Floor Statements

Mr. President, President Obama's first 100 days in office make for compelling news stories, but what we should focus on is how the first 100 days will affect our future. This will go down in history as the most expensive 100 days for the American people.

Since his inauguration, President Obama has signed into law $1.19 trillion in new spending. That is $11.9 billion of spending for each day he has been in office. Those figures do not include the $3.7 trillion budget for next year, a measure now awaiting final action on the Senate floor.

The Congressional Budget Office estimates that if this budget is passed and signed into law, by 2019, the public debt will reach 82.4 percent of our gross domestic product. That means more new debt will be created under this one budget than all the combined debt created by all the previous 43 Presidents, all the way back to President George Washington.

His own advisers acknowledge the budget will put us on an unsustainable course. It proposes a sweeping change of course for the U.S. economy that will shift the balance of power away from the private sector toward the Federal Government.

It is not just the uncharted levels of spending and debt; this budget levies higher taxes on every household in the form of a national energy tax and puts taxpayers on the hook to pay for a larger and more intrusive Federal Government.

In other words, this budget spends too much, taxes too much, and borrows too much. On spending, President Obama has made his proposed new spending sound more palatable by describing it as an ``investment'' that will pay off by saving us money down the road.

Most of the new spending, however, is for services and programs whose long-term value continues to be debated. Nor is there any intention of cutting spending in the future. This budget does not propose one-time investments followed by areas of reduced spending. Instead, billions in new outlays will continue indefinitely, meaning the permanent accruement of power in Washington.

Rolling back the Federal Government's reach in the coming years could prove a Sisyphean challenge. Those of us in Washington need to keep in mind that families and small businesses, now more than ever, make sacrifices and tradeoffs in their own budgets. Should Washington not do the same?

This budget continues business as usual, making no hard choices about how to rein in out-of-control Government spending. In fact, the budget is so big that, according to the Heritage Foundation, a quarter of a million new Federal bureaucrats may be required to spend it all.

Federal Government employees represent the largest group of new jobs created under this bill. In response to concerns about the spending, President Obama has instructed his Cabinet to cut $100 million from the budget in the next 90 days. Wow, $100 million. That represents just .003 percent of the budget. Let me put it in context. It is hard to imagine an Arizona family using the same math to trim its budget. A typical Arizona family makes $47,215 per year. Say they would like a budget similar to the President's. That means their budget would be $71,848 in the coming year. But they have to cut .003 percent. That is $2.05. So they still have a debt of $24,631 to put on the family credit card. Unsustainable.

No family would decide to do this. It would not put them on a course for future prosperity. We need to cut a lot more than that .003 for this budget to be fiscally sustainable.

On the matter of taxes, the President has said he will cut taxes for 95 percent of Americans. But his budget would raise taxes by $1.4 trillion over the next 10 years. It would implement a new $646 billion energy tax that will affect every American household regardless of income and is estimated to increase energy costs for every family by as much as $3,168 annually.

It is described as a downpayment, meaning there is much more to come. This tax is touted as a way to curb greenhouse gas emissions. But it will unavoidably tax every economic activity, since almost every aspect of our daily lives requires energy from fossil fuels.

I recall President Obama telling the San Francisco Chronicle that: ``Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.''

Mr. President, how much time do I have remaining?

Economic historian John Steele Gordon draws a good analogy to an energy tax in the April issue of Commentary magazine:

``If passed it will act on the economy as a whole exactly the way a governor acts on a steam engine, increasingly resisting any increase in revolutions per minute,'' Gordon writes.

He continues:

With the supply of licenses to emit carbon dioxide fixed,

the price of the permits will inevitably rise as economic

activity picks up. That means that any increase in overall

demand will increase the price of energy. . . . That will

damp down demand. The more the economy tries to speed up the

more [this tax] will work to prevent it from doing so.

Does this sound like a good idea--especially in time of recession?

The budget also lets some of the existing low tax rates expire, thus raising taxes, which also hurts our economy.

We need to keep in mind that our economy is a complex and dynamic force, made up of individuals and families deciding on how much they want to save, spend and invest and whether to create new jobs or open new businesses.

Usually, it resists policymakers' attempts to manipulate and control it. It is not a ball of clay that Washington can mold any way it wants to and expect never to encounter adverse results. There are negative consequences to what we do.

We are obviously straying too far from the principle that the purpose of taxes is to pay for the costs of government in a way that does the least damage to the economy. Now we are using tax policy to redistribute wealth. How many activities or services can we now think of that the Government does not tax or is not aiming to tax?

Finally, there is the matter of borrowing too much, the debt and the deficit. In 5 years this budget will double the public debt; in 10 years it will triple the public debt. That is why we can say that just this one budget accumulates more debt than every President of the United States combined previous to now. The Congressional Budget Office projects that the President's budget

will accumulate $9.2 trillion in deficits. That would raise the debt held by the public to an astonishing 82.4 percent of GDP in the year 2019.

My colleague, Senator McCain, told us during the campaign that spending and deficits are two sides of the same coin; that President Obama's spending promises would raise deficits to unsustainable levels and that huge tax hikes, and not just for the wealthy, would be required to pay for it all. Even the President's Office of Management and Budget Director Peter Orszag has confirmed what Senator McCain said all along: These levels of spending and deficits will not be sustainable.

Let me quote an editorial comment from the Washington Post recently:

President Obama's budget plan would have the government

spending more than 23 percent of gross domestic product

throughout the second half of this decade while collecting

less than 19 percent of revenue.

Is this the legacy we want to leave the next generation, unprecedented debt?

On this side of the aisle the answer to that question is no. That is why we are concerned about the effect of the past 100 days on our country's future.

And we can't forget the finance charges. By 2014, the interest on the national debt will be the largest single expenditure in the budget, more than we'll spend on education, on healthcare, on national security.

This excessive borrowing also increases our dependence on creditors in countries such as China and Russia. Other countries now hold more than half of America's total publicly held debt. As Senator Bayh pointed out in a recent Wall Street Journal column, when other countries hold a large amount of our debt they also have leverage to influence our currency, trade, and national security policies.

All of us share the goal of getting the economy back on track. We need a budget that meets the test of fiscal responsibility. This budget does not. Moreover, it contradict's the President's campaign promises for a net spending reduction and no tax increases for 95 percent of Americans. The unprecedented amounts of spending, taxing, and borrowing are sure to hinder an economic recovery.

As President Reagan said: Facts are stubborn things. We have seen throughout our country's history that increasing taxes and introducing new regulation during a recession has never led to economic growth. Why would this time be any different? Right now we should be working on growing our economy, not growing the Federal Government.

The following Senator is necessarily absent: the Senator from Alabama (Mr. Sessions).

Further, if present and voting, the Senator from Alabama (Mr. Sessions) would have voted: ``nay.''

The following Senator is necessarily absent: the Senator from Alabama (Mr. Sessions).

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

Mr. President, Governor Sebelius is a talented public servant. Nonetheless, I will oppose her nomination for several reasons.

Others have emphasized her relationship with Dr. George Tiller, so I will address another matter--my concerns about the use of comparative effectiveness research under the administration's proposed health care plan to ration health care.

Comparative effective research is currently used to evaluate the strength and weaknesses of various medical interventions. If structured appropriately, it can be a great help to both physicians and patients, to help them make health care decisions. But without the appropriate safeguards, the Government can misuse it to deny or delay patient coverage and services based on factors such as age, relative health, or the number of people ahead in line for a particular treatment.

Unfortunately, Governor Sebelius's answers to my questions made clear that the administration and Health and Human Services under her watch would be unwilling to support patient safeguards. She did not provide any assurance that Health and Human Services, Federal health care programs, or any new Government entity, such as the Federal Coordinating Council, will not use this tool to ration or deny care. This should be a matter of concern for every American.

We must not enable a panel of Washington bureaucrats to decide who is eligible for a particular treatment or when they can get it. In countries that have government-rationed health care, patients sit on long waiting lists to have procedures such as an MRI or dental surgery or hip replacement, to name a few.

I recently read an article in the Wall Street Journal by Nadeem Esmail, Director of Health System Performance Studies at the Fraser Institute in Calgary, in Alberta, Canada, entitled: ``Too Old For Hip Surgery.'' The article recounted stories of our neighbors in Canada who routinely wait months and even years for a specialist's care. Many cross the border to see U.S. doctors to get the immediate treatment they need. Lawsuits tied to Canada's health care rationing system often wind up decided by their courts. Is this what we want in America?

Governor Sebelius's answers about comparative effectiveness research relied on two points, which were inaccurate and contradicted one another, raising more doubt rather than providing assurance. Let me briefly address those points.

When Governor Sebelius stated during her hearing, ``The law prohibits Medicare from using comparative effectiveness research to deny coverage,'' she was referencing the 2003 drug bill which applies only to prescription drugs and not to any other aspect of medical treatment. So she is factually wrong to suggest that could be a future limitation on health care generally. Of course, the fact that we so limited it in the 2003 prescription drug bill makes the point that it does need to be limited.

In this regard she also said: ``When authorizing comparative effectiveness research in both the Medicare Modernization Act and the American Recovery and Reinvestment Act, Congress did not impose any limits on it.'' That statement is true. It also is precisely the problem.

The National Institutes of Health is already taking the steps necessary to make cost-based research a priority and to use it to ration health care. A recent National Institutes of Health project description states:

Cost effectiveness research will provide accurate and

objective information to guide future policies that support

the allocation of health resources for the treatment of acute

and chronic conditions.

Allocation of health resources is, of course, a euphemism for denying care based on cost. And Governor Sebelius will not agree to terminate this project.

There is no question that health care reform is badly needed, and I want to work toward that goal. All Americans, especially those who are unemployed or who work for a business that doesn't provide health insurance or who have a preexisting condition deserve a better approach. But rationing based on cost is neither a practical nor satisfactory route to achieve it; it will delay access to treatment that may be urgently

necessary and discourage the kind of research that leads to promising new treatments.

I believe every American has the right to choose the doctor, hospital, and health plan that best fits his or her needs. Flexibility is essential in medicine, and each patient should be cared for as an individual, with a treatment regimen crafted and tailored by his or her own physician, not by a Washington bureaucrat. So I oppose the nomination of Governor Sebelius to head the Health and Human Services Department, because I do not believe she is sufficiently committed to these same principles.

The following Senator is necessarily absent: the Senator from Alabama (Mr. Sessions).

The following Senators are necessarily absent: the Senator from Kansas (Mr. Brownback), the Senator from Kentucky (Mr. Bunning), the Senator from North Carolina (Mr. Burr), the Senator from Texas (Mr. Cornyn), the Senator from Nevada (Mr. Ensign), the Senator from Florida (Mr. Martinez), the Senator from Kansas (Mr. Roberts), the Senator from Louisiana (Mr. Vitter), and the Senator from Ohio (Mr. Voinovich).

Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``yea.'' The Senator from Texas (Mr. Cornyn) would have voted ``yea.''

Madam President, in an April 16 Wall Street Journal column, ``Speaking Truth to Muslim Power,'' former CIA officer and Middle East expert Reuel Marc Gerecht writes about the fierce internal debates over Islam, jihadism, and modernity within the Muslim Middle East.

As Gerecht writes, while Western countries cannot determine the outcome of those debates, they can help shape them and provide a boost to Muslim reformers. While it is fashionable to criticize President George W. Bush's Middle East policies, Gerecht says that Arab democracy activists ``have never been so hopeful as they were'' from 2002 to 2006, during which time democracy promotion flourished. He argues that President Bush's pro-democracy rhetoric ``energized the discussion of representative government and human rights abroad.''

I ask unanimous consent that Mr. Gerecht's column be printed in the Record, and I urge my colleagues to consider his thoughtful views.

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

Madam President, I have an amendment pending--I believe the number is amendment No. 989--and I wish to speak to that amendment and three other amendments which differ only in the amount of a cap on recoveries. The amendments pending are amendments Nos. 989, 988, and 987. Madam President, 986 is the pending amendment. So we will get this straightened out.

Let me speak to the issue first generally, and then I will engage my colleague in a couple of unanimous consent requests that may resolve the issue. If not, then we can vote on the final one.

The point of these amendments is to limit the amount that can be deducted from the money that is due to the Government under the False Claims Act as compensation for what are called private realtors. A private realtor is a whistleblower or an investigator who goes to court with evidence that the Government has been defrauded and is entitled to money under the False Claims Act. In order to encourage these private parties to come forward, the False Claims Act not only entitles these private realtors to recover from the defendant their costs and expenses for investigating and pressing the claims but also allows the private realtor to receive a portion of the proceeds due to the United States.

I think we would all agree it is right and proper that the private realtors be compensated for exposing incidents for which the Federal Government has been defrauded. Such actions have saved the Government billions of dollars over the years.

Unfortunately, the formula for compensating private realtors uses a percentage range to award a portion of the Government's recovery to the realtor. The law allows the private realtor to collect up to 30 percent of the proceeds that are due to the Government.

Now, when this formula was first set back in 1986, I don't think any of us contemplated that the massive billion-dollar recoveries we have seen today would allow this kind of recovery to the private parties as well. So although

I think we all agree whistleblowers deserve to be compensated when they save the Government money, I would also think we could agree there has to be some limit; that they don't deserve to be grossly overcompensated, especially when that compensation comes at the expense of the Federal Treasury.

Let me note a few cases. I will put this entire statement in the Record which has a lot of other cases as well, but my colleagues will get the idea from just a few that I will mention.

Private realtors shared $95 million as their share of a $559 million civil settlement paid to the United States by TAP Pharmaceutical Products. Private realtors shared $78 million as their share of a $438 million Federal settlement paid to the United States by Eli Lilly. A private realtor will receive $47.8 million as his share of a recently announced $325 million settlement paid to the Government by Northrop. Another will share $46.4 million as their share of a $375 million settlement paid to the United States by Cephelon. There are several more of these cases, all in the $30-, $40-, $50 million range, for payments that have been made to the Government as a result of this law.

The point is, when they are sharing in that much of the proceeds, they are denying the taxpayers the benefit of the False Claims Act which was, of course, intended to benefit the Treasury and not to significantly benefit these private realtors.

So, again, it is fair to generously compensate them when they help expose malfeasance that has cost the Federal Government money. We want them to receive an incentive to blow the whistle on fraud or corruption. However, the amounts I have described--$95 million in just one case, for example--are wildly in excess of what is necessary to spur such whistleblowing. These amounts all come at the expense of the Treasury.

Let me indicate the kind of savings the Government could achieve under this amendment.

The first request I will make today would cap the private realtor recovery at either $5 million or 300 percent of the expenses and costs in investigating and proving fraud against the Government. In other words, it is sort of a triple damages: for the amount of money they put into it, there is, in effect, a 400-percent recovery; they get 100 percent of their expenses, plus another 300 percent above that. It seems to me this provides more than adequate incentive for the whistleblowers who become aware of fraud and therefore expose it.

In the eight cases I have described in my statement, five of which I mentioned, private realtors received more than $427 million at the expense of the Government. When just one case awards the private realtors $95 million, the numbers add up pretty quickly. So under this request I will make in just a moment, these same private realtors would still have received a grand total of at least $40 million from the Government. Under my amendment, the Government would have been able to keep an additional $387 million. So think about it. This amendment would have saved the Government $387 million.

So let me conclude at this point. I have been advised there are very few law firms--but some law firms--that specialize in these cases. Obviously, they are fighting the amendment because quite a little cottage industry has grown. But I would note to my colleagues if my recommendation is not accepted--if my colleagues conclude that $5 million is not enough for the Government to pay a whistleblower--then what I would suggest is we make that amount higher, and I will offer subsequent requests to support a higher amount.

I wish to note as well there will inevitably be new cases in which outsized awards are paid at the expense of the Government's recovery. For example, just last week, a False Claims Act suit against Quest Diagnostics resulted in a $302 million recovery for the Federal Government, but out of that amount, the Government was forced to pay $45 million to the private realtor. Had my amendment been law, the private realtor would still have received at least $5 million for exposing the fraud, but the Treasury would have received, and therefore saved, an additional $40 million.

So let me ask, rather than having a vote on each of these four amendments--and I have discussed this with the chairman of the Judiciary Committee and we have had a genial discussion; and I suspect I know, at least the first couple of times, the fate of my unanimous consent requests. Nonetheless, amendment No. 989 would provide a $5 million cap.

I would therefore ask unanimous consent that amendment No. 989 be considered and that the Senate be on record as supporting amendment No. 989 with the $5 million cap.

Mr. President, I appreciate the points made by the chairman of the Judiciary Committee. There does need to be a reward, and there is some subjective judgment in what kind of a cap is appropriate for the reasons that he pointed out. As a result, reasonable people could differ as to whether a $5 million cap would be too much.

For that reason, I indicated if the chairman thought it was too much, I would suggest doubling the amount to a $10 million cap which might be appropriate. That is actually encompassed in amendment No. 988.

So at this time I ask unanimous consent that amendment No. 988 be considered pending and be adopted by unanimous consent, setting a $10 million cap on these recoveries.

Mr. President, as I said, I think it is going to be a little harder to object to a $20 million cap, but at this time let me ask-- again, this is subjective. How much of a reward is enough to cause people to come forward? Given that we have this cottage industry of firms that has found they can make a lot of money on these cases, it seems to me there is adequate reward for whistleblowers who usually-- and I am sure the chairman would agree--usually come forward simply because they see something that is wrong and they have the moral courage to come forward and say: We don't think this practice is right. And they usually don't do it for the financial reward. The law firms that are involved do very well out of this.

So my last unanimous consent request would be to consider amendment No. 987 as pending, which would set a $20 million cap on these awards.

Mr. President, finally, amendment No. 986, which is pending, sets a $50 million cap.

I certainly agree with the chairman that you don't want to fix something that is not broken. I submit that back in 1986, a long time ago, these multibillion-dollar awards were not contemplated, and times have changed. In the 20 or 30 years' passage of time, we have seen this cottage industry of litigation grow, when the kinds of awards that can be recovered--for example, a $97 million award--are simply beyond the pale. They were not contemplated. So it is broken to the extent that we have no upper limit in a case such as that.

Amendment No. 986

Therefore, I call up amendment 986, which is pending, and I request the yeas and nays on that amendment. If the chairman wishes to respond, I will withhold calling for the vote until he has responded.

That is correct, yes.

Yes.

Mr. President, the purpose of this amendment is to provide a limitation of $50 million for the recovery of the whistleblowers who bring actions that result in recovery for the Government of money that otherwise would have been lost due to fraud. There needs to be a reward, and most of these whistleblowers, frankly, are not looking for money. But it seems to me, from 1986 when we did this, we never contemplated these multibillion-dollar settlements or awards, and to provide up to 30 percent of that to the people who bring the action is too much. We could save the Federal Government a lot of money if we put in a modest limitation. I would argue a $50 million award per case is a pretty liberal award. My amendment would cap the award at $50 million, and I ask my colleagues to support the amendment.

The following Senators are necessarily absent: the Senator from Tennessee (Mr. Alexander) and the Senator from Kansas (Mr. Roberts).

Further, if present and voting, the Senator from Tennessee (Mr. Alexander) would have voted: ``yea.''

The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the Senator from Ohio (Mr. Voinovich).

The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the Senator from Ohio (Mr. Voinovich).

The following Senators are necessarily absent: the Senator from Kansas (Ms. Roberts) and the Senator from Ohio (Mr. Voinovich).

The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the Senator from Alaska (Ms. Murkowski).

The following Senators are necessarily absent: the Senator from Alaska (Ms. Murkowski) and the Senator from Kansas (Mr. Roberts).

The following Senators are necessarily absent: the Senator from Alaska (Ms. Murkowski) and the Senator from Kansas (Mr. Roberts).

The following Senators are necessarily absent: the Senator from Alaska (Ms. Murkowski) and the Senator from Kansas (Mr. Roberts).

Madam President, I ask unanimous consent to lay aside the pending amendment for purposes of offering an amendment.

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

Madam President, let me describe this amendment briefly and note that it is my understanding that when Senator Leahy is able to be on the Senate floor, it is his intention to suggest that we take this amendment by unanimous consent. It has been worked out with representatives on both sides of the aisle, but I would like to describe it briefly.

This is an amendment relating to section 4 of the bill, which amends the False Claims Act. My amendment replaces the bill's proposed definition of the word ``obligation,'' which has important implications for the so-called ``reverse'' False Claims Act pursuant to which private parties may be held liable for failing to pay an obligation due to the United States.

This amendment originally grew out of concerns about the underlying bill that were raised by the Chamber of Commerce and other business groups. Having reviewed those concerns, I have concluded that some of them could only arise under a strained reading of the bill.

The bill's new definition of the word ``obligation,'' in particular, posed several problems. The original language spoke of ``contingent'' obligations. Such contingent or potential duties could include duties to pay penalties or fines, which could arise--and at least become ``contingent'' obligations--as soon as the conduct that is the basis for the fine has occurred.

Obviously, we don't want the Government or anyone else suing under the False Claims Act to treble and enforce a fine before the duty to pay that fine has been formally established. It is unlikely that Justice would ever have brought suit to enforce a claim of this nature, but the FCA can also be enforced by private realtors who often may be motivated by personal gain and not always exercise the same good judgment that the Government usually does.

To preclude such a reading of the act, my amendment strikes contingent obligations from the FCA's new definition of ``obligation.''

My amendment also makes a few other housekeeping changes to the definition of ``obligation.'' It removes the words ``quasi-contractual relationship.'' A ``quasi-contract'' is a remedy for a breach of duty, not an independent source of a duty. The amendment also makes clear that the words ``similar relationship'' only modify the words ``fee- based relationship'' and not the entire list of relationships that precede that term.

Under some readings of the rule of the last antecedent, the comma in the committee-reported bill that preceded the words ``or similar relationship'' could be read to reverse the usual presumption of that rule and have the words ``similar relationship'' modify all of the words in that list. My amendment makes clear that ``similar relationship'' only modifies ``fee-based relationship.''

As a result of discussions with the sponsors of the bill, I have also agreed to allow my amendment to add duties arising out of regulations, rather than just statutes, to the list of obligations made actionable under the law. I declined, however, to also allow obligations to be enforced that arise out of a mere rule. The term ``rule'' is defined at section 551 of title V, and as that definition makes clear, the term is far too broad. It can include all manner of rules of which defendants would have no reasonable notice.

Regulations, on the other hand, are published in the Federal Register in the Code of Federal Regulations, and so Congress can reasonably expect participants in regulated industries to have notice of them. Thus, as amended, the term ``obligation'' encompasses duties arising out of statutes and out of formal regulations published in the CFR.

I might also say a few words about aspects of the definition of obligation that I ultimately concluded that it was not necessary to address in this amendment. At the Judiciary Committee's mark up of this bill, I circulated an amendment that would limit obligations arising out the retention of any overpayment so as to make clear that no obligation arises if the defendant is pursuing some type of administrative, judicial, or other process for reconciliation of alleged overpayments. The sponsors of the bill raised the concern, however, that such a safe harbor might immunize parties that intentionally and maliciously obtain an overpayment, and then spend years exhausting a reconciliation process, all in bad faith and knowing full well that they must repay the money, but earning interest on the overpayment in the interim. Apparently incidents like this have occurred, in cases involving sums that allowed the defendant to earn tens of millions of dollars in interest. The sponsors of the bill also noted to me that, under subparagraph (G)'s modification of the reverse False Claims

Act, avoiding or decreasing an obligation is only actionable, in relevant part, if the defendant ``knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.'' Therefore, a good-faith pursuit of a reconciliation process would not be actionable.

I asked my staff to research the meaning of ``knowingly and improperly'' to confirm that a person who pursues reconciliation of an overpayment in good faith could not be held liable under the reverse False Claims Act. The answer that I received is that the term ``knowingly and improperly,'' though infrequently used in the caselaw, is consistently construed to mean that a person either acted with bad intent or that he employed means that are inherently tortious or illegal.

For example, the State of Massachusetts uses the standard of ``knowing and improper'' to determine whether a business competitor's inducing a third party to breach a contract constitutes tortious interference with contract. See Boyle v. Boston Foundation, Inc., 788 F.Supp. 627 (D. Mass. 1992); Restuccia v. Burk Technology, Inc., 1996 WL 1329386, at *3 (Aug. 13, 1996). And as the cases giving content to the Massachusetts standard make clear, under that test the ``[d]efendant's liability may arise from improper motives or from the use of improper means.'' United Truck Leasing Corp. v. Geltman, 406 Mass. 811, 816 (1990) (quoting Top Service Body Shop, Inc. v. Allstate Ins. Co., 283 Or. 201, 209-210 (1978). See also United Truck Leasing at pages 816-817, quoting other cases as construing this standard to require an ``improper purpose or improper means.'' The Top Service Body Shop case, quoted by the Massachusetts court, further elaborates, at footnote 11, on what types of means constitute ``improper means.'' These are noted to commonly include ``violence, threats or other intimidation, deceit or misrepresentation, bribery, unfounded litigation, defamation, or disparaging falsehood.'' In the False Claim Act context, this list may include other improper means, but ``improper means'' must be means that are malum in se--that is, means that are inherently wrongful and constitute an independent tort.

Though less carefully considered than the Massachusetts intentional- interference jurisprudence, other judicial uses of the words ``knowing and improper'' confirm that the term would not reach good-faith exhaustion of procedures for reconciling an overpayment. In the Matter of Banas, 144 N.J. 75, 81 (1996), for example, reprimands a lawyer for ``knowingly and improperly retaining--his client's--$5,000 payment.'' And the court makes clear that it bases this conclusion on a previous finding that the lawyer ``knew from the beginning that the purpose of the payment'' was to satisfy a condition that he had not met. See Banas at 80. In another attorney-sanctions case, In re Aston-Nevada Limited Partnership, 391 B.R. 84, 102 (D. Nev. 2006), the court found that the lawyer ``repeatedly, knowingly, and improperly'' misused particular words in his filings, and then emphasized that the lawyer's ``prevarications and misstatements were deliberate and not careless.''

Given that the words ``knowingly and improperly'' have a fixed meaning that, at the very least, requires either improper motives or inherently improper means, the changes made by this bill cannot be read to make actionable the retention of an overpayment when the defendant is pursuing in good-faith the exhaustion of a reconciliation procedure. It is with this understanding that I have declined to insist on further qualification of the bill's predication of liability on the retention of an overpayment.

Finally, as a matter of usage, I would note that, contrary to the wording of the bill's new definition of ``obligation,'' duties arise from contracts and the like, not from ``relationships.'' The bill's language is somewhat Oprahfied in this regard, but given that the sponsors have accommodated me on other, more substantial issues, I did not think it worth forcing a rewording of the provision to address this problem.

Other groups have also suggested the bill's new definition of the word ``claim,'' by encompassing situations where money is spent or used ``to advance a government program or interest,'' could make actionable under the False Claims Act any garden-variety overbilling or underpayment of a contractor by a subcontractor if some Federal money is involved in the project. I think this is an unreasonable reading of the bill that is precluded by the committee report, as well as by common sense. The report makes clear that the purpose of the new definition of ``claim'' is to overrule the Totten and Allison Engine cases and preclude application of a formalistic presentment requirement of an unnecessary intent requirement, and to restore the previous understanding of the law. And that previous understanding, as well as common sense, dictate that a particular transaction does not ``advance a Government program or interest'' unless it is predominantly federal in character--something that at least would require, as the report notes in footnote 4, that the claim ultimately results in a loss to the government. Obviously, the government does not intend to make actionable under the FCA any garden-variety dispute between a general contractor and a subcontractor simply because the general receives some federal money. On the other hand, if the transaction is still predominantly Federal in character, and the false claim results in a loss to the government, recovery under the FCA should not be precluded simply because the claim was not directly presented to the government, or because the malfeasant did not specifically intend to defraud the government.

Madam President, I ask unanimous consent to lay aside this amendment for the purpose of calling up four other amendments pending at the desk, and those numbers are 986, 987, 988, and 989.

I am happy to share these amendments with the other side, but I was not aware the other side had a veto over amendments offered by Members of this side of the aisle.

I am happy to share the amendment, of course. I will withhold for a moment so the Senator can see what the amendment is, and perhaps we can move forward.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 985

Mr. President, I will describe this amendment in one sentence so as not to be more confusing than it otherwise would be. It is clearly a technical amendment and has strong support on both sides. It modifies the bill's definition of the term ``obligation'' as used in the reverse False Claims Act to exclude contingent obligations, thus precluding the possibility that conduct that makes a defendant liable for a penalty or a fine could become actionable under this law before that fine is actually established or assessed. I believe the amendment is agreed to on both sides.

The following Senator is necessarily absent: the Senator from Kansas (Mr. Roberts).

The following Senator is necessarily absent: the Senator from Kansas (Mr. Roberts).

Mr. President, I ask unanimous consent to lay aside the pending amendment for the purpose of offering four amendments.

Mr. President, I will offer one amendment at this time.

Mr. President, amendment No. 986 is at the desk. I call it up for its consideration.

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

I will explain. The other three amendments are precisely the same, except they have a different dollar amount in them. I will ask for their consideration later, or for their introduction at a later time.

At this point, I defer to the Senator from Oklahoma if he is ready.

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

Mr. President, I rise in opposition to Ambassador Christopher Hill's nomination to serve as the next U.S. Ambassador to Iraq. As Senator Brownback and I stated in a letter to Secretary of State Clinton regarding Ambassador Hill's nomination:

Our role as United States Senators is not to choose the

President's envoys. However, in the exercise of the Senate's

constitutionally mandated role of advising and consenting to

nominations, we are required to judge the qualifications by

ambassadorial candidates on several levels, not least their

past record of dealing with our own branch of government.

I do not believe Ambassador Hill has the requisite experience to be our Ambassador to Iraq at this critical time in that young democracy's history. Beyond that, serious allegations have been made by members of the press as well as Members of this body that call into question Mr. Hill's ability to follow orders and his willingness to be forthcoming and truthful with the Senate itself. I believe these allegations merit much more rigorous review.

Many of my colleagues believe that Iraq is at a critical and fragile juncture and that now is no time to delay the installation of our Ambassador to that country, and to them I say I could not agree more. However, I would also say to them it is even more critical that we send an Ambassador who has the proper experience for the tough task ahead of him. We should be sending someone who understands the complex and unique historical, cultural, and tribal intricacies of those with whom he will be interacting and negotiating. We should be sending someone who speaks their language, literally. We should be sending someone who, over their distinguished career at the State Department, has at least had one assignment to the Middle East. Ambassador Hill has had none. At no time during his 32 years has he had an assignment there, nor does he speak Arabic. Surely, the State Department has at least one distinguished diplomat who has career experience in the Middle East.

Some of my colleagues argue that Ambassador Hill's experience in Kosovo and Bosnia give him crucial experience solving complex problems of ethnic civil wars. After 6 years of, I would hope, lessons learned, I am sure my colleagues would agree with me that we should not approach the cultural and ethnic nuances in Iraq with a same-thing-only- different diplomacy. I certainly hope the Obama administration is not taking a one-size-fits-all approach to the world.

Iraq's history is not that of Kosovo or Bosnia. Its cultural and ethnic makeup is completely unique. We need someone who understands Iraq's history, culture, and, yes, language. That is why the choice of Ambassador Ryan Crocker was so inspired--a diplomat who, over his career at the State Department, had been assigned to Iran, Qatar, Lebanon, Egypt, Syria, Afghanistan, and Pakistan--all before he took on his assignment as Ambassador to Iraq. In addition, he spoke Persian and Arabic.

Much of our recent success in Iraq is because of Ambassador Crocker's lifetime of knowledge and understanding of Iraq and its neighbors' cultural and ethnic history. While I don't expect a carbon copy of Ambassador Crocker, I do assert again that surely the State Department has to have at least one distinguished diplomat with relevant experience in the Middle East. If it doesn't--if its bench for Iraq is one diplomat deep--we need to find out what is going on over at the State Department.

Moreover, I worry what signal it sends--when coupled with the recent campaign rhetoric--of our commitment to sustain the hard-fought gains of the surge by sending an ambassador to Iraq with no experience in the region. What message does that send to Iraqi leaders who are nervous that the U.S. commitment to finish what we started has ended?

In addition to his lack of Middle East experience, recent press reports about Ambassador Hill's conduct as head of the U.S. delegation of the six-party talks on the North Korean nuclear issue raise serious doubts about his fitness to serve in such a sensitive position as Ambassador to Iraq.

Twice, Ambassador Hill allegedly disobeyed orders from the President and Secretary Rice not to engage in any bilateral meetings with the North Koreans. According to Stephen Hayes of the Weekly Standard:

On July 9, 2005, [Secretary of State] Rice had given

approval for a trilateral meeting with the Chinese and the

North Koreans in an effort to get the North Koreans to return

to the six-party talks on their nuclear program. . . . The

Chinese didn't show up, as they had promised. Hill

nonetheless met alone with the North Koreans and gave them an

important propaganda victory.

We cannot afford to have diplomats exceeding their authority and engaging in freelance diplomacy when they see fit and in direct opposition to the wishes of the President and the Secretary of State.

That is why Senator Brownback and I wrote to Secretary Clinton and asked her to provide us with all relevant cables and correspondence regarding Ambassador Hill's instruction for these two meetings so that we can establish the facts. These matters could have been cleared up by now if the State Department had responded to the letter that Senator Brownback and I sent. It has not chosen to do so. We have no response.

Finally, Senator Brownback raised questions about Ambassador Hill's truthfulness to the Senate. The Senator spoke to this matter.

The position of U.S. Ambassador to Iraq is among the most sensitive missions we have in the world at this time. It is critical that ambassadors follow the letter and spirit of the orders given by the President and the Secretary of State. It is equally important that anytime an ambassador gives assurances to the Senate that something will be carried out, or certain actions will not be engaged in, that those assurances be rock solid.

Mr. President, for the reasons I have articulated--and I associate myself with the remarks of Senators Brownback and McCain--I regret that I cannot support Christopher Hill's nomination to replace Ambassador Crocker as U.S. Ambassador to Iraq.

The following Senator is necessarily absent: the Senator from Kansas (Mr. Roberts).

The following Senator is necessarily absent: the Senator from Alaska (Ms. Murkowski).

The following Senator is necessarily absent: the Senator from Alabama (Mr. Sessions).

The following Senator is necessarily absent: the Senator from Pennsylvania (Mr. Specter).

Further, if present and voting, the Senator from Pennsylvania (Mr. Specter) would have voted ``yea.''

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

Mr. President, the Senate just voted to support estate tax relief set at $5 million per person to be exempted and at no more than a 35-percent rate. The Durbin amendment creates a point of order unless you have a rate of at least 45 percent and a $3.5 million per person exempted amount. It is directly contrary to what we just voted for. Were this to be adopted, you would have two absolutely contradictory instructions--one for a $5 million exempted amount; the Durbin amendment, $3.5 million. Having voted the way we did, the Durbin amendment should be defeated.

To the extent that it suggests there should be other tax relief, I stipulate to that, I am all for it. But the point of order relates to anything above the $3.5 million or below the 45-percent rate.

I urge my colleagues to vote against it.

It is.

Mr. President, during these recent budget debates, I have been reminded that some in Washington used to mock President Reagan for the ``rosy economic scenarios'' they said his budgets relied upon. But never--until now--has any President's economic model differed so fundamentally from those predicted by most independent analysts.

President Obama's budget chief, Peter Orszag, predicts that from 2010-2013 the economy will grow 4 percent a year. But the blue-chip economic forecasters say it is much lower--about 2.7 percent. That is a big difference when we are talking about hundreds of billions of dollars.

President Obama claims his budget will halve the deficit by 2014. But the way it gets there is by first running up a huge deficit and then cutting that number in half. The Congressional Budget Office now projects a $1.669 trillion deficit in 2009 that will bottom out at $658 billion in 2012, which is still more than 40 percent above the highest deficit during the Bush administration. But the Congressional Budget Office also says the deficits accumulated by Obama's budget will then surge to $9.2 trillion in 2019.

President Obama has said he will cut taxes for 95 percent of Americans. But his budget would raise taxes by $1.4 trillion over 10 years. It not only lets some of the existing tax rates expire--thus raising taxes--but implements a colossal energy tax that will impact every American household--regardless of income--and is estimated to drop an additional $3,168 annual bill on every family, on top of its existing energy costs. Remember, candidate Obama told us that under this energy plan, ``electricity rates would necessarily skyrocket.'' Why is this a good idea?

Economic historian John Steele Gordon draws this analogy to an energy tax in the recent issue of Commentary magazine: ``If passed it will act on the economy as a whole exactly the way a governor acts on a steam engine, increasingly resisting any increase in revolutions per minute. . . . The more the economy tries to speed up the more [this tax] will work to prevent it from doing so.''

Think about the incongruity between the growth predicted in President Obama's budget and the policies his budget would partially implement. This budget would saddle American taxpayers, businesses, and industry-- everyone--with a bevy of new tax increases and regulations that, once enacted, will unavoidably harm job creation and growth by making it more expensive for businesses to hire and by removing money from the private economy and transferring it to Washington.

How can our economy recover with the Government hampering job creation and growth?

Facts are stubborn things, as President Reagan used to say. We know that raising taxes in time of recession has never helped the economy grow. Why would this time be different?

I thank the chairman, and I ask unanimous consent to lay aside the pending amendment for the purpose of offering an amendment.

Mr. President, at this time, I call up amendment No. 793, relating to comparative effectiveness research.

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

Actually, Mr. President, the amendment is about as long as it took me to say that, but I will describe it nonetheless.

I hope this amendment will receive very strong bipartisan support because the entire essence of it is to ensure that nothing we have done so far here will allow health care in the United States to be rationed by the Federal Government. There is a reason for the concern, and I would like to discuss it.

First, of course, I would note that protecting the doctor-patient relationship and ensuring access to the highest quality medical care is fundamental to any health care reform effort. Comparative effectiveness research can be used to provide patients and doctors with information so that they may make informed health care decisions. For example, a study might compare a drug versus a surgery and determine that the drug is just as effective or even better at improving a patient's quality of life. But without appropriate safeguards, the Government may misuse comparative effectiveness research as a tool to ration or deny health care, and since private insurers tend to follow the Federal Government's lead, this has significant implications for all patients.

The American Recovery and Reinvestment Act of 2009--more commonly known as the stimulus bill--included $1.1 billion for comparative effectiveness research, and it created a national board called the Federal Coordinating Council to oversee that research. We all know the stimulus bill was written quickly and passed quickly and unfortunately, because of the phrasing there, we believe, could lead to unintended consequences. For example, nothing in the stimulus bill prevents the Government from using the $1.1 billion to compare the cost of health care treatments, even though the chairman of the Finance Committee tried to prevent that, nor would it prevent the Secretary of Health and Human Services from using the research to deny coverage of a health care treatment, or reject a one-size-fits-all approach to medicine, or protect advancements in genomics and personalized medicine, or require the Government to consider differences in patient treatment response or preferences, or account for the unique needs of health disparity populations--frequently minority populations.

Some may say: Oh, we will never ration health care in America. Well, don't take my word; take the word of our former colleague, Tom Daschle, who wrote a book. In his book, ``Critical: What We Can Do About the Health Care Crisis,'' he recommends that the United States follow the lead of other countries and use this cost-based research--the very research funded by the stimulus bill--to limit patients' access to care. And here is what he acknowledges in his book:

Doctors and patients might resent any encroachment on their

ability to choose certain treatments, even if they are

expensive or ineffective compared to alternatives.

Well, you are darned right they might resent it. Think about this a moment: Do you want Washington bureaucrats, such as those who brought you the AIG mess, making your health care decisions for you and your family? The answer, of course, is no, no rationing of health care.

Well, what is the real issue here? In February, the Wall Street Journal ran a story that chronicled patients' experiences with Canadian health care, which is a good comparison of what happens when government makes these kinds of decisions I am talking about. Let me share one of those stories:

In March 2005, Shona Holmes began losing her vision and

experiencing headaches, anxiety attacks, extreme fatigue, and

weight gain. An MRI showed that she had a brain tumor. The

government told her that she would need to wait months before

she could see a specialist about the brain tumor. By June,

her vision had deteriorated so severely that she traveled to

the Mayo Clinic in Arizona. The doctors told her that she

needed immediate surgery to prevent permanent vision loss and

potentially death. But the Canadian Government's solution was

more doctors' appointments, more tests, more waiting time.

Left with very few options, Ms. Holmes traveled back to

Arizona and paid for her surgery out of her own pocket and

had the necessary surgery.

In the British health care system, we have heard similar stories. They have an entity called NICE, which actually does the rationing, but it is not so nice. Take the word of the British Government Web site that describes the rationale for their rationing of health care:

With the rapid advancements in modern medicine, most people

accept that no publicly funded health care system can

possibly pay for every new medical treatment which becomes

available. The enormous costs involved mean that choices have

to be made. It makes sense to focus on treatments that

improve the quality and/or length of someone's life and,--

And I stress this part, Mr. President----

at the same time, are an effective use of NHS resources.

That is the national health care service resources. They go on:

Each drug is considered on a case-by-case basis. Generally,

however, if a treatment costs more than 20,000 to 30,000

pounds--

And that is an equivalent of 28,000 to 43,000 in U.S. dollars----

per quality adjusted life year, then it would not be

considered cost effective.

So in other words, the British Government, not physicians and patients, sets the rules and makes health care decisions. And the British formula, in U.S. dollars, is that an extra year of your life is estimated to be worth no more than $28,000 to $43,000. So if the treatment exceeds that, you are out of luck. The Government decides whether your treatment is an effective use of its resources and puts a price tag on what an extra year of your life is worth.

This budget lays the foundation for doing precisely the same thing in the United States. Our view and the public's view is that the Government should not make these decisions. Only patients, in consultation with their physicians, should make these kinds of health care decisions about their lives.

Those decisions should not be dictated by a formula based upon Government research.

I would also just add this point. Cost-based research applied this way can be very shortsighted. It leads to a one-size-fits-all approach to medicine that

standardizes care for diverse patients who may have the same medical condition, which is completely contradictory to the efforts of today's leading scientists. Scientists--for example those at TGen in my home State of Arizona--are exploring exciting advancements in genomics and personalized medicine; in other words, the right drug for the right patient at the right time.

Personalized medicine will offer an entirely new approach to medicine, including more accurate assessments of disease risk, better predictions of response to treatment, and safe, more effective treatments. This research will lead to better health care for all patients and long-term savings in the cost of health care.

Unfortunately, the stimulus bill was written in such a way that it does not incorporate targeting therapies, and it could stall innovation. I believe this is our opportunity to act to ensure that no Washington bureaucrat makes health care decisions for patients or undermines the sacred doctor-patient relationship. Already our own U.S. Government is taking steps toward this result.

Last Thursday, the acting National Institutes of Health Director announced that the NIH may use the stimulus money to compare the cost of health care treatments. In fact, NIH released a list of research topic areas, many of which include a cost component. One of the topics is entitled ``Integrating Cost-Effectiveness Analysis into Clinical Research.'' Here is how the description reads. This should be chilling.

[T]his initiative calls for the inclusion of rigorous cost-

effectiveness analysis in the design and testing of new and

innovative interventions. . . . Cost-effectiveness research

will provide accurate and objective information to guide

future policies that support the allocation of health

resources for the treatment of acute and chronic diseases.

The allocation of health resources is, of course, a euphemism for rationing. So this is not hypothetical. This is what our own Government proposes to do with this research. For some of the sickest patients suffering from chronic diseases, the Government wants to decide if their treatment is a good allocation of resources. It is clear that if Congress fails to protect patients, then comparative research will be used as a tool to ration care.

For this reason I have offered this pro-patient amendment that would send a clear message to the administration and clarify the Senate's intent regarding the stimulus funding. My amendment States two principles: No. 1, the Federal Government shall not use the data obtained from comparative effectiveness research to deny coverage of a health care treatment under a Federal health care program--very simple--and, No. 2, the Federal Government shall ensure that such research accounts for advancements in genomics and personalized medicine, the unique needs of health disparity populations, and differences in the treatment response and treatment preferences of patients.

We all agree with that. My amendment puts patients first. It is a nonpartisan issue. I do not know of anyone in this body who wants the Government to ration care or stifle innovation. I believe in the right of every American to choose the doctor, hospital, or health plan of their choice. No Washington bureaucrat should interfere with that right or substitute the Government's judgment for that of a physician.

I hope my colleagues will join me in standing for patients--all of us in America.

The chairman of the Finance Committee raised two points. I wish to make very clear that nothing in this amendment deals with the question of patient safety. For example, if FDA says a drug is not efficacious, then obviously you do not prescribe the drug. The doctor makes that decision. As the chairman said, it is the doctor's choice. That is precisely where we want to leave it.

The other question was, though: It is not necessary, it will just get in the way, nobody is intending to do that.

There are two responses to that. First of all, if nobody is intending to do it, then there is no problem in saying you cannot do it.

But, secondly, they are intending to do it. Here is a direct quotation from the Acting Director of the NIH less than 1 week ago.

Cost effectiveness research will provide accurate and objective information to guide future policies that support the allocation of health resources for the treatment of acute and chronic diseases.

That is the purpose of it. It is not merely to decide what works, which is the good side of cost-effectiveness research, but to allocate health care resources. Allocating health care resources is another way of saying rationing of health care. If we all agree we do not want that, and we do not think anybody is going to try to do it, then what is the harm in having an amendment that says we are not going to do it?

That would be included within this list we have, however, with or without the side by side?

Of course.

Madam President, my amendment prohibits Federal rationing of health care. A provision of the stimulus bill has raised a lot of concern. Madam President, $1.1 billion has been allocated for comparative effectiveness research.

Here is the exact effective language from my amendment:

The Secretary of Health and Human Services shall not use

data obtained from the conduct of comparative effectiveness

research to deny coverage of an item or service under a

Federal health care program.

That is all it does. Some say: Why do you need that? We are never going to do that.

Well, then, we might as well say we are not going to do that. But when it came to Medicare Part D, we wanted to be sure we did not withhold coverage of a prescription drug, and as a result we provided that kind of language.

Just last Thursday, the Acting Director of the NIH talked about research in terms of guiding future policies that support the allocation of health resources for the treatment of acute and chronic diseases. That is deciding what to cover and not cover.

My amendment does not prevent the Secretary from protecting patients from unsafe or ineffective drugs. It is simply about using this kind of research to ration health care.

I ask for the yeas and nays.

Mr. President, last fall, in a debate with my Arizona colleague, Senator McCain, President Obama decried the ``orgy of spending and enormous deficits'' that occurred under President Bush.

At a recent press conference, the President told us that America must shun the ``borrow and spend'' policies of the past and embrace plans to ``save and invest.'' I agree that we have to curtail Government spending now to protect future generations from historic debt.

So why, after denouncing deficit spending, is President Obama proposing to borrow and spend more than any President ever? His budget is not only the biggest in history; it also creates more debt than the combined debt under every President since George Washington.

Senator McCain told us during the campaign that spending and deficits are two sides of the same coin, that President Obama's spending promises would raise deficits to unsustainable levels; and that huge tax hikes--and not just for the wealthy--would be required to pay for it all.

Now, the President's own Office of Management and Budget Director Peter Orzag has confirmed what Senator McCain said all along, that: the budget will lead to ``rising debt-to-gross domestic product ratios in a manner that would ultimately not be sustainable.''

Let's consider some numbers to put that into perspective.

Last year we had a $459 billion deficit. The Congressional Budget Office now projects it will more than triple this year, to $1.669 trillion deficit. This budget will double the public debt in 5 years and triple it in 10. This budget does not contemplate one-time investments followed by years of reduced

spending. Instead, billions in new outlays will continue indefinitely. So it is not just about massive spending, but about the permanent accruement of power in Washington.

After bottoming out at $658 billion in 2012--a level still more than 40 percent above the highest deficit during the Bush administration-- the Congressional Budget Office projects the total debt to increase to $9.2 trillion in 2019, or 82.4 percent of GDP! The Washington Post recently editorialized, ``President Obama's budget plan would have the government spending more than 23 percent of gross domestic product throughout the second half of the this decade while collecting less than 19 percent in revenue.''

Is this the legacy we want to leave for the next generation? Unprecedented debt?

And let's not forget the finance charges. Beginning in 2012 and every year thereafter, the Government will spend more than $1 billion per day paying finance charges to holders of U.S. debt.

What does this mean for the average American family? Federal spending on finance charges for our Government's debt will be about $1,500 per household for 2009. Under President Obama's budget, this number would soar to nearly $5,700 per household by 2019. The interest on the national debt would be so big that it would be the largest single expenditure item in the budget by 2019.

Then there are the tax increases this budget contemplates. President Obama said he will cut taxes for 95 percent of Americans. But his budget would raise taxes by $1.4 trillion over 10 years. It not only lets some of the existing tax rates expire--thus raising taxes--but implements a new $646 billion energy tax that will impact every American household--regardless of income--and is estimated to increase energy costs for every family by $3,168 annually. And it's described as a ``down payment,'' meaning there is more to come.

What about President Obama's suggestion that this deficit spending constitutes ``investments'' for the future? Most of us would agree that short-term deficits are sometimes necessary to help finance future prosperity. As Stephen Moore writes in the latest Weekly Standard, ``The 1980s deficits were probably one of the highest-return investments in American history. We bought a victory over the Evil Empire in the Cold War and borrowed to finance reductions in tax rates that launched America's greatest period of wealth and prosperity: 1982- 2007.''

But much of the new spending in this year's budget is not what the IRS or a well-run business would classify as an investment. Most of it is earmarked for services whose long-term value is difficult to measure.

I'll quote Stephen Moore's article again: ``The debt we are now incurring is paying for windmills . . . new cars for federal employees, weatherizing homes, high-speed trains to nowhere, and the like. It buys almost nothing of long-term economic benefit.''

Senator McCain was right. President Obama has promised to spend so much that we are looking at record deficits and tax increases on everyone just to start paying for it all. We need to get a handle on this budget before it is too late.

Mr. President, I am appreciative and chagrined at the same time. I appreciate very much the courtesy. The only point I wished to briefly make--and I don't know whether it was made before with specificity--is that there is a reason why the debt and the deficits matter. It is because so much of it is held by other countries. Those other countries are becoming very concerned about the debt they hold in America.

We don't have an unlimited ability to continue to sell this debt to other countries. I just got these statistics. The Chinese specifically hold $727 billion or about 23.6 percent of all foreign holdings of U.S. debt. The Japanese hold $626 billion or 20 percent. Others are held by Persian Gulf countries. When they hold this debt, they both have a very large indirect stake in the kinds of policies we can pursue as a nation, and they also, obviously, would affect our future ability to borrow by their assessment of the quality of the debt and of the value of the dollar.

To this point, the Chinese Premier, in response to a question at a news conference, said:

We have lent huge amounts of money to the United States. Of

course we are concerned about the safety of our assets.

My only point is, it is not just a matter that there is more debt in this budget than the entire history of the United States combined-- there is a reason to be concerned about that debt beyond the fact that our kids and grandkids are going to have to pay it back--but today and tomorrow how that debt is viewed by the holders of the debt in other countries. Therefore, I think we ignore that at our peril.

I appreciate the willingness of the chairman to lend me a couple minutes to make that point.

Mr. President, first, let me say the job the chairman of the Budget Committee has is very difficult. I think I can speak for virtually everybody on our side of the aisle when I say there is a lot of respect for the way he has approached this job, especially this year. I, for one, appreciate the comments about the difficulty with the deficits and with the application of reconciliation. I think the chairman is exactly right. There are a lot of issues with reconciliation, and if it is to be used for the purpose as he identified it, if what Republicans did was wrong, then as lawyers say: a fortiori, this would be wrong, meaning it is even more the case because this would be policy that doesn't even relate specifically to taxes, except indirectly.

So I certainly hope the chairman can be successful in his efforts to remove or to ensure that reconciliation instructions are not included as a part of this budget. From my standpoint, primarily because that would effectively take Republicans out of the ball game in terms of helping to write new health care and environmental and energy and education policy, that should better be done on a bipartisan basis, or at least to the extent possible on a bipartisan basis. That would be very difficult to do if reconciliation got involved. So I appreciate his efforts in that regard.

I wish to begin by quoting a statement that President Obama made at a recent press conference:

The best way to bring our deficit down in the long run is .

. . with a budget that leads to economic growth by moving

from an era of borrow and spend to one where we save and

invest.

That is true. I think it is too bad that the President's budget doesn't meet the test he laid out. It borrows and spends more than any previous budget, and its new taxes will retard economic growth, especially at a time when the stock markets are unsteady, consumers are wary, and unemployment continues to rise, the President's budget should not propose unprecedented spending increases, huge tax increases on individuals, businesses, and families, and deficits as far as the eye can see.

This is not an era of new responsibility. Simply put, the budget spends too much, it taxes too much, and it borrows too much.

First, with regard to spending, we need to remember that middle-class families and small businesses are making sacrifices and tradeoffs in their own budgets every day. But not in Washington. The Federal Government continues to spend trillions of taxpayer dollars on bailouts and new Government programs. This $3.9 trillion budget continues business as usual, making no hard choices about how to rein in out-of- control Government spending. It also marks a nearly 20-percent growth in nondefense Federal spending since the end of 2008. This budget is so big that, according to the Heritage Foundation estimates, 250,000 new Federal bureaucrats may be required to spend it all.

Nor is there any intention of cutting back. This budget does not contemplate one-time investments followed by years of reduced spending. Instead, billions in new outlays will continue indefinitely. So it is not just about massive spending but about the permanent accruement of power in Washington. As the Wall Street Journal recently editorialized:

With [his] fiscal 2010 budget proposal, President Obama is

attempting not merely

to expand the role of the Federal Government, but to put it

in such a dominant position that its power can never be

rolled back.

Don't be fooled by the word ``investments.'' The lion's share of this new spending is not what a well-run business or IRS would count as an ``investment,'' such as equipment or other tangible assets. Most of the new spending would be for services where long-term value is difficult to measure.

Going to the item of taxes, President Obama said he will cut taxes for 95 percent of Americans. But his budget would raise taxes by $1.4 trillion over 10 years. It not only lets some of the existing tax cuts expire--thus raising taxes--but it implements a new $646 billion energy tax that will impact every American household, regardless of income, and is estimated to increase energy costs for every family by $3,168 annually. It is described as a ``downpayment,'' meaning there is more to come.

This tax is touted as a way to curb greenhouse gas emissions, but there is no way around the fact that it will be a tax on virtually all economic activity, since almost every aspect of our daily lives requires energy from fossil fuels. I recall candidate Obama telling the San Francisco Chronicle that ``under my plan of a cap and trade system, electricity rates would necessarily skyrocket.'' Is this what we need or want--especially in a time of recession?

It is also important to understand that existing expiring income tax relief for individuals is not a new tax cut. When an Arizona family thinks of a tax cut, it assumes it will pay less in taxes from one year to the next. The administration claims that if you don't pay more in taxes, you are receiving a tax cut. This difference, to borrow a phrase from Mark Twain, is like the difference between lightning and a lightning bug.

The budget also increases taxes on half of small businesses with 20 or more employees. So far, during this recession, small businesses have created all of the net new jobs. Why is this tax a good idea?

We are straying too far from the principle that the purpose of taxes is to pay for the costs of Government in a way that does the least damage to the economy. Hippocrates' oath for his medical students to ``first, do no harm'' should also apply to fiscal policy. This budget will not lead to economic recovery. What, in these times, could be more important?

Finally, as to borrowing, there is the deficit. Last year, the deficit was $459 billion. The Congressional Budget Office now projects a $1.669 trillion deficit in 2009. In 5 years, this budget will double the public debt. In 10 years, it will triple the public debt. After bottoming out at $658 billion in 2012--a level still more than 40 percent above the highest deficit during George W. Bush's Presidency-- the Congressional Budget Office projects the deficit to increase to $9.2 trillion in 2019, an astounding 82.4 percent of GDP. It also creates more debt than the combined debt under every President since George Washington. Think of that. That is not sustainable, as even the President's OMB Director, Peter Orszag, has said.

Let's not forget the finance charges. Beginning in 2012, and every year thereafter, the Government will spend more than $1 billion per day on finance charges to holders of U.S. debt. How will this impact the average American family? Federal spending on finance charges for our Government's debt will be about $1,500 per household for 2009. Under President Obama's budget, this number soars to nearly $5,700 per household by 2019. What happened to his plan to ``spend wisely''?

This excessive borrowing increases our dependence on creditors in countries such as China and Japan. These two countries now hold more than a third of our foreign debt. Other countries hold more than half of America's total publicly held debt. When other countries hold a large amount of our debt, they also have leverage to influence our currency, trade, and even our national security policies.

The final point I want to make relates to what I regard as class warfare. I am struck by the language of the budget, starting this class warfare in America. Page 5 of the budget reads:

While middle-class families have been playing by the rules,

living up to their responsibilities as neighbors and

citizens, those at the commanding heights of our economy have

not.

Is this true? Is it true that everyone in the upper brackets has not lived up to their responsibilities or played by the rules? Many of your family physicians, for example, fall into the category of top earners-- after years of training and mountains of debt from student loans and round-the-clock work hours, on call for you and me. Are they guilty of not living up to their responsibilities or playing by the rules? That is what the President's budget says.

Most high-income people work pretty hard. They contribute to the economy, give to charity, and pay a lot in taxes. The budget complains that the top 1 percent of earners now holds 22 percent of the Nation's income. But it fails to recognize that they also pay 40 percent of all Federal income taxes.

As Daniel Heninger recently wrote in the Wall Street Journal:

What is becoming clearer as [President Obama's] presidency

unfolds is that something deeper is underway here than merely

using higher taxes to fund his policy goals in health,

education, and energy . . . . The rancorous language used to

describe these taxpayers makes it clear that they will be

made to ``pay for'' the fact of their wealth--no matter how

many of them have worked honestly and honorably to produce

it. No Democratic President in 60 years has been this

explicit.

Republicans want to work with the President to get the economy back on track. But the massive amounts of spending, taxing, and borrowing in this budget will hinder an economic recovery. In times such as these, we have to focus on growing our economy, not growing the Government.