trillion-dollar stimulus which, if those programs are extended in the future, end up being not $1 trillion but $3 trillion. We cannot blame the past administration for the more than double rate of inflation increase in spending in the annual appropriations bills we passed earlier this year, and we cannot blame the past administration for a budget, a $3.6 trillion budget, that increases nondefense discretionary spending by 8.9 percent this year and piles mountains of debt on future generations.

If we look at the deficits--just the 5-year, which we are limited to--earlier, I used some 10-year numbers. But the 5-year numbers on the deficits we are going to accumulate--2009, the current fiscal year, almost $1.7 trillion; 2010, $1.2 trillion; 2013, $916 billion.

Incidentally, this year, 2009, as a percentage of GDP, that deficit is 12 percent--12 percent of our GDP. The benchmark for getting into the European Union is you cannot have a deficit, as a percentage of GDP, that exceeds 3 percent. Some of our European brothers, I assume, with the bad economy, are in excess of that now too, but the point is we are going to have a 12-percent deficit to GDP ratio which is four times the benchmark for entering the European Union.

The debt as a percentage of our GDP, the debt held by the public, starts at 55 percent this year, goes to 61 next year, 64 the year after, 66 the year after that, 67 the year after that--in 2014, 67 percent of public debt as a percentage of GDP, and if you extend it out for 10 years, which we saw in the original budget blueprint, we are talking about a debt that is 82 percent of our gross domestic product. That is not something for which the past administration is responsible. These are decisions that have been made by the present administration and this Congress when it comes to spending the American taxpayers' dollars.

So you have a stimulus bill which is a trillion dollars, and then again, as I said earlier, if those programs are extended in the future, it ends up being in excess of $3 trillion; you have an Omnibus appropriations bill that passed earlier this year that increased at more than twice the rate of inflation and a budget which increases nondefense discretionary spending in front of us today by 8.9 percent and adds, over the next 5 years, about $5 trillion, $5.5 trillion to the Federal debt. Those are decisions that are being made real-time.

A lot of my colleagues on the other side have a sort of Bush administration phobia. They want to talk about everything that has happened before. Well, there comes a point at which you own these decisions. Decisions have consequences, and there are consequences of the decisions that are being made here.

A lot of people believe that if we continue this rate of spending and taxing and borrowing, in the future, if we continue to pile up the interest on the debt--again, incidentally, at the end of the 10th year, we will spend more on interest on the debt than we actually spend on national defense, about $4 trillion over the course of the next 10 years in interest on the debt, or $52,000 for every household in America. That is just the interest on the debt.

A lot of people think the level of borrowing is going to lead inevitably to higher inflation down the road and therefore higher interest rates and all kinds of other bad economic outcomes that will put this Nation's economy in peril and make it more difficult for us to recover.

So if we are going to have a debate here in the Senate about this budget resolution and the conference report that came out, it should be about what is in front of us, not what has happened in the 8 years previous, because this budget is a budget that was presented and submitted by this administration, adopted by this Congress, adopted here in the Senate without a single Republican vote, then went into conference with the House of Representatives where any Republican amendments which were agreed to on the floor of the Senate, many of which got big votes: Well, just let them go ahead, vote for this stuff. We do not want to put out bad votes against these good amendments; we will strip them in the conference with the House. So those amendments, all of them, were stripped out. So we now have in front of us a budget that includes or makes possible the prospect of a climate change or the carbon tax proposal being done through reconciliation.

The Senator from North Dakota put out a statement that says: Assume that reconciliation will not be used for changes in legislation related to global climate change. Well, that is really nice, but it is a statement. The amendment that was offered by the Senator from Nebraska, Mr. Johanns, which was adopted here on the floor of the Senate, which got 67 votes, was binding, basically said that reconciliation would not be used for climate change legislation. It got an overwhelming vote here in the Senate. A lot of Democrats voted for it. It got stripped in the conference committee, which opens the door to a cap-and-tax proposal that, by some estimates, could cost the average family in this country over $3,000 a year in higher electricity costs. That is not a previous administration issue. This is a real-time budget. This is a real-time issue. These are decisions that are being made by the current administration and the current Congress, make no mistake about it.

The final point I wish to make is that in the context of this--and they have been coming down and saying: There is really no tax increase in this. Well, there is. Taxes are going to go up on a lot of people. Well, they may say it is high-income people, but there are a lot of small businesses that are going to be captured under that net. This is not just going to hit the high-income people because a lot of small businesses that are organized as LLCs or subchapter S's or in some way that allows the income they derive from their small business to flow through to their individual tax return are going to pay higher income tax rates. Instead of paying at 33 and 35 percent, they are going to pay at 40 and 42 percent. Taxes are going to go up on capital gains. Taxes are going to go up on dividends. There are tax increases in there, there is no question about that, and the American people are going to find that out very soon.

The other thing that did not happen in this budget, in this whole sort of pursuit of new Government spending--and there are reconciliation instructions in here for health care reform which can be very costly to the economy and which there is no way of paying for in the budget. It is just assumed at that point that they will come up with the revenue source for that. But you have a health care reconciliation instruction, a climate tax reconciliation instruction, all of which could cost the economy enormous amounts of money, and yet nothing was done in the budget to deal with the fundamental issue that is driving these deficits and this debt for years and years into the future, and that is entitlement programs: Social Security, Medicare, Medicaid. All of these programs on the mandatory side of the budget that continue to drive Government spending, to drive deficits and drive debts well into the future, there is nothing that is done to reduce the overall cost of these mandatory spending programs, these entitlement programs, or to reform them.

The President said we need to reform these and look at all of these entitlement programs. Well, this budget does nothing of the sort. All it does is increase spending, increase taxes, and add mountains and mountains to the public debt--a debt that we hand off to future generations.

So I hope my colleagues will reject and vote down this conference report. It would have been better, it would have been a much improved product had some of the amendments my colleagues on the Republican side had adopted when it was debated here in the Senate been retained in the conference committee. But they weren't. They have been struck, all of them struck, many of which passed by large margins. As I said, I had a couple of amendments on the floor, one with 89 votes and another was 94 votes. You would think, when the Senate makes that kind of statement in support of a particular amendment or policy, you might want to think about retaining that in the conference. Those were struck. The amendment by my colleague from Nebraska, Senator Johanns, which got 67 votes, which directed the conferees not to use reconciliation for climate change legislation, was struck from the conference report.

That is unfortunate. This could have been a better budget. It wouldn't have been a good budget because it still spends too much, taxes too much, and borrows too much, but it certainly would have been improved had some of those amendments been retained.

So I urge my colleagues to vote against this, and I hope, now that this budget is going to pass here and we start doing appropriations bills, that this Congress will get serious about controlling Federal spending, about

doing the serious work that is necessary to get our fiscal house in order. We cannot afford to continue to pass on these mountains and mountains of debt to future generations. It is not fair to them, and it is not fair to the American taxpayer. It is high time we started focusing on this issue and did something about it.

I yield the floor.

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

Madam President, I ask unanimous consent that amendment No. 1002 to the bill be brought up and made pending.

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

Madam President, on October 7, 2008, Congress passed the Troubled Asset Relief Program as part of the Emergency Economic Stabilization Act--or TARP--and allocated $700 billion for the purchase of toxic assets from banks with the goal of restoring liquidity to the financial sector and restarting the flow of credit in our markets.

The Department of Treasury, without consultation from Congress, changed the purpose of the TARP and began injecting capital into financial institutions through a program called the Capital Purchase Program rather than purchasing toxic assets.

Financial lending was not increased with the implementation of CPP, and the expenditure of $218 billion of TARP funds disputes the goal of the program. Those receiving funding through the CPP are now faced with additional restrictions related to accepting that funding.

A number of community banks and large financial institutions have expressed their desire to return their CPP funds to the Department of Treasury, and Treasury has begun the process of accepting receipt of those funds. However, because of the financial stress test Treasury is currently conducting, it is possible that Treasury will restrict banks from returning funds they received from the CPP.

In his testimony before the TARP Congressional Oversight Panel on April 21, 2009, earlier this week, Secretary Geithner stated that Treasury estimates $134.6 billion of TARP funds are still available. What is important about that figure is he includes $25 billion which they expect to receive back from banks under CPP. Geithner also stated that he believed $25 billion is a conservative number, and private analysts predict more will be returned.

Section 120 of the Emergency Stabilization Act terminated the authority for TARP funds on December 31, 2009, and the Secretary can request an extension to the deadline not later than 2 years after enactment. Keep in mind that this restriction only applies to Treasury's issuance of new loans and does not cover the reuse of previously issued assistance that was returned to the Treasury.

Essentially, to summarize what my amendment does, it requires Treasury to use any of the funds that are recovered through TARP to reduce the national debt. Basically, this amendment prevents the Treasury from reallocating money for other purposes. The amendment establishes the public debt reduction payment account and requires Treasury to deposit any amounts received from repayment of financial assistance through TARP into this account. The Secretary of the Treasury must use the money in the public debt reduction payment account to pay, redeem, or buy any Government obligation included in the public debt. The obligations paid, redeemed, or bought are canceled and cannot be reissued. In addition, the statutory debt limit is automatically reduced by any amount equal to funds that are deposited in this account.

I think the amendment is very straightforward, and it really is directed at ensuring that the taxpayer dollars that were allocated for the TARP program, which, as I said before, was about $700 billion last fall, much of which has been expended but much of which now is in the process of being repaid, assuming, again, the mechanism is put in place to allow the Treasury to take receipt of funds that banks wish to repay, TARP funds which they wish to repay--with that money coming into the Treasury--and as I said before, Secretary Geithner earlier this week indicated that it would probably be about $25 billion, at least that we know of now, and there are predictions that it could be much more, that money comes back into the Treasury and could be recycled, reused--what we want to do and what my amendment does is it ensures that those TARP funds that are repaid by banks actually go to reduce the public debt.

We know we have incurred an enormous amount of debt. In fact, the inspector general, Neil Barofsky, stated in his quarterly report to Congress that 12 separate programs are being funded under TARP, involving up to $3 trillion of Government and public funds. Amazingly, that is equivalent to the size of the entire Federal budget. This is certainly not what I believe Congress intended or was told, for that matter, the funding would be used for. So Congress needs to have a role in this. If the administration wants additional authority under TARP, they should come here. Congress retains, under the Constitution, the power of the purse.

What this amendment simply does is directs those funds that come back in as a result of repayments by banks of TARP funds into the Federal Treasury, that those funds go toward reducing the Federal debt, which, as we all know, based on the budget that was passed a couple of weeks ago, is going to double in 5 years and triple in 10, at a rate of $1 trillion a year. The average deficit over the next 10 years, by the end of the 10-year period, will amount to $17 trillion. The very least we can do for the taxpayers of this country is ensure that TARP funds that are repaid by banks, the taxpayer dollars that were extended to help recapitalize the banks, when those are no longer necessary and banks give that money back to the Treasury, Treasury receives that, that those funds not be recycled, reused, go to some discretionary program to fund other programs of Government, but that they be used to reduce the Federal debt. I believe the taxpayers deserve that. This amendment, No. 1002, would do that. So I would hope my colleagues will support it and, in my view, make it very clear that tax dollars expended under TARP, when repaid, are going to go to debt reduction and not be used for some other Federal Government program.

That is what the amendment does. I would urge my colleagues to support it.

I yield the remainder of my time.

I appreciate the observations of the Senator from Vermont. It is a bill that is broadly supported. I understand the objection he will raise with respect to his committee's jurisdiction and what the bill covers.

With regard to my amendment, there is a connection between the underlying bill and what we are trying to accomplish. I previously referenced the inspector general's report about 12 separate programs being funded under TARP that involve up to $3 trillion in government and public funds. Bear in mind, this report spans 247 pages. In that report, it says the very character of the bailout program makes it ``inherently vulnerable to fraud, waste, and abuse, including significant issues related to conflicts of interest facing fund managers, collusion between participants, and vulnerabilities to money laundering.''

I believe this amendment is related to the underlying bill which deals with fraud recovery. The inspector general's report bears that out.

In response, Madam President, to the Senator from Vermont, my amendment would prevent funds from being reused, recycled, that were directed to debt reduction. I guess my short answer, without having reviewed the Coburn amendment carefully, would be, I suspect, that they are probably mutually exclusive.

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

Mr. President, I rise to speak in opposition to the motion of the Senator from Michigan, Ms. Stabenow, that instructs the conferees to include some but not all of the limitations the Senate voted for with respect to climate change legislation.

I think the Senate needs to understand that the effect of this motion would be to instruct conferees on the issue of climate change without including the Senate's protection for consumers against higher gas and electricity prices, which was adopted by the Senate by a vote of 89 to 8 during the debate on the budget resolution. The Senate adopted several budget amendments to try to specify what the parameters should be in the debate over climate change legislation.

One of those amendments that was adopted was one that was sponsored by me. That amendment specified that climate change legislation could not increase electricity or gasoline prices. It was adopted by the Senate by a vote of 89 to 8.

What Senator Stabenow's motion would do if it were agreed to is it would instruct that it would be the Senate's only specific instruction on what should be included in the final budget on climate change legislation, apart from the reconciliation limitations that would be included. So, in other words, other protections, such as those included by my amendment, could be excluded were the conferees to adhere to the instructions in her motion.

The bottom line is, Senator Stabenow's motion to instruct would encourage conferees to drop the commonsense protections adopted by the Senate with a vote of 89 to 8 when it adopted my amendment to the budget resolution.

Just, again, by way of background, I do not think there is anybody who would argue the point that a cap-and-trade proposal is going to raise energy prices. This motion does nothing to include protection against those higher prices.

Under the President's cap-and-trade proposal that was contained in his budget, it would impose what is a massive new energy tax on anyone who drives a car or turns on a light switch.

In fact, Secretary of Transportation Ray LaHood has said the administration is ``not for an increase in the gas tax as long as the economy is bad, people are out of work, people don't have jobs. No one should be promoting an increase in the gas tax.'' The cap-and-trade proposal the President has put forward would do just that. It would also increase the cost of electricity prices.

Secretary of Energy Chu just testified recently:

I think especially now in today's economic climate it would

be completely unwise to want to increase the price of

gasoline.

The President and his Budget Director have been very clear that prices are going to go up on consumers, and they are going to feel the pain, the economic pain associated with higher prices for electricity and gasoline.

The President himself acknowledged that when he was talking about a cap-and-trade proposal some time back. He acknowledged his plan would lead to higher electricity prices, and he said:

Under my plan of a cap and trade system, electricity rates

would necessarily skyrocket.

What happened during the debate on the budget is we adopted my amendment, by a vote of 89 to 8, which specifically stated that any cap-and-trade climate change legislation could not increase electricity rates or gas prices for consumers in this country. The Stabenow motion to instruct, if adopted, would instruct the conferees in an opposite direction. It would exclude that protection that was included in my amendment to the budget resolution.

So I ask my colleagues in the Senate to defeat the Stabenow motion. The Johanns motion, on the other hand, to instruct the conferees not to use reconciliation to accomplish climate change legislation is a good motion. I hope the Senate will vote to adopt it. That was also one that was adopted by a fairly large margin when it was voted on during the debate on the budget a couple weeks ago.

But let me restate as clearly as I can, if the Stabenow motion is adopted by the Senate today, it would instruct the conferees in a number of areas with regard to cap-and-trade legislation, many of which sound good: invest in clean energy technology initiatives, decrease greenhouse gas emissions, create new jobs in a clean technology economy, strengthen the manufacturing competitiveness of the United States, and I could go on. There are nine of them that are stipulated here. The one that is conspicuously and noticeably absent is the protection against higher prices for consumers in the form of higher gasoline prices and higher electric rates.

So it was an amendment adopted by the Senate by a vote of 89 to 8. It would be my view that the Senate should not go back on an overwhelming vote like that, which made it very clear that any climate change legislation should not raise electricity and gasoline prices on American consumers. The Stabenow motion, if adopted, would not include that protection. I ask my colleagues to vote to defeat it.

Mr. President, I yield the floor.

Mr. President, I rise in opposition to the Stabenow motion to instruct. She is correct that it imposes limitations on climate change legislation as adopted during the budget resolution, with one very important deletion, and that is one that consumers care about the most, which prevents consumers from having to pay higher gasoline prices and electricity rates.

If the Senate adopts this motion, it will undermine an amendment I offered to the Senate budget resolution, which passed 89 to 8 in the Senate, which prevents consumers from having to deal with higher gas and electricity rates as a result of climate change legislation. That is an important protection. It is something the conferees need to keep in the budget resolution.

I hope the Senate will vote to defeat the Stabenow motion to instruct because it does undermine what we did in the budget resolution with respect to the protections afforded to consumers when it comes to higher gas and electricity prices. I urge my colleagues to vote no.

Madam President, today I wish to recognize Jonathan Edward Kotilnek, an intern in my Washington, DC, office, for all of the hard work he has done for me, my staff, and the State of South Dakota over the past several months.

Jonathan is a graduate of T.F. Riggs High School in Pierre, SD. Currently, he is attending Marquette University Law School, where he is obtaining his juris doctor. He is a hard worker who has been dedicated to getting the most out of his internship experience.

I extend my sincere thanks and appreciation to Jonathan for all of the fine work he has done and wish him continued success in the years to come.

Madam President, today I wish to recognize Tessa Jean Holkesvik, an intern in my Washington, DC, office, for all of the hard work she has done for me, my staff, and the State of South Dakota over the past several months.

Tessa Jean Holkesvik is a graduate of Central High School in Aberdeen, SD. Currently she is attending George Washington University, where she is majoring in political science. She is a hard worker who has been dedicated to getting the most out of her internship experience.

I extend my sincere thanks and appreciation to Tessa for all of the fine work she has done and wish her continued success in the years to come.

Madam President, today I wish to recognize Brenna Jane Bahr, an intern in my Washington, DC, office, for all of the hard work she has done for me, my staff, and the State of South Dakota over the past several months.

Brenna is a graduate of Aberdeen Central High School in Aberdeen, SD. Currently, she is attending the Catholic University of America, where she is majoring in history. She is a hard worker who has been dedicated to getting the most out of her internship experience.

I would like to extend my sincere thanks and appreciation to Brenna for all of the fine work she has done and wish her continued success in the years to come.

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

Mr. President, my amendment is very straightforward. It creates a budget point of order against any legislation that would raise revenue from a reduction in the tax deduction for charitable donations.

What the Senator from North Dakota is going to say is that it is not included in his budget. As we know, this is a long process, and we also know the President, in his budget, included a proposal that would reduce the amount people could claim as a tax benefit for a charitable donation.

Again, we don't know what is going to happen from this point forward in the budget process. This could go into conference, and a provision like this could be added. Again, this places a point of order against any legislation that would raise revenue from the tax deduction for charitable giving.

Americans gave $300 billion in 2007 to charitable causes, which is equal to 2 percent of our GDP.

A Washington Post article said this:

Diana Aviv, [president of Independent Sector, a national

membership organization of charities] said any decrease in

charitable giving caused by Obama's proposal, no matter how

small, would be `seen as a stake in the heart.' ''--``With

all other means of income down, the idea that there will be

another potential cut to the income of those nonprofit

organizations feels catastrophic,'' Aviv said. ``It is

utterly unacceptable.''

I hope my colleagues will vote for this amendment.

Mr. President, as much as I appreciate the generosity of the Senator in offering me that opportunity, I think this is an important issue. I think the Senate needs to be on record.

I ask for the yeas and nays.

Mr. President, today I wish to honor Al Schock of Sioux Falls, SD, for his years of extraordinary service to his community as a member of the Downtown Lions Club. Mayor Dave Munson of Sioux Falls will be recognizing his lifetime of accomplishments by proclaiming April 14, 2009, to be Al Schock, Lion King Day.

Al Schock has been a dedicated member of the Downtown Lions Club since

1949 and has worked to promote its humanitarian mission of improving lives and communities around the world. He has served in almost every capacity possible, including club president, district governor, and member of the Lions International Board of Directors. Since he first joined the Lions Club, he has shown tremendous leadership by recruiting a total of over 100 new members to the organization. He has also excelled in fundraising for the South Dakota Lions Foundation, having sold over 50,000 tickets to community fundraising events.

Schock has also contributed to the community of Sioux Falls through his involvement with the Chamber of Commerce, the Sioux Falls Development Foundation, Augustana College, the YMCA, the First Lutheran Church, Luther Manor health care, and The Banquet. He and his brother, Ozzie Schock, started the Shock Foundation, a nonprofit organization that works to support local charitable organizations. Al Shock's selfless devotion and faithful service to others and to his community is truly commendable.

It gives me great pleasure to congratulate Al Schock for receiving this honor, and to thank him for all his years of service to South Dakota and our Nation.

Mr. President, will the Senator from Alabama yield for a further question?

Mr. President, is the Senator from Alabama aware that the President's Director of the Office of Management and Budget admitted the same thing last year when he was the Director of the Congressional Budget Office? Peter Orszag said:

Under a cap-and-trade program, firms would not ultimately

bear most of the costs . . . but instead would pass them

along to their customers in the form of higher prices . . .

price increases would be essential to the success of a cap-

and-trade program.

Would the Senator from Alabama yield for a further question?

Mr. President, I appreciate very much the observation that was made about the purpose of reconciliation and the Rules Committee in the House. The House very clearly has the power to regulate what comes to the floor and what amendments are made in order. Reconciliation instructions in the House bill are clearly directed at a House-Senate conference and reserving the opportunity--the option--to actually do something with respect to these other issues.

I wish to point out, too--and I wish to ask a question of the Senator from Alabama regarding the conference committee--even though I believe the best intentions of the Senator from North Dakota and I believe he is sincere when he says he doesn't want to use reconciliation to do cap and trade and to do other types of policy through the budget process-- there is a statement from the majority leader talking about the novel proposal for redoing the Nation's health care system, suggesting that using $646 billion that would be collected under a controversial Obama proposal to auction off greenhouse gas pollution allowances. The exact quote is: ``That's exactly how much we need for the first phase of health care reform.''

My question to my colleague from Alabama is: If, in fact, you get into a conference setting and you want to do health care reform--which clearly they have indicated they would like to do through reconciliation--it has to be paid for somehow, does it not? It is suggested here, I think from at least the majority leader, that the revenues available through cap and trade might, in fact, be used for that.

Would it not be possible in a conference committee setting--despite the best intentions of the Senator from North Dakota--for the members of that conference to decide to use that reconciliation process to create revenues through a cap-and-trade program that might be used to accomplish the financing of health care reform through that bill?

If I might ask the Chair how much time do we have before we break?

If I could have 5 minutes?

I say to the Senator from North Dakota that the Senator from California has offered a side-by-side amendment to the amendment I laid down yesterday. She spoke to that this morning. I wish to at least make some remarks with regard to my amendment. So 5 or 10 minutes would be what I would need to do that.

That would be fine.

Mr. President, I would like to speak to an amendment I laid down yesterday on which there has been a side-by-side amendment offered by the Senator from California. In response to the comments of my colleague from Illinois, there aren't any Republicans who aren't prepared to debate the issue of climate change or energy policy. We just think it ought to be debated in regular order; that when the Senate does take on big consequential items such as this, it ought to be handled in the normal routine, in the way the Senate deals with big consequential issues such as the issue of climate change because it would have a profound impact on the American economy and on American households and families.

There isn't any resistance on this side to that. All we are saying is, it should not be used as a part of the budget process where you expedite this and sort of circumvent the normal rules and procedures of the Senate that would apply to big pieces of legislation. We want to debate that.

Frankly, there are lots of Republicans who are happy to have the debate on climate change, on cap and trade, but also want to make a part of the debate the cost. It is very easy to talk about throwing out different solutions to this issue or talking about the general issue of climate change, but when you start reducing the argument on cap and trade, it has profound economic consequences on the American economy. That is a part of the debate.

If we look at the question of whether climate change is occurring, if one answers that yes, and if human activity is contributing to it, and one answers that yes, we still have to get to the question, if those two points are true: What do we do about it and at what cost? We think that ought to be part of the debate.

The Senator from California has offered a side-by-side amendment to mine. I assume she concedes the point that it would increase electricity and gasoline prices. She adds to that the language ``or increasing the overall burden on consumers through the use of revenues and policies provided in such legislation,'' suggesting there would be some offsets that families who are affected by higher energy costs would benefit from.

If there are going to be additional revenues, they are coming from somewhere. This isn't an imaginary world. This stuff just doesn't appear. We are talking about real costs, real revenues.

I want to point out what the President himself said over a year ago about his cap-and-trade plan:

Under my plan of a cap and trade system, electricity rates

would necessarily skyrocket.

We cannot assume for a minute that there are not going to be enormous costs associated with the proposal of the Senator from California and the cap-and-trade proposal she put forward in the last Congress, of which the President was a cosponsor.

She referred earlier to MIT. Researchers there scored it at $366 billion a year or a cost of $3,128 to the average household. This has an economic cost. It has an impact on our broader economy, an impact specifically on American families and households and American small businesses.

I used data yesterday I had received from utility companies in my State about how this would affect their cost of doing business with regard to residential customers, small business customers, and large industrial users. We would see costs go up as much as 65 percent in some cases.

They used a typical school district. It would on an annual basis double their cost for electricity. These things have costs. That needs to be part of the debate because the American people deserve to know these things have costs.

We need to have a debate about climate change, but we ought to do it in a way that is in regular order, that allows committees to do their work and that contemplates what the costs and consequences of these policies are going to entail for the average person.

This is an amendment provided to give something for the Senator from California and Members on the other side to vote for. The fact is, a cap-and-trade policy will increase electricity and gasoline prices. Nobody disputes that. The question is how much. I happen to believe--as do many others--that the President understates it in his budget, $646 billion in revenue. There are those who believe it would be two or three times that amount. The President himself has said:

Under my plan of a cap and trade system, electricity rates

would necessarily skyrocket.

His OMB Director, Peter Orszag, has said this would all be passed on to consumers. Utility companies will not bear the cost. Corporate America will not. It will be passed on to customers in places such as South Dakota where a higher energy cost is the thing they can least afford these days when we have a bad economy to start with.

I hope when Senators come to vote on these amendments, they will bear in mind these votes have consequences. If they vote against my amendment, they are essentially saying that we are open to, and OK with, a reserve fund created under the budget, a climate change reserve fund that would lead to a lot higher electricity and gasoline prices. All my amendment says is, those gas and electricity prices cannot go up under a cap-and-trade proposal that might be adopted by the Congress and might be included in some reconciliation instruction that comes from a conference committee with the House.

How much time do we have equally divided right now?

Mr. President, we are going to have a vote in just a few minutes on an amendment I offered yesterday, and now there is a side- by-side offered by the Senator from California which tries to modify my amendment in a way that gives folks who want to be able to vote for something, something to vote for when, in fact, my amendment is the one that is very simple and straightforward. That is, if we have a reserve fund created for climate change, the revenues coming into that fund obviously are going to be significant: $646 billion, if the President's budget is accurate, and much more than that by many other analyses that have been done. It simply says that cannot be used to increase electricity rates or gasoline taxes on the American consumer.

So what I would hope that my colleagues will bear in mind when we vote is that any cap-and-trade system that is put in place is going to have a significant increase in energy costs in this country. You can call it what you want--a lightbulb tax, a national energy tax--but it is pretty clear that is going to be the case. The President, a year ago, even made the same argument: ``Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.'' That is a direct quote.

All of the studies that have been done have suggested that this could cost anywhere from, as CBO said, $50 billion a year to $300 billion a year; MIT said $366 billion a year. An enormous amount of money is going to come into the Federal Treasury by any form of cap-and-trade bill that is passed here in the Congress. It just depends on how rigid or how restrictive the caps are as to what that cost is going to be, and there are several other bills that are out there.

What I wish to point out, however, is that the Senator from California--her bill, S. 309 from the last session of Congress, actually designates seven different funds that the revenue would go into. What her amendment would say is that a lot of these revenues would go back in the form of some assistance to consumers in this country, but, in fact, if you look at her legislation, there are seven different funds that it goes into. Essentially, what her bill would do is take all of these revenues that are going to come into the Federal Treasury and distribute them through Government agencies to all of these different areas, including the climate change worker training fund; the adaptation fund, whatever that is; the climate change and national security fund; the Bureau of Land Management emergency firefighting fund; the Forest Service emergency firefighting fund; and the Climate Security Act management fund. Those are six of the funds that are listed in her bill as uses of revenues that would be derived from a cap-and-trade and national energy tax that would be imposed upon the American consumers. Again, I point out that MIT, in their analysis of her bill, said it would cost the average household in this country an additional $3,128 annually in energy costs.

The President himself has said: ``Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.'' Nobody disputes the fact that rates are going to go up. What we are saying is that shouldn't happen; we can't do that, particularly now at a time when the American economy is struggling and most Americans are having to tighten their belts already. To impose a huge national energy sales tax on American consumers would be very ill-timed.

Frankly, I don't believe for a minute that any of the revenues that come in as a result of the imposition of that national energy tax are going to be used to refund the American consumers. There is a $400 and $800 tax credit the President has put in place, but that is a fraction--a fraction--of the amount of the revenue that is going to come in.

So I hope my colleagues will support my amendment and vote against the side-by-side that is being offered by my

colleague from California. I don't think there is any question but this is going to raise taxes, energy taxes in the form of a national sales tax on energy for consumers in this country. My amendment would make it very clear that cannot be the case.

I yield back the remainder of my time.

Will the Senator yield for a question?

Mr. President, I say to my friend from California that when gas prices were going up last summer, many of us were trying to put together a plan that would increase production in this country. We had a simple strategy: find more and use less.

Many of us were working constructively to try to come up with an energy solution that would increase domestic supply so we can drive down the cost of energy. I was engaged in that with a number of colleagues from the other side of the aisle.

But that has nothing to do with this debate. This deals strictly with a cap-and-trade proposal--a national energy tax proposal that is being contemplated in this budget. My amendment also was straightforward and simple. It says any reserve funds created as a result of this budget that would call for climate change legislation cannot raise electricity rates or gasoline prices for American consumers. That is a tax on American consumers when they need it the least.

I hope my colleagues will support my amendment and reject the Boxer amendment.

Mr. President, if you honestly believe the trillions of dollars that are going to come in from a cap-and-trade proposal--what is essentially a national energy sales tax--that those revenues are going to be distributed

back to the American people, then voting for the Boxer amendment was the correct vote.

If you believe, as I do, that the trillions of dollars that come in through a cap-and-trade proposal are, in fact, not going to be rebated to the American people, that they are going to fund programs in Washington, DC, then you should vote for my amendment because my amendment prevents any program that is created--a cap-and-trade program--from increasing electricity rates or gasoline prices for American consumers.

This is a national energy tax on the American people, on American consumers. If you want to vote against that, then voting for my amendment is the correct vote.

I yield the floor.

Probably 15 minutes.

I thank the Senator from North Dakota for yielding. I call up an amendment I have filed at the desk and ask unanimous consent that it be made pending.

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

The Senate is in the process of an important fiscal debate which will set the Federal budget for the next 5 years. The budget process is particularly important as our Nation faces a prolonged recession and an ongoing financial crisis.

I think there are two primary questions facing the Congress at this time. One is, how do we help the middle class cope with the current recession. Secondly, how do we create jobs and investments that will lead us out of this recession?

The Democratically led Congress, I believe, missed a major opportunity to address the economic recession during the debate of the stimulus bill. Rather than providing significant tax relief for middle- class families and small businesses, Congress poured billions of taxpayer dollars into Government programs and pet projects.

The middle class was largely left behind in the stimulus bill. In return for an $800 billion stimulus bill, the average taxpayer gets a temporary tax break of roughly $8 per week, not even enough, in most places, to buy a cup of coffee each day.

Unfortunately, the administration's budget proposal is another missed opportunity to address the fundamental issues that are plaguing our economy. Not only does the administration's budget increase taxes on families and small business owners, it calls for a massive national sales tax on energy as well.

This sales tax, which is implemented in the name of global warming, will dramatically increase energy costs for all consumers. I wish to point out something that President Obama said with regard to that energy cap-and-trade plan. He said:

Under my plan of a cap-and-trade system, electricity rates

would necessarily skyrocket.

This regressive national sales tax on energy will hit lower and middle-income households at a time when they can least afford it. Now, incidentally, the architect of the President's budget, Peter Orszag, who is the Director of the Office of Management and Budget, agrees that the President's energy tax will have a significant impact on energy prices, and lower income families will bear a greater burden on account of this tax.

Orszag testified before Congress that a cap-and-trade program would increase energy costs which will immediately be passed on to the consumer. During a House of Representatives Budget Committee hearing in 2007, Mr. Orszag stated:

Under a cap-and-trade program, firms would not ultimately

bear most of the cost of the allowances, but instead would

pass them along to their customers in the form of higher

prices for products such as electricity and gasoline.

Orszag is also on record saying:

The higher prices caused by the cap would lower real wages

and real returns on capital, which would be equivalent to

raising marginal tax rates on those sources of income.

In September of 2008, Mr. Orszag testified before the House Committee on Ways and Means.

The rise in prices for energy and energy-intensive goods

and services would impose a larger burden relative to income

on low-income households than on high-income households.

Both Mr. Orszag and President Obama, they are not the only ones who believe higher energy prices on account of climate change legislation will have a greater negative impact on low-income families.

I quote from the Wall Street Journal on March 9 of this year:

Cap-and-trade, in other words, is a scheme to redistribute

income and wealth, but in a very curious way. It takes from

the working class and gives to the affluent; takes from

Miami, Ohio, and gives to Miami, Florida; and takes from an

industrial America that is already struggling and gives to

rich Silicon Valley and Wall Street ``green-tech'' investors

who know how to leverage the political class.

I would also quote from Warren Buffet.

That tax [the cap-and-trade tax] is probably going to be

pretty regressive. If you put a cost on putting carbon into

the atmosphere . . . it's going to be borne by customers. And

it's a tax like anything else.

Now is not the right time to place another burden on families who are struggling to make ends meet during the current recession. Many two- income families are now reduced to one. One-income families are trying to make do with reduced wages or fewer hours. Mortgage payments have become a burden too great for millions of families. In light of the unprecedented challenges that are facing the middle class, I find it unconscionable that President Obama and the Democrats in Congress want to place an indirect tax on these families through increased energy costs.

In April of 2007, MIT conducted an economic study of the Sanders- Boxer climate change bill. Interestingly enough, at that time, 2007, then-Senator Obama was a cosponsor of that bill. The proposal he has put in front of us very closely resembles that proposal.

MIT concluded in their analysis of that particular piece of legislation that the Federal Government would take in an additional $366 billion in revenue each year, which is equivalent to over $3,128 per household. That is in the year 2015.

Having said that, if you think about $366 billion coming in in additional revenue to the Federal Government, that means someone in this country is paying that tax. As I mentioned earlier, many have concluded it is not going to be the utilities, those taxes are going to be passed on and borne by power consumers, electric, fuel consumers in this country.

If the MIT study is correct, that would be equivalent to over $3,100 per household. So I think it is important to note that President Obama's cap-and-trade tax is even more stringent than the Sanders-Boxer climate change bill, which I alluded to, which the MIT study makes reference to, which would only increase the national sales tax on energy prices.

In other words, President Obama's cap-and-trade proposal is even more stringent than the one that was analyzed by researchers at MIT who concluded, again, it would cost the average household in this country over $3,100 per year.

President Obama wants to take some of the proceeds from the carbon tax revenue and give it back to families through the Making Work Pay tax credit. The Making Work Pay tax credit totals about $400 per individual and about $800 per married couple. This credit barely covers a fourth of the household costs of the energy cap-and-trade tax of $3,100 per household.

The President's message to the middle class is: Don't worry about paying the additional $3,100 each year in higher energy costs because the Government is going to refund $800 of that total in the form of the making-work-pay tax credit. That comes out to about a quarter of what the tax is going to be, the energy tax that each family will be faced with, if this particular proposal were to become law.

Additionally, a significant number of individuals and married couples making less than $250,000 a year are not going to be eligible for the making-work-pay tax credit and are still going to be hit by the national sales tax on energy. The national energy sales tax is a direct contradiction to President Obama's campaign pledge not to increase taxes on those making less than $250,000 a year. The making-work-pay tax credit does not apply to a lot of people who make under that amount. The energy tax will apply to all of the people in this country to the tune of about $3,100 a year, according to the MIT analysis.

According to a recent Washington Times article, the Obama cap-and- trade proposal could be far more costly than the estimated figures in the Obama budget blueprint. According to this article, President Obama's climate plan could cost close to $2 trillion, which would inevitably be passed on to consumers in the form of higher electricity, gas, and heating oil, as well as higher prices for other goods and services affected by higher energy costs. That is a bad deal for hard- working, taxpaying Americans, and it is the wrong solution to our economic problems.

Like many Midwest States, South Dakota is heavily dependent upon coal power to meet our energy needs. One public power utility in South Dakota analyzed what little details are available on the President's national sales tax on energy and determined that their power costs would increase by $107 million per year by 2015. That represents a 65- percent increase in annual power costs. One of the largest municipal power customers would see their annual costs go up by $13 million for a rural community of just over 20,000 residents. That community is Watertown, SD. One of the largest industrial customers of a municipal power provider would see their electric bill increase by $2 million per year.

Like many other States, South Dakota is trying to deal with the economic recession and is looking for ways to create jobs and help businesses grow. The President's proposal to tax energy will result in a new annual tax of $2 million on just one business in my State. It will kill jobs and stifle economic growth, and it should not be included in the fiscal year 2010 budget resolution.

In the words of the CEO of this South Dakota-based power public power provider:

In plain English, [the President's climate change proposal]

represents a perpetual tax increase on our electric

consumers.

I want to show another power company in South Dakota, Black Hills Corporation, a diversified energy company serving customers in South Dakota, Colorado, Wyoming, Kansas, Nebraska, and Iowa. They have provided some generic examples of how a cap-and-trade proposal would impact the monthly electric bills of various types of customers. The first chart is at $50 per ton of carbon dioxide, a monthly residential bill increases from $94 to $154. That is your average residential bill. A small commercial customer would see their monthly bill increase from $4,500 to $7,500 per month. You probably can't see, because this is fairly small print, that increase, but if you look at what the estimate is, the current cost being $4,500 for a small commercial customer bill, under the proposed climate change tax, if enacted, that would go up to about $7,500 per month.

So we are looking at about a 67-percent increase per month. When you

start multiplying that out, it becomes a staggering amount of money on an annual basis.

A school customer would see their electric bill--this is the same power company, same statistics that apply to this, about $50 per ton of carbon dioxide--if they had a typical bill today of $15,000, under this particular plan they could see that electric bill go from $15,000 a month to $30,000 a month. Again, you probably can't see the small print, but essentially what it is telling us is that a current $15,000- per-month cost for electricity for a typical school in South Dakota would virtually double on a monthly basis. If you annualized that, that is $180,000 a year additional cost for a school in South Dakota which, in most cases, is struggling to provide school supplies and pay teachers fair salaries.

Finally, take a look at a large industrial customer bill, the current monthly cost for power. With the energy tax that is under consideration in the President's proposal, that would go up to about $234,000 per month under the cap-and-trade proposal.

I guess my point is, when you start looking at the kinds of costs this imposes on industries--and I used these examples from my State and information that was furnished to us by utility companies there--if you take a large industrial customer who is going to see their energy costs increase by $110,000 each month and you annualize that, you are looking at an additional $1.4 million each year on account of this proposal.

The bottom line is, the amendment I have offered would amend the reserve fund included in a future climate cap-and-trade proposal. I know several of my colleagues, Republican colleagues, will be offering amendments to strike or lessen the impact of the President's national sales tax on energy as part of the budget process.

What my amendment does is ensure that any cap-and-trade proposal drafted under this deficit-neutral reserve fund would not increase gasoline prices or electricity rates for consumers. I believe this amendment is the very least we can do for consumers dealing with the economic downturn and businesses struggling to make it through a prolonged recession.

I encourage colleagues to support the amendment. I hope we will not include, in any budget resolution or reconciliation instructions coming back from the House or wherever that might occur, any language that would in any way implement the cap-and-trade proposal. This amendment ensures that doesn't happen in a way that would increase gasoline and electricity rates for customers.

I ask that when we get to the vote, my colleagues will support the amendment.

I yield the floor.

Madam President, if I might, I will speak to the amendment I have filed, which is pending and to which the Senator has now offered a side-by-side.

I want to point out, in terms of the way charitable giving works in the country today, how the deduction applies, if you are in, say, a 35- percent tax bracket, a high-income-tax payer, and if you give $10,000 to a charity, it is actually only costing you $6,500. You are getting a 35-percent tax break.

What the administration's proposed budget would do is reduce the favorable tax treatment an individual who gives to a charitable organization would get in the 35-percent tax bracket down to 28 percent. In other words, if somebody gives $10,000 to a charity--say a religious organization or some university--the benefit they would derive, in terms of tax treatment, would go from $3,500 to $2,800. In other words, instead of costing them $6,500 for that charitable contribution of $10,000, it would cost them $7,200. So you would see an increase of 10.8 percent in the amount it would cost someone to make a $10,000 contribution. After the tax treatment is applied, it would cost them $7,200 under the proposed budget we have seen from the administration.

What my amendment simply does is say we ought to keep current law in place with regard to the tax treatment that is applied to charitable contributions. Here is why it is important--particularly now. We have an economy that is struggling. We have lots of charitable organizations that are noticing a dropoff in their contributions because of the economy. People are seeing a reduction in the values of many of the assets they have had, and people are losing jobs. There are a lot of reasons charitable giving is dropping off, and many of the organizations are faced now with a very difficult challenge in order to be able to keep up and meet the needs they are meeting out there across this great country.

We rely, as a nation, significantly on the good-heartedness of the American people when it comes to contributing to many of these fine organizations that are doing good work. I think we ought to keep that same incentive in place--particularly now more than ever. The timing is critical because you are talking about taking away a tax benefit from people who give to charitable organizations at a time when those organizations are already suffering from a drop off in giving.

So my argument would be--and there is a substantial body of evidence out there that suggests this--that when you reduce the tax benefits for charitable giving, say, by about 10 percent, you get about a 10-percent dropoff in giving. In other words, if you did take the 35 percent that currently would apply--if somebody is in the 30-percent tax bracket and makes a $10,000 contribution and deducts that on their income taxes, they get a 35-percent benefit on that, which means a $3,500 savings or, in other words, the actual $10,000 is only costing them $6,500.

But if you change the tax treatment, as is being proposed by the administration, and make that a 28-percent tax benefit, you then increase the amount the $10,000 contribution is costing the giver, the contributor, to $7,200, which is a 10.8-percent increase in the actual cost of that contribution.

As I said, if the data that is out there is accurate--and I believe it is because I think it is substantial--when you reduce that tax benefit by 10 percent, you also get a 10-percent reduction in the amount that individual would give. I think that is significant, particularly now when you look at the amount the American public gives to charitable organizations. You are talking about anywhere from $8 billion to $16 billion a year in reduced charitable giving in this country. Multiplied over a long period of time--5 to 10 years--you are talking about $160 billion, and potentially over 10, that would not be going into these charitable organizations that are serving great purposes across this country.

I think it is fitting right now to have this discussion. People say: Why don't you do this next week on the budget? We probably will because this is a part of the budget proposal. It is also important to talk about this now because we are talking about expanding programs that the government runs right now, which are designed to do good things out there, and to hire volunteers to do charitable work and perform tasks that are contributing to the greater good. Since that debate is focused on what the government can do, I think it is fitting to talk about what people in this country are already doing in the private sector-- individuals who have been blessed by this country and are willing to give something back. I think we ought to encourage more of that not take away from the incentive to do that today.

As I said yesterday in my remarks when I offered this amendment, I don't believe anybody makes a charitable contribution simply because of tax policy. I think people give because they want to give. I do, however, believe tax policy influences the amount of giving an individual makes. The statistics bear that out.

If you have a 10-percent reduction in a tax benefit accorded to somebody who is making a charitable contribution, you are going to see about a 10-percent reduction in the amount of their contribution. That could cost charities significantly all across the country. That is why so many of them have weighed in and suggested that they think it would be a very bad time to go ahead and make this change in tax policy.

My amendment expresses the sense of the Senate--nothing more or less--that puts this body on record saying we ought to keep the full deductibility of charitable contributions as a matter of tax policy in this country.

I think that is a debate that, again, hopefully we will have next week as we debate the President's budget. But I think the President's goal in this is to try to find ways to generate revenue to do other things in their budget. I think this is a bad place to get it. I do not think the savings you are achieving as a result of taking away this tax benefit to charitable giving in the long run is going to in any way offset the decrease we are going to see from people across this country who might otherwise make charitable contributions who, because you take away that tax benefit, are going to see the actual cost of those contributions go up and therefore affect the amount they might otherwise give.

I hope the Senate will go on record. The side-by-side offered by my colleague from Montana affirms the deductibility of charitable contributions from income tax but takes out the word ``full.'' What my amendment does is retains what we have today in terms of tax law, tax policy in its treatment of charitable giving, charitable contributions, and retains the full deductibility of those charitable contributions.

It is important that the sense-of-the-Senate amendment I offered that expresses the view of this body about the deductibility of charitable contributions be the one that we vote on and that we reject the side- by-side that is being offered by the Senator from Montana because it does take away the word ``full,'' which opens the door for changes that will occur in the budget that is going to be offered next week and would reduce the amount--the tax benefit that is accorded to those who make charitable contributions.

I hope when we get to the vote--it does not sound as if it is going to occur until later this afternoon--the Senate will support the Thune amendment, the sense of the Senate affirming support of the Senate for the full deductibility of charitable contributions, and reject the side-by-side offered by the Senator from Montana which does not include the affirmation of full deductibility of that tax benefit. Bear in mind, this is a sense of the Senate. It is not binding, it is not law, but I do think it puts the Senate on record in terms of our full support of full deductibility of charitable contributions.

As I mentioned, timing is important. Right now, with what is happening in the economy and how it is impacting charitable giving to charitable organizations, this is the absolute worst time to be talking about taking away the tax benefit that has produced so much giving and added to the giving people might otherwise do by providing favorable tax treatment. It is an incentive that has worked. It has worked in spades if you look at the amount of giving that occurred in this country in

2007. The number I used in the amendment is $300 billion--2 percent of the GDP--American people contributed to causes greater than themselves. We ought to encourage it, not discourage it. Adopting my sense-of-the- Senate amendment would do that. I hope my colleagues will support it.

I yield back the remainder of my time.

Mr. President, my amendment simply expresses the sense of the Senate that we maintain present law with regard to the deductibility of charitable contributions, that we allow or maintain the current tax treatment practice with regard to charitable contributions, and that is to allow full deductibility. The amendment we just voted on by the Senator from Montana opens the door to something less than full deductibility. I think it is important for the Senate to be on record, particularly in light of the challenges being faced by many charitable organizations these days to keep up with giving.

There was a story in the New York Times this morning that says only 12 percent of charitable organizations expect to end the year with an operating surplus.

Dianne Aviv, president of Independent Sector, a national membership organization of charities, said any decrease in charitable giving caused by Obama's proposal, no matter how small, would be ``seen as a stake in the heart.''

With all other means of income down, the idea that there

will be another potential cut to the income of those

nonprofit organizations feels catastrophic. It is utterly

unacceptable.

We have an opportunity to make a statement here expressing the view of the Senate confirming the current tax treatment for charitable contributions, full deductibility.

Mr. President, today I wish to pay honor to Deputy Sheriff Chad Mechels of Madison, SD, who was killed in the line of duty on Sunday, March 15, 2009, at the age of 32. He is survived by his wife Jamie Mechels and two children, Avery, age 7, and Thomas, age 3.

Chad dedicated his life to a career in law enforcement. He graduated from the South Dakota Law Enforcement Academy in 2005. After graduation, Chad worked with several law enforcement agencies including the Lake County and Kingsbury County Sheriff's Departments. He was currently serving with the Turner County Sheriff's Department when his life was tragically taken.

The sacrifice made by this brave officer is something we should always remember. Everyday heroes, like Chad, are those who keep us all safe. We should all be thankful to our community law enforcement officers who respond to protect the safety of others while sometimes jeopardizing their own.

Deputy Sheriff Chad Mechels paid the ultimate sacrifice in the line of duty, and for that we owe him a debt that can never be repaid. Let us honor Chad and so many other heroes that have made this country great.

Reserving the right to object, I would also ask, as part of that agreement, that I have an amendment that also be made pending as part of the request of the Senator from New Hampshire.

I would be happy to make it available to the distinguished manager of the bill.

I suggest the absence of a quorum.

Let me ask through the Chair, so the understanding would be that the amendment of the Senator from New Hampshire would become the pending amendment?

Is there any understanding beyond that about amendments offered by Members on our side, mine included?

I thank the Senator from Maryland. I withdraw my objection.

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

Mr. President, I ask unanimous consent that the amendment I have at the desk be called up and made pending.

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

Mr. President, President John F. Kennedy said:

The raising of extraordinarily large sums of money, given

voluntarily and freely by millions of our fellow Americans,

is a unique American tradition. . . . Philanthropy, charity,

giving voluntarily and freely . . . call it what you like,

but it is truly a jewel of an American tradition.

In 2007, Americans gave more than $300 billion to charitable causes, an amount equal to roughly 2 percent of the gross domestic product. The vast majority of those donations, roughly 75 percent, or about $229 billion, came from individuals who willingly gave their hard-earned dollars for causes greater than their own.

Studies have shown that Americans give far more to charity than the people of any other industrialized nation. In fact, relative to the size of our economy, Americans gave more than twice as much as the citizens of Great Britain and 10 times more than the citizens of France.

We should be proud of this tradition. Congress should continue to support the 70 percent of all American households that donate to charities to support a wide range of religious, educational, cultural, health care, and environmental goals. These charities provide invaluable public service to society's most vulnerable citizens during difficult economic times. In many cases, these services go above and beyond what any conceivable Government program could provide.

For years, Congress has provided incentives through the Internal Revenue Code to encourage charitable giving by allowing individuals to deduct income given to tax-exempt charities. Over time, 41 million American households have taken advantage of this deduction to give to the charities of their choice.

Unfortunately for these generous families and individuals, President Obama and his administration have proposed, as part of their budget outline, reducing the allowable deduction for charitable giving. According to one study, President Obama's proposal would reduce charitable donations by as much as $8 to $16 billion per year.

Particularly in a time when many charities are already struggling on account of the economic downturn, these entities do not need a change in the Tax Code that would further discourage charitable giving. These organizations that educate our children, care for the sick and the poor, and facilitate religious opportunities should not have to pay the price for additional spending on new Federal programs, as is proposed in the administration's budget.

Over the past several days, this proposal has been criticized by Republicans and Democrats, large companies and small companies, universities and churches, constituents and charities of all shapes and sizes. Therefore, I have offered an amendment to H.R. 1388, the national service bill, which is before the Senate right now, which would express the ``sense of the Senate that Congress should preserve the full income tax deduction for charitable contributions through the Internal Revenue Code of 1986 and look for additional ways to encourage charitable giving rather than to discourage it.''

Americans have a proud tradition of voluntarily giving to those who are in need. Even in these tough economic times, when there is great temptation to save any earned income for better days, families and individuals continue to support our charities. I believe Congress should continue to support those who voluntarily make that sacrifice, and I hope my colleagues will, when this amendment comes up for a vote, support it.

I also point out that a Washington-based coalition of 600 different nonprofit groups opposes this measure and has characterized it as a further disincentive to giving in challenging economic times. It is hard enough, with the economy being in the condition it is these days, people and charitable organizations trying to rely heavily on volunteers and voluntary giving to make ends meet, but it makes it even more complicated when we put policies in place that discourage that.

I wouldn't suggest for a minute that anybody who makes a contribution to a charitable organization does that because of the tax treatment only, but I do believe there is an interaction between our tax policy and charitable giving, and that it definitely affects the amount of those gifts. So rather than dialing back the tax treatment we provide to those who make charitable contributions, in my view, we ought to be encouraging more of that. Certainly the administration's proposal, which would take away the favorable tax treatment for those above certain income categories, is going to cost those organizations who rely heavily upon charitable giving an enormous amount of additional dollars they would receive.

I hope my colleagues would find their way to support my amendment and express the sense of the Senate that we ought not be going down that path, that we ought to retain the current tax treatment that we have for charitable giving, particularly in a time when the economy is struggling and many people, many organizations that rely on that type of giving, are struggling to make ends meet.

I ask that my colleagues, as they consider this particular issue, in light of the underlying bill that does make available new monies for government programs, also give consideration to all of those charitable organizations out there and all of those individuals across this country who, out of the goodness of their hearts, have contributed mightily to make the good causes that are served by these charities move forward.

Mr. President, I yield the floor.