Floor Statements

Mr. President, today I recognize Estelline, SD. The town of Estelline will celebrate the 125th anniversaty of its founding this year.

Located in Hamlin County, Estelline was founded in 1882. The community's folklore explains that the town was named after the daughter of one of its early resident's; however, they just do not know which one. It was either the daughter of a prominent landowner, D.J. Spalding, or of Judge Granville Bennett. This story is just another example of the rich history that can be found in South Dakota's rural communities. Over the past 125 years, Estelline has been a successful and thriving community and I am confident that it will continue to serve as an example of South Dakota values and traditions for the next 125 years.

It gives me great pleasure to rise with the citizens of Estelline in celebrating their 125th anniversary and wish them continued success in the years to come.

Mr. President, today I recognize Onaka, SD. The town of Onaka will celebrate the 100th anniversary of its founding this year.

Located in Faulk County, Onaka was founded in 1907. Onaka has been a successful and thriving community for the past 100 years and I am confident that it will continue to serve as an example of South Dakota values and traditions for many years to come.

I would like to offer my congratulations to the citizens of Onaka on this milestone anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize Philip, SD. The town of Philip will celebrate the 100th anniversary of its founding this year.

Located in Haakon County, Philip was founded in 1907 with the arrival of the Chicago and Northwestern Railroad. It was named after James ``Scotty'' Philip, a local rancher who was known for his efforts to preserve the buffalo population from extinction. Philip has been a successful and thriving community for the past 100 years and I am confident that it will continue to serve as an example of South Dakota values and traditions for the next 100 years.

I would like to offer my congratulations to the citizens of Philip on this milestone anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize Frankfort, SD. Founded in 1882, the town of Frankfort will celebrate its 125th anniversary this year.

Located in Spink County, Frankfort was named after Frankfort I. Fisher, a settler who explored the area. It was also named in part after Frankfurt, Germany. Frankfort has been a successful and thriving community for the past 125 years and I am confident that it will continue to serve as an example of South Dakota values and traditions for the next 125 years.

I would like to offer my congratulations to the citizens of Frankfort on this milestone anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize Warner, SD. Located in Brown County, the town of Warner will celebrate the 125th anniversary of its founding this year.

Since its beginning in 1881, Warner has been a strong reflection of South Dakota's values and traditions. Their community spirit was recognized in 2000, when Warner was honored as South Dakota's ``Community of the Year.'' As they celebrate this milestone anniversary, I am confident that Warner will continue to thrive and succeed for the next 125 years.

I would like to offer my congratulations to the citizens of Warner on their anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize Letcher, SD. The town of

Letcher will celebrate the 125th anniversary of its founding this year.

Located in Sanborn County, Letcher was named after O.T. Letcher, who was Assistant Secretary of Dakota Territory at the time. Since its beginning in 1883, Letcher has been a strong reflection of South Dakota's values and traditions. As they celebrate this milestone anniversary, I am confident that Letcher will continue to thrive and succeed for the next 125 years.

I would like to offer my congratulations to the citizens of Letcher on this milestone anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize the University of South Dakota's Sanford School of Medicine. Founded in 1907, the school will celebrate its 100th anniversary this year.

Throughout the past 100 years, the Sanford School of Medicine has served the State of South Dakota through its excellence in education and research. The school has earned a reputation as one of the best rural medicine and family medicine programs in the Nation. Consistently on the cutting edge of research, Sanford Medical School has world-class programs in heart disease, cell biology, multiple sclerosis, antibiotics, and rural health.

I am confident that the high standard of excellence that has been achieved at the Sanford School of Medicine will continue thanks in part to the generous donation of Sioux Falls businessman, T. Denny Sanford. Sanford's generous gift of $20 million has allowed and will continue to allow the school to develop into a leading research and training institution. In addition, the Sanford School of Medicine is currently constructing the Lee School of Medicine Building, a new high-tech science facility. These improvements will allow the school to continue to serve as a prominent medical institution in the State of South Dakota and across the Nation for the next 100 years.

I offer my congratulations to the Sanford School of Medicine on this milestone anniversary and wish them continued prosperity in the years to come.

Mr. President, today I recognize the South Dakota Newspaper Association as they celebrate their 125th anniversary this year.

Throughout the past 125 years, the SDNA has consistently provided outstanding service to the State of South Dakota. We count on our news organizations to keep the public informed and to promote a sense of community within our State. Currently representing 138 weekly and daily newspapers from all over South Dakota, the SDNA allows newspapers to more effectively perform their role of keeping citizens up-to-date on world events. As they celebrate this milestone anniversary, I am confident that the SDNA will continue to thrive and succeed for the next 125 years.

It gives me great pleasure to rise with the South Dakota Newspaper Association and to congratulate them on this historic occasion. I wish them and all of South Dakota's newspapers continued success in the years to come.

Mr. President, today I recognize Heidi Wentzlaff, an intern in my Sioux Falls, SD 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.

Heidi is a graduate of Centerville Public High School in Centerville, SD. Currently she is attending Augustana College, where she is majoring in government and international affairs. 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 Heidi for all of the fine work she has done and wish her continued success in the years to come.

Madam President, the conference report on the fiscal year 2008 budget resolution isn't only about a bunch of numbers; it is about our priorities for America. It is about our vision for America. A budget in a lot of ways is like a checkbook. A checkbook tells us about an individual's priorities. This is our national checkbook. It tells us where we are and where we want to go as a nation.

The proponents of this budget are proud of their budget, claiming it is fiscally responsible, it reduces the deficit, it makes hard choices, and leads to a balanced budget. Opponents of the budget resolution say it is nothing of the sort. It adds spending, raises taxes, does nothing about long-term entitlement programs and the crisis America faces there. They say it is a tax-and-spend budget doomed to fail because it grows the Government, slows the economy, and will fail to balance the budget. The question for the American people is, who is right. This is no trivial matter. It is not just about our Government's finances and the Nation's prosperity; it is about our jobs and paychecks. It is about our family's budget. It is about our hopes and dreams. So who is right? Is this a tax-and-spend budget or a fiscally responsible budget? In America, everyone is entitled to their own opinion, but not everyone is entitled to their own facts.

Fortunately, we have plenty of facts by which to judge this budget. We have the facts of the budget, the facts of history, and the hard facts of the IRS form 1040 to determine exactly what this budget is and exactly what this budget does for American taxpayers and families.

I believe a reasonable review of those facts will, sadly, conclude this is, in fact, a tax-and-spend budget, that it is based upon hundreds of billions of new spending, and almost a trillion dollars of new taxes, that it will grow the Government and slow the economy, and that it will fail to balance the budget because no tax-and-spend budget ever has, that it is diametrically opposed to the only solution we factually know to successfully balance the budget, and that is to cut spending and reduce taxes.

How do I reach that conclusion? It begins with two facts of any budget: What does the Government spend? What does the Government tax? From this budget we can tell three things about spending. First, we know every dime the Government is spending today. This budget says what the Government will spend tomorrow plus more to account for inflation and population and whatever other factors come into play. This budget does not require a single program termination, not a single program reduction, not a single program freeze. So we know spending doesn't go down. It goes up in a business-as-usual approach.

Next we also know new spending is added, over $200 billion in new spending over the next 5 years with no offset. Finally, we know there are some 24 reserve funds added where billions of new spending can be added. Some of them allow for tax relief, but mostly they add new spending programs or expand existing ones.

The authors of the budget will tell us that any of these new initiatives have to be offset with either spending cuts or new taxes. Given the fact that not one penny of spending is cut in this budget and that billions of new spending is added, I don't think we can expect to see any future spending cuts. That only leaves one thing to pay for it, and that is taxes.

Thus we see every penny of existing Government kept, we see billions of new spending, and we see promises of even more new spending beyond that. However, to be fair, the Democrats do point to one spending cut they may do. They point to provisions, so-called reconciliation instructions, to cut education spending by $750 million over a 5-year period. They want to use the reconciliation process so the provision cannot be filibustered. So to get this straight, out of a budget of $2.542 trillion this year, out of CBO estimated spending of $12 trillion, $37 billion over the next 5 years, the Democrats are going to try and squeeze $750 million out of savings. That is six one hundred thousandths of 1 percent.

This may turn out to become a spending cut, but consider two facts: First, the $750 million cut that might occur is dwarfed by $205 billion in new spending that is scheduled to occur. Second, that $750 million cut is a spending cut not to shrink Government but to actually grow Government.

The education reconciliation instruction is part of an effort to transfer subsidies that private lenders give to student loans and put the Government back in control of student loans. It is a cut not to shrink Government but a cut to shrink the private sector and expand the Government.

So in this budget, what do we have on the spending side? Well, as I said before, we have no spending cuts, no terminations, no freezes. We have $204 billion, $205 billion in new spending. We have numerous new spending initiatives promised, and the single, potential cut is infinitesimally small, is a fraction of new spending and is designed to use a special process to shrink private lenders and expand Government lending.

On the basis of no spending cuts, billions of new spending, promises of even more spending, and a miniscule cut that is actually a Government expansion--from all that--I think any reasonable person could conclude this budget spends more and more.

But what about taxes, the second part of our equation? Does this budget raise taxes? Does it help or harm taxpayers? Democrats insist there are no tax hikes in this budget. No one's taxes are going to go up, they assure us. But is that true?

If you are kind of boring and you care about budget numbers, you might come up with a different answer. If you are a taxpayer and know what it means to fill out your IRS Form 1040, you definitely will not agree with that assessment.

For those who care about the budget, here are the facts. Every budget passed since 2001 has excluded from its future revenue levels the tax cuts that were passed in 2001. In fact, each budget has excluded the revenue reductions from the 2001 tax relief, the 2003 tax relief, and the 2005 tax relief.

These budgets did not count as Federal tax revenue any of those revenues transferred back to taxpayers by those three tax cuts. Instead, every budget said the tax cuts are in your family's budget and not in the Government's budget; that is, until now.

This budget says those tax cuts are no longer part of your family's budget, but they are now part of the Federal Government's budget. Money cannot have two masters, and this budget says the money going to your tax cut has a new master, and it is not you, it is the Government.

In fact, over the next 5 years, some $736 billion in tax relief that Americans enjoyed yesterday and today to pay their bills, to feed their families, to invest in their dreams, will not be in their families' budgets tomorrow but in the Federal Treasury's coffers.

By transferring $736 billion of tax relief you enjoy today out of your families' budgets into the Government budget, the Federal Government revenue baseline makes a huge leap, and from that a deficit projected at $229 billion in 2012 suddenly becomes a surplus.

Do tax hikes account for that swing in the deficit? We know spending has not been cut. In fact, we know spending is going up. So the only reason the budget could swing from a deficit to a surplus in 2012 is because something has happened on the revenue side. Judging how big the deficit swings to surplus, something big must have happened on the revenue side in this budget, and the facts bear that out.

At $736 billion, that tax hike in this budget is not only the biggest tax hike in history, but it is more than double the largest tax hike in history. In fact, this tax hike is two times the record tax hike of $293 billion that was enacted back in 1993 by President Clinton and a Democratic Congress.

In fact, it is interesting to note, because we are talking about $736 billion in the conference report, if you look at the House-passed budget resolution when it left the House and went into conference, the tax increase was $917 billion. At that level, that would exceed and be greater than all the revenues collected to run all the Federal Government budgets for 156 years--from 1789 to 1957, from Washington to Eisenhower. It is a huge tax hike. So from a budgetary perspective, we know that spending goes up, and we know taxes go up. It is not the Government that will be spending less. The only folks spending less under this budget will be the American taxpayers.

That leads to the next tax hike test: the view of the taxpayer. This one is easier, but it is also more painful, as we look at the IRS Form 1040 that most of us filled out a month ago. We can ask the hard question--those of us who filled out the Form 1040 in the last few weeks or months--if losing various tax changes constitutes a tax hike in the mind of the average taxpayer.

So let's take a look at the Form 1040 and the tax changes this budget is specifically based upon and would include.

Now, obviously, as I said earlier, the House-passed version was a $917 billion level. The report that has come out of conference is at a $736 billion increase in taxes. But if you look at it on a Form 1040, you can see--when we started this process, when the budget was passed earlier this year--it eliminated the marriage penalty relief that was enacted a few years back.

It took the dividend income and capital gains income a lot of people have realized when they have sold stocks, or perhaps seniors in particular who have dividend income, and it takes the increase, or the rate on dividend income, from 15 percent--boom--up to 39.6 percent.

Capital gains as well--as shown right down here on the form--if you look at capital gains, which currently is taxed at a 15-percent rate, that is going up. Your tax rate, right there, is also going up to 20 percent. So you have dividend income and capital gains income tax rates going up in both those areas in this budget.

Now, if you turn to the next page of the tax form, you can see other areas in the budget where taxpayers are also going to see increases.

The Senate Democrats in the conference have restored a few of the Senate-passed items in the Tax Code, which I will get back to in a moment. But where we started out in this whole thing was we saw the standard deduction, itemized deduction, mortgage interest deduction, charitable contribution deduction--all those sorts of things that normally taxpayers are able to take--those went down. If you look at the credit for childcare, which is $1,000 today, and in the original budget, that would have gone down to $500, so you would have seen a decrease in that area of the Tax Code.

If you look down to the earned-income tax credit, which a lot of our men and women in uniform, our soldiers, are able to take advantage of, that, too, would have been slashed and gone down.

You can go up and down this Tax Code, and you can pretty much see every area in the Tax Code that was addressed in 2001, 2003, 2005--the tax relief that has been provided to the American taxpayer--those tax cuts are all going to expire and tax rates and everything else is going to go back up.

Now, the last chart I wish to show you is the tax rate schedule, which I think is also important. I am going to come back to this in a minute because, in fairness to my colleagues on the other side, they attempted, in the Senate resolution, to restore, put back, some of this tax relief.

But if you look at the original proposal, as it came forward from the House, the 10-percent lowest tax rate in the rate schedule, which benefits the lowest income taxpayers in this country, would have been slashed all the way through, completely cut, gone--no 10-percent rate.

Now, as I said, in fairness to the Democrats in the Senate, they put that back in, in an amendment, or at least they have alleged to have put it back in at some point, so some of these tax relief items that were knocked out in the House budget resolution get restored.

But the one thing that is clear--they may have done something that, as I said, only time will tell if we are actually going to realize that benefit and have the 10-percent rate restored--the one thing that is clear is that in the tax rate schedule, every other tax rate is going to go up.

So today, if you are paying at the 25-percent rate, your taxes are going to go up to the 28-percent rate. If you are paying at the 28- percent rate, your taxes are going to go up to the 31-percent rate. If today you are paying at the 33-percent rate, your taxes are going to go up to 36 percent--from 33 percent up to 36 percent. If you are paying at the high rate--the 35-percent tax rate--today, when this is all said and done, your tax rate is going to go up to 39.6 percent.

So as you can see throughout the entire rate schedule--this is even assuming the 10-percent rate gets restored for low-income taxpayers-- for every other taxpayer in this country, every other rate in the rate schedule will go up.

What does that mean? That means higher taxes for a lot of Americans across this country. On this basis, I think it is fair to say that typical taxpayers are going to say, yes, these changes constitute a tax hike on them.

Senate Democrats insist there is no tax hike in this budget. So who is right, the taxpayers or the Senate Democrats in their budget? Well, my colleague from North Dakota sees the Democratic budget probably less like a taxpayer, maybe more like a Budget Committee chairman. But this budget, as it was originally proposed, as I said, got rid of the 1,000 tax credit, the 10-percent rate. It got rid of the death tax relief we were going to experience. Their claim now is they put an amendment in the Senate budget, which was adopted in conference, that will restore $180 billion of tax relief that this budget assumed would expire.

Now, if, in fact, there is no tax increase in this budget, why was it necessary to go through the exercise of having an amendment to extend the existing tax relief, such as the 10-percent tax bracket or the child tax credit, or some of the death tax relief that was enacted a few years ago and that will expire in a few years? I think the Senate Democrats saw billions of tax hikes in this budget, such as the taxpayers did, and decided to extend some but not all the tax relief this budget would allow to expire.

Now, by the action of the Baucus amendment that was adopted here, there was an admission, I believe, by the Democrats that billions and billions of dollars of what average taxpayers would call tax hikes actually are in the Democratic budget. If that were not true, we would not have needed an amendment, the Baucus amendment, to attempt to restore some of the tax relief that is set to expire in a few years constituting, as I said earlier, the largest tax increase in American history.

So it looks to me like what happened was an attempt to try and camouflage or disguise what clearly is a very large tax increase on the American people. No matter how they try--we will put this other chart up here--this budget cannot camouflage or disguise the extent to which taxes are going to go up on the American people.

The purpose of this whole exercise in having an amendment that allegedly would, as I said, restore some of the tax relief, was to provide a figleaf, not for the taxpayers in this country but for the tax raisers right here in the Congress.

Again, I wish to illustrate this was the $916 billion in new taxes that came out of the House budget resolution. The bill that left here, the Senate, and which is in the conference report we have before us today, as I said earlier, attempts to restore some of that tax relief.

So what did our colleagues on the other side do? They took a figleaf and said: We want to provide some cover for people here in the Congress who want to see taxes go up. Yet with the American people, what the American people see is a figleaf because this is a figleaf for the tax raisers and provides no cover whatsoever for the taxpayers; that is, the American people.

So even if you say we are going to restore the 10-percent tax rate, some of the death tax benefit that would accrue--and if not extended would expire--even if we do some of these other things they say they have done in their budget, you cannot address all the additional tax increases that are going to happen in this budget.

Let's say you cover some of the child tax credit, let's say you do some of the death tax repeal, let's say you even provide some of the marriage penalty relief that was enacted in 2001 and 2003 and allow that to be restored, you still just make a small dent in the overall tax increase of $900 billion.

So what do we have? We have $180 billion basically put back, restored, to try to provide a cover or some figleaf for over $900 billion in tax increases. So what we have ended up with is a $736 billion increase as opposed to a $900 billion increase.

So the bottom line in all this is, the amendment that passed the Senate--the $180 billion in the conference report--provides some level of coverage. It provides a little cover. There is a little figleaf of coverage there. But in the end, for the American taxpayer, it is about one-fifth of the expected tax hike, and it looks pretty doubtful we will even realize that.

So let me, if I might, say--looking at the other chart on the Form 1040--even if you assume the Democratic amendment puts that $180 billion of figleaf coverage back in there and does something about the child tax credit--which was $1,000 and went down to $500, but they say it goes back to up to $1,000--you are still going to pay more taxes because you are going to lose some of your mortgage interest deduction in the area of itemized deductions. Let's say they did something on the alternative minimum tax which they say they help correct in their $180 billion fig leaf amendment, but you still are going to pay higher taxes on line 43 because your tax rates are going up.

So the point of this whole thing is that in the Tax Code, if you look at a typical 1040 and you are a taxpayer, it is very clear what is happening here. If you are a tax-raiser in Washington, DC, obviously you come to a very different conclusion. But if you are someone who is out there and you are looking at the Tax Code and you are looking at your 1040--and let's just pop up this other chart for these purposes one last time--and you are going through this exercise and you say: OK, gee whiz, they gave us the marriage penalty relief back, well, you are still going to see, if you have dividend income, that

going from the 15-percent rate up to the 39.6-percent rate. You are also going to see capital gains rates--if you have any kind of a mutual fund or anything like that which shows a capital gain, your tax rate is going to go from 15 percent up to 20 percent. You can't deny what is the reality of this whole exercise.

The other thing I will point out is that if you look at what works in terms of balancing a budget, it is pretty clear this formula isn't the one that works.

Back in 1997, I was a Member of the House of Representatives, and at that time, as we went through the process of balancing the budget, we had a Republican Congress, a Democratic President, and they agreed to a balanced budget plan that actually got the job done. In fact, the Republican budget plan President Clinton signed into law had two primary features: It had spending cuts of $263 billion, and it had $95 billion in tax cuts. So what did it do? It cut spending and it cut taxes. What was the result of that? Well, we saw the economy grow, we saw Government revenues grow, and pretty soon we were running surpluses.

This budget is very different from that one. This budget has $205 billion of new spending and, as I said earlier, $736 billion in new taxes.

So in 1997 when we had record spending cuts--$263 billion over a 5- year period, and tax cuts of $95 billion over a 5-year period--we saw a good result. We saw an economy that started to grow, we saw the Government start generating surpluses, and that is the exact opposite model of what we are talking about here today. We are talking about a budget today that increases spending by $200 billion a year, that increases taxes by $736 billion a year, and I think that ends up being a formula for higher spending, higher taxes, and a slower growing economy.

This budget is the mirror opposite of what was done in 1997 and yielded the good results that came as a result of a Republican Congress working with President Clinton at that time to get a balanced budget which actually cut taxes, which cut spending. Spending went down, taxes went down, the economy grew, we saw more Government revenue, and that is exactly what we would like to see out of this budget. But, as I said earlier, this budget is the mirror opposite of that budget. This budget increases taxes, it increases spending, and my fear is we are going to see the Government grow--which it will--and we are going to see the economy slow. I hope that doesn't happen, but I don't think, when you increase spending in Washington, DC, and grow the Government and increase and raise taxes, you are going to see the kind of effect on the economy we saw in 1997 when we cut Government spending and cut taxes.

I appreciate the opportunity to come speak to this budget resolution. I will join with many of my colleagues in opposing this because I believe it is the wrong formula for America's future. Higher spending, higher taxes, and more government is not what this economy needs, and it is not what the taxpayers of America need--the people who fill out those 1040s every single year. We ought to keep them in mind because they are the ones who are paying the bills.

With that, I yield the floor.

Mr. President, this Chamber has spent a good deal of time

recently discussing an important topic that affects all consumers in this country--the high cost of prescription drugs. Not only do rising prescription drug costs contribute to all individuals' health insurance costs--but our health care providers feel the burden of these rising costs as well.

In my home State of South Dakota, rural hospitals serve as a lifeline to thousands of constituents living in medically underserved areas--and the rising cost of drugs continues to squeeze their budgets. As we continue to see in all regions of the country, cost directly impacts access.

In 1992, Congress created the 340B program under Medicaid to lower the cost of drugs purchased by a limited number of entities serving a high number of low-income and uninsured individuals--such as Federally Qualified Health Care Centers and nonprofit hospitals providing care to a disproportionate share of Medicaid patients. Under the 340B program, pharmaceutical manufacturers are required to provide these entities discounts on outpatient drugs as part of each manufacturer's Medicaid participation agreement.

This week, I was pleased to reintroduce legislation with my colleague from New Mexico, Senator Bingaman, to improve the 340B program and extend these discounts so that they not only apply to outpatient drug purchases, but also inpatient prescription drug purchases for qualifying hospitals.

Additionally, this bill would expand eligibility in the program to all critical access hospitals, as well as sole community hospitals and rural referral centers that serve a high percentage of low-income and indigent patients.

This legislation includes important provisions to improve the integrity of the program and generate savings to Medicaid. Specifically, the bill would generate savings for the Medicaid program by requiring participating hospitals to credit Medicaid with a percentage of their savings on inpatient drugs. Additionally, the bill seeks to enhance the overall efficiency of the 340B program through improved enforcement and compliance measures with respect to manufacturers and covered entities.

Hospitals serving predominately rural areas, such as the 38 critical access hospitals in South Dakota, play a crucial role in my State in providing care to patients in underserved communities. Extending the 340B drug discount program to these hospitals will help them to afford their prescription drugs--and at the same time lower the overall cost of care at these hospitals and to the Federal Government.

The 340B Program Improvement and Integrity Act of 2007 is commonsense legislation that reduces the cost of drugs for health care providers serving society's most vulnerable citizens. I look forward to working with my colleagues on both sides of the aisle to get this bipartisan legislation passed and signed into law.

Mr. President, today I rise to recognize Raleigh Tiahrt, 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.

Raleigh is a graduate of Vermillion High School in Vermillion, SD. Currently he is attending the University of Minnesota where he is pursuing majors in mathematics and philosophy. He plans to finish his education at the University of South Dakota in Vermillion. 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 Raleigh for all of the fine work he has done and wish him continued success in the years to come.

Mr. President, today I rise to recognize Sara Koch, 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.

Sara is a graduate of Custer High School in Custer, SD. Currently she is attending South Dakota State University where she is pursuing majors in business and political science. She has also been active in Teenage Republicans and College Republicans. 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 Sara for all of the fine work she has done and wish her continued success in the years to come.

Mr. President, I wish to thank the Senator from New Hampshire for yielding and also to just elaborate on some of the things he talked about with regard to his motion. I congratulate him on offering this motion to instruct because I believe it gets at the heart of this issue, which is whether we are going to continue this economic expansion, the job growth that has come with it, the explosion in Government revenues associated with the tax relief that was enacted in 2001 and 2003 or whether we are going to go down the opposite path and increase taxes by, as he said, the largest amount in American history.

Now, up until this last year, this budget we are talking about today, the largest tax increase in American history happened in 1993. That was $293 billion in increased taxes that was put through the Congress in that year. What has been proposed this year, through the budget process in the other body, in the House of Representatives, was a $916 billion tax increase, and, as the Senator from New Hampshire has noted, here in the Senate it is a $700 billion tax increase.

The only question really before us is whether this conference committee which is going to meet is going to adopt the House version, which is triple the largest tax increase in American history, or adopt the Senate version, which is double the largest tax increase in American history. Either way, whether we adopt the Senate-passed budget or the House-passed budget, we will be adopting the largest tax increase in American history--if we adopt the House version, three times the largest tax increase in history and, if we adopt the Senate version, more than two times the largest tax increase in American history.

So the gentleman from New Hampshire, the Senator who has proposed a motion that would instruct the conferees who will be meeting, the Senate conferees who will be meeting with the House conferees to work out and reconcile the differences between these two budget resolutions--one, as I said, is the House, which is triple the largest tax increase, or the Senate version, which is double--his motion would essentially instruct the Senate conferees to go into that conference with a position that doesn't accept the House tax increase or the Senate tax increase; rather, it allows these existing tax cuts to stay in law--in other words, not to allow them to expire.

I have a chart here which illustrates a little bit about what I am speaking of today, and this chart essentially shows what is included in that $900 billion tax increase. As I said earlier, the Senate, in its budget resolution, adopted a position that restored about $180 billion of the tax relief that would expire under the House-adopted budget resolution. As we can see, this is the amount taxes will go up if this budget is adopted. This is the amount the Senate said we will put back with the Senate budget resolution here, which our colleagues on the other side were able to get through the Senate. It puts back $180 billion.

I will give the House credit because the House voted yesterday on a motion to instruct their conferees to adopt the Senate language. That makes sense because I think they heard what a lot of people said when they went home and met with their constituents; that is, we don't want to see the largest tax increase in American history. We don't want another $900 billion in taxes imposed on the American economy at a time when the economy is growing and expanding and creating jobs.

Just look at the last few years here: 7\1/2\ million new jobs, unemployment at 4.5, 4.6 percent, the lowest historical average in the last three decades, 21 consecutive quarters of economic growth.

This is the counterintuitive part about this because, as was pointed out back in 2001 and 2003 when these tax cuts were being debated, if we reduce taxes the revenues are going to go down. Well, in fact, the opposite has happened. What has happened is what has happened throughout the course of history--under the Harding administration in the 1920s, the Kennedy administration in the 1960s, the Reagan administration in the 1980s, and now currently; that is, when you reduce marginal income tax rates, capital gains income rates, what happens? People take their realizations, they pay their taxes, they reinvest, and you get not less Government revenue but more Government revenue--in this case, dramatically more Government revenue.

Between 2004 and this year, we have seen Government revenues increase by $300 billion; that is, revenue coming into the Federal Treasury between 2004 and 2005 was up almost 15 percent, 14.7 percent; between 2005 and 2006, around 13 percent; and in this current fiscal year, the first 7 months of this current fiscal year, Government revenues are up 11.3 percent over last year. In fact, in the month of April, we have $70 billion more Government revenue than April a year ago.

These tax cuts are working not only to stimulate the economy and to create jobs but, as I said before, miraculously, to generate more Government revenue. We have $300 billion more Government revenue coming in as a result of reducing taxes, which again proves the historical fact that when you reduce marginal income tax rates and capital gains tax rates on the American people, they take their realizations, they pay taxes, they invest, they create more jobs, the economy continues to expand, and you get not less Government revenue but more Government revenue.

So I think what is happening here in the Senate is an attempt to provide a fig leaf of cover when it comes to this issue of taxes. The problem with that is this particular cover is a cover not for the taxpayers in this country, it is perhaps a cover for the tax raisers in this country. It is a small cover, however, because if you take $180 billion of tax relief that is restored under the budget resolution adopted here in the Senate, you can cover some of this stuff.

What they propose is that we are going to put back some of the marriage penalty that would come back into play under the House-passed version, and we are going to restore some of the 10-percent tax rate-- the lowest tax rate, which applies to people making $15,000 and less-- and we are going to provide some death tax relief. We will lower the top death tax rate from 55 percent to 45 percent. Well, what does that do? What do you do, then, about the alternative minimum tax, which is going to hit 20 million additional taxpayers if this budget is adopted? What about the child tax credit, which under the Democratic plan is slashed from $1,000 back to $500? What about lower tax rates throughout the rest of the rate schedule? Even if you fix, as they attempt to do with this small amount of tax relief, the 10-percent tax bracket, the lowest tax bracket, you still have tax increases in every other tax rate on the schedule. In fact, those who are paying 25 percent taxes are now going to go up to 28 percent. Those who were paying at the 28- percent rate currently will see their tax rate going up to 31 percent. Those paying at the 33-percent rate are going to see their tax rates go up to 36 percent. Those fortunate few paying at the 35-percent rate, the highest marginal tax rate today, are going to see their tax rates go up to 39.6 percent.

My point is, you can provide a fig leaf to say that we are doing something to allow for some of these tax cuts, this tax relief which has benefited our economy and the American people into the foreseeable future, but what about the rest of all these tax breaks that are going to expire, which means the largest tax increase in American history?

If we look at what the motion of the Senator from New Hampshire does, it says we want to extend these tax breaks to include the deduction for student loan interest. There are a lot of working families trying to put their kids through college who are taking advantage of that tax break.

How about the earned-income tax credit, which is helping a lot of our military families, many of them serving in Iraq and Afghanistan?

As I said before, the child tax credit is being slashed from $1,000 down to $500, essentially cutting in half the amount of credit a working family can get for their children when they file their tax returns. That was something

which was put in place to help working families.

I can go right down the list. Let's take senior citizens' dividend income--currently taxed at the capital gains rate of 15 percent, but under this proposal it goes up to 39 percent. We have a lot of seniors in this country who have invested and now have dividend income, capital gains income. Their capital gains income rates are going to go up as well. If they have capital gains income they are going to show, that will go up from 15 percent to 20 percent.

My point very simply is that if you pay taxes in America today, the prescription in this budget resolution which was adopted here by the Senate, put forward by our colleagues on the other side and the one adopted by the House, has one prescription: higher taxes. Every working American who pays taxes today is going to see their tax bill go up. In fact, in my State of South Dakota, which I will use as an example, the average tax increase on a working family in South Dakota would be $2,596 under this budget, with 2,840 jobs being lost and $262 million lost in our economy. That is in my State of South Dakota, and probably, if you take any other State, you would find the numbers to be dramatically higher in terms of job loss, in terms of the loss to the local economy and the impact it is going to have on taxpayers.

Again, just in an attempt to summarize what I am saying here, the Democrats have attempted, in the form of a fig leaf, to provide some amount of tax relief cover in this budget. What they do not tell us is that the amount of tax relief does nothing to cover the increase in taxes that will occur under this budget. They take about $180 billion off the table and say to the American people: Keep that. But they are still going to be raising taxes by over $700 billion, even if the Senate version of this budget resolution is adopted in conference. If the House version ends up being adopted, it will be over a $900 billion tax increase--the largest tax increase in American history by three times in the House, over two times in the Senate.

Again, if you take this amount, this fig leaf, and you say: We are going to put the 10-percent rate back, we are going to do something to provide some marriage penalty relief because we think married couples ought not to be penalized for being married, which I happen to agree with, and that was part of the tax relief passed in 2001 and 2003, and I think they realize that is a popular piece of tax relief, so they are going to attempt to restore some of these things--that still doesn't do anything about capital gains and dividends, which will hit seniors, or anything about R&D tax credits or the per-child tax credit or anything on the rate structure, the rates which go from 25 percent up to 28, from 28 to 31, from 33 to 36, and from 35 to 39.6. Every rate on the rate schedule is going up under this particular proposal.

So I am here today to support the motion of the Senator from New Hampshire to instruct the conferees as they go into conference between the House and the Senate to leave these tax cuts alone. Don't allow them to expire. Don't permit the largest tax increase in American history at a time when the economy is growing and expanding and creating jobs and we are seeing not less Government revenue but dramatically more Government revenue, to the tune of a $300 billion increase in Government revenues just in the past 3 years alone.

These tax cuts are working. They are having their desired effect. They are accomplishing what was intended in the first place when this Congress, in its wisdom, enacted these tax cuts in 2001 and 2003. It would be a shame to take a fig leaf and try to say to the American people, to the taxpayers of this country, that we are going to provide a little bit of cover for the tax raisers here in the Congress, but we aren't going to do anything to provide cover for the American taxpayer, those people who are going to pay higher rates in all these areas if this budget is passed and if the conference report comes back either with the Senate version or the House version, both of which increase taxes, it is just a question of by how much.

So I hope we can adopt and get the votes necessary to pass the motion of the Senator from New Hampshire to instruct our conferees to allow these tax cuts to stay in place. Don't allow them to expire, don't raise taxes, don't do something that would harm our economy and the jobs being created by passing the largest tax increase in American history.

With that, Mr. President, I yield the floor.

Will the Senator yield for a question?

I understand my colleague from North Dakota. We both come from an area of the country where we have a lot of hard-working, plain- spoken people. They get this. If you have a bunch of tax cuts that are in law today and you allow them to expire, which is what this budget does, that constitutes a tax increase. People in my part of the country get that. If you are not trying to hide something, why would you put a fig leaf on it? The amendment offered to the budget by our colleagues on the other side said: We will take the more popular things, and we will allow those tax cuts to be extended, which to me and those I represent very simply implies that the ones you aren't extending are going to expire, which constitutes a tax increase. We can talk about whether that is $300 billion or whether, if you include the AMT, it is $700 billion. But the fact is, the House budget resolution allows the tax cuts to expire to the tune of $916 billion. The Senate said: We are going to put a fig leaf on that, and we are going to allow $180 billion in tax relief, which to me implies they understand exactly what they are doing. They are trying to hide this tax increase by putting a fig leaf on it.

To the people in my State and the people of New Hampshire and the people of North Dakota, this is a very simple thing. They get this. They understand what they tried to accomplish when this was debated in the Senate during the debate on the budget resolution was simply to put a fig leaf on this to offer up some tax cuts, some tax relief, and they wouldn't have had to do that, if they weren't raising taxes by $916 billion. It is pretty straightforward.

The motion of the Senator from New Hampshire is very straightforward. All it says is: Let's allow these tax cuts to be extended because they have created jobs, 7.5 million new jobs, 21 consecutive quarters of economic growth, 4.5-percent unemployment rate, and $300 billion in additional Government revenue over the past 3 years. Government revenues have not gone down. They have gone up. We have not less Government revenue; we have more as a result. Why would you fix something that is not broken? That is something people in the part of the country I represented understand clearly. If you are allowing tax cuts to expire, if you are not extending them, you are raising taxes.

I am not sure it was a question.

Mr. President, today I rise to recognize Kate Martin, 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.

Kate is a graduate of Ellendale High School in Ellendale, ND. Currently she is attending the University of North Dakota, where she is majoring in marketing and is pursuing a minor in international business. She is also active in her sorority Kappa Alpha Theta. 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 Kate for all of the fine work she has done and wish her continued success in the years to come.