Floor Statements

Mr. President, I would say to my colleague from Massachusetts, I certainly think that would be a good way to engage in this debate. There are at least four speakers on our side who would like to engage in this discussion today, possibly one other. We could start, if it would be acceptable to you, and then the Democratic side respond and simply go back and forth in that way, with the time being divided equally.

Mr. President, it would be my intention not to take more than about 20 minutes. That would certainly then permit the kind of discussion the Senator is suggesting.

Mr. President, I think one of the reasons President Obama has not had an easy time getting Republicans to support his stabilization program is because he has misrepresented the Republican approach to this problem, and obviously that is of concern to us. In discussing with the American people his approach to the stimulus of our economy, he has first used some dangerous words, I would say, in describing the emergency nature of this.

A lot of people have said he is trying to scare the American people. I don't think that is true. I think what he is trying to do is demonstrate the seriousness of the situation. But I also believe it is not an excuse for acting in an inappropriate way, to say we have to do something right now, and if we don't, there is going to be catastrophe in the land; therefore, suggesting we need to be less careful about what we do. We believe the President's initial conversations are appropriate and that we need to be careful about how we approach this problem, among other things, because of what could occur over the long term.

He has also mistakenly represented the point of view of Republicans in two specific ways: First of all, suggesting the only reason Republicans oppose this program is because we just believe in tax relief. Of course, we believe in tax relief, but we do not believe that is the only solution to this problem. In fact, we understand there has to be a component that helps people in need, such as the extension of unemployment benefits. We understand that certain kinds of spending can be very effective at a time such as this.

Senator McCain specifically noted some military spending. Because of the way the military operates, they can get the money out the door quickly, and that can be very beneficial. We also focused, first, on housing because that is where this problem began, and that is why our effort to fix housing first was presented on the Senate floor. Our Democratic colleagues rejected that notion. Of course, we also demonstrated why some tax relief can also be beneficial. But we have never said that only tax relief will work.

Our Democratic colleagues like to point out a very high percentage of their bill is tax relief, apparently agreeing with us that tax relief is important. But the two biggest pieces of tax relief in the Democratic bill are, first of all, the rebate program, such as the rebate program last year. Last year, it was $600; this year, it is $500 for 2 years. It was not effective last year, and there is nothing to go suggest it is going to be any more effective this year to stimulate the economy.

The other part that is discussed is the alternative minimum tax relief--so-called AMT. Now, we have been relieving Americans from having to pay the AMT for a decade and not as part of a stimulus bill but because it is the right thing to do. No one ever intended that Americans below the millionaire status would ever be paying the alternative minimum tax. So we have been fixing that each year so Americans would not have to worry about it. It doesn't do to count that as part of the tax relief and suggest it is because of a stimulus intention.

The other thing the President has spoken of that bothers Republicans is talking about the ``tired ideologies'' that got us into this problem in the first place. Now, if you are going to try to get some bipartisan support from Republicans, I submit that is not the way to do it. I would like to know exactly what tired ideologies the President is talking about. What exactly?

Now, in his inaugural speech, I think the President hit a couple of home runs. He talked about ``reaffirming the greatness of our Nation.'' He said:

It has been the risk-takers, the doers, the makers of

things . . . who have carried us up the long, rugged path

toward prosperity and freedom.

He talked about requiring a new ``era of responsibility,'' and emphasized the values of honesty and hard work.

Now, those are values that are very important to Republicans. We believe that, for example, we should have a Tax Code and Government regulatory policy that at least does not punish those who are risk- takers and doers, who have exercised responsibility and who have helped to make this Nation what it is, including many of the people who work hard and who run the businesses that create the bulk of the jobs in this country. So what exactly is it the President is talking about when he talks about the tired ideologies of the past and responsibility?

There is much talk in this bill of all the aid to the States. Now, the States have doubled their spending in the last 5 years, and most acknowledge they need to get their fiscal houses in order, but many of them are simply looking forward to being bailed out by this bill. So I ask: Is that the kind of responsibility we want to foster or should we expect more of the States so they can do their part in dealing with this crisis?

Does the President believe the tax cuts of 2003 created the recession? Obviously, no one believes that. Not only were they not responsible for the recession we are in, but they are accredited with the job growth and economic stimulus this country received during the middle part of this last decade.

Does the President believe President Bush's efforts to control Fannie Mae and Freddie Mac's risky investments and toxic loans caused the pickle we are in right now? Obviously not. Indeed, all the evidence is, it was the President's cohorts in the Congress who stopped the efforts to control Fannie and Freddie and, as a result, this great housing bubble was created and burst, to the detriment of everybody in the country.

Would the President suggest the Reinvestment Act might have had something to do with it? There is a failed policy of the past, essentially making the banks lend money to people who actually couldn't afford it. In the long run, they suffered as much as everyone else because they couldn't carry the mortgages on the homes they were put in. We did not do them a favor, and we didn't do their neighbors a favor, who are now sitting next to a home that is in foreclosure.

It seems to me the President is rather casually throwing out some careless language, and if we would be a little more precise and try to get together as

Republicans and Democrats to identify the problem and work together on it, we would get a lot further.

Let me ask this question. If the question were put to the Senate today: If you knew that a bill in the Senate was going to cause a recession in 10 years, would you support it? Well, that is what the Congressional Budget Office--the bipartisan office that supports our efforts in the Congress--says about this legislation; that there will be negative economic growth--negative GDP--in a decade as a result of this legislation.

According to the CBO report, dated February 4, sent to Judd Gregg, the ranking member of the Committee on the Budget, they say:

CBO estimates that by 2019 the Senate legislation would

reduce GDP by 0.1 percent to 0.3 percent.

Now, that is 10 years from now. That means if this went on for at least two quarters, that is the definition of a recession. They note in the very beginning that the effects of the legislation would diminish rapidly after 2010 and that in the long term, GDP will be reduced.

If you have a bill before you that you are told by the experts is going to result in a recession, would you maybe want to stop and think twice about what you are doing? There is evidence that this is kind of a sugar high. We put a lot of spending out now, but once the high is gone and you crash, you are going to be in a recession. That, in effect, is what is stated here. Just as we do not let our kids have too much candy, I think we need to be a little careful about legislation which we are told is going to result in a recession.

It is not just the CBO. In December 2008, the National Bureau of Economic Research published a document titled ``What are the Effects of Fiscal Policy Shocks?'' by Andrew Mountford of the University of London and Harald Uhlig. I am quoting:

The best fiscal policy to stimulate the economy is a

deficit-financed tax cut [and] the long-term costs of fiscal

expansion through government spending are probably greater

than the short-term gains.

In other words, in effect confirming what the CBO has said.

They explain why:

[That's because] government spending shocks crowd out both

residential and non-residential investment--

By the way, the CBO report I cited does talk about the increase in the national debt crowding out private investment with the same negative effect--

while the [positive] response of consumption is small and

only significantly different from zero on impact.

But suppose these recent studies were mistaken, I suggest, and the spending spree would even work as advertised. We are still left with the number of jobs allegedly to be created at a very significant cost, well over a quarter million dollars per job.

The bottom line here is that doing something temporary which is going to cost a lot of money and result in long-term economic downturn is not the kind of policies we should be pursuing.

One of the concerns Republicans have had is that it is not only the amount of money that is being spent in this bill--and it is a shocker. It is over $1 trillion. And incidentally, the deal that was reached yesterday still has us spending something like $1.17 trillion, so this is still a very big spending bill.

By the way, the President acknowledged it is a spending bill. He said that is the whole point. One of the problems with that is that you cannot fix it by simply shaving a little bit off of some of the elements of spending, as this deal apparently does. You have to start fundamentally at the bottom.

Actually, Larry Summers, who is the chief economic adviser of the President, had it right when he says this of legislation: ``The investments,'' he says, ``will be chosen strategically based on what yields the highest rate of return for the economy.'' That is the way it should be done, built from the bottom up based only on what actually does the most good rather than simply throwing a lot of spending at the problem and hoping that some of it sticks or actually trickles down and actually helps the American people. This legislation, the so-called deal here, doesn't build it from the bottom up. It takes the base bill and just shaves some off different pieces of it.

I would note that we do not have text of the legislation yet, so we are dealing with a couple of different press releases, which, by the way, don't identify who put them out, and they are slightly different with respect to what they say. So when we are discussing this deal, we still do not know what it is. This is Saturday. We are supposed to vote on this on Monday. Obviously, we are not going to be here tomorrow. Is this a way to legislate over $1 trillion of spending that is going to be a burden on our children and grandchildren? I think not. I think the authors of this legislation owe us a little more consideration in getting the facts to us about what the bill actually does.

As I said, the two big tax pieces are the AMT relief--which we have done routinely each year, not as part of a stimulus but because it is the right thing to do--and the rebate part, which we know did not work last time, and there is no reason to believe it is going to work this time. There is only about 2.5 percent of the tax part of the bill which actually goes to business tax relief, potentially enabling businesses to create jobs--for example, allowing them to write off purchases of equipment earlier than they otherwise would, therefore incentivizing them to hire people and thereby, obviously, creating jobs. That is the tax part of this.

On the spending side, we are told that there are certain reductions in certain of the accounts. But, as we look through it, many of the things that were criticized before appear to still be there. If you take what was added on the Senate floor to the deal that was struck, you are at about $827 billion, which is still above the level of the House bill which was criticized strongly by proponents of the deal last evening on the floor. They called the House bill a Christmas tree. Yet this bill in its total amount is above the level of the House bill. There may have been a 4.7-percent reduction from the level of spending in the House bill, but it obviously doesn't change it from being a Christmas tree. It has not been fundamentally altered from the bottom up with an effort to invest in things that actually will stimulate jobs. It simply shaved off some of the excess spending in the bill.

For example, as we understand it, in the building account, the Federal building account for Federal buildings, the Senate bill had a $6 billion amount. Under this deal that was made, it is $2.5 billion. So some money was shaved off there. The NOAA facilities construction went down from $795 million to $645 million, a $150 million savings. That is great, but the fundamental problem is that this is not going to create jobs--that remains. Federal auto fleet--they cut that in half, the cars for Government workers, from $600 million to $300 million. The DC sewer system remained unchanged. They didn't actually cut, that I see.

The bottom line, as my colleague from Maine described on the floor, these are the kinds of things that should go through the regular appropriations process where they should compete with other worthy causes, going through the appropriations process and the appropriators make the tough decisions.

My colleague, who is a member on the committee, had a couple of things to say in describing the appropriations process. He pointed out that we have the responsibility to be deliberate and consider these items carefully in the context of the President's formal budget request. Why? Because there are so many worthy things to spend money on that it is our job to make the tough decisions about which ones to put at the top of the list and which ones, perhaps, to defer or to reduce. That is the job these people on the Appropriations Committee do, and they do it well. They have to stick with the President's budget.

What is in this bill is new spending without any kind of tax receipts to cover it or offset spending to make up for it. It is emergency legislation, just added to the debt.

As the ranking member of the Appropriations Committee wisely pointed out, the kinds of projects that are in this bill should go through the appropriations process. It is great that they have been reduced somewhat in number, but that does not solve the fundamental problem.

Let me close here so we can actually engage in this debate. We still do not know whether a lot of the earmarks are in the legislation. My staff has

tried to look. It appears, because they have not specifically been taken out, that several of the items, some of the items I mentioned-- the money for Amtrak, the $1 billion for the census, the new money for the Smithsonian, digital television transmission bailout, the authorization for benefits for Filipino veterans of World War II--all of those things and much more are still in here. Obviously, we will be interested to see whether the final version of the bill, when we actually get it, corrects these deficiencies, but it doesn't appear that they have.

Again, what Republicans are suggesting here is that it is really a four-part process: help those who are in need; target the spending, which will actually create jobs; fix housing first; and provide targeted tax relief that will actually also help to stimulate the economy. That is the Republican approach. I think we have some better ideas that could have been incorporated into this legislation if it had not been such a partisan exercise.

Mr. President, I appreciate the opportunity to engage with my colleague from Massachusetts. I will make five quick points, and then either Senator Sessions will follow me or, if a Member on the other side wishes to speak in between, he will then follow that individual. First let me clear up two things.

The Senator from Massachusetts talked about deficits and, in effect, blamed the Bush administration. I would note the facts which are that last year, under a Democratic-controlled Congress, the deficit doubled from what it was when Republicans were in control, and it is going to double again this year under Democratic control of Congress.

Let me try to make my points. I don't want to take less time from my colleagues.

Secondly, I acknowledge that the Senator from Massachusetts did raise the issue of housing at the White House. The point I wanted to make was not that Democrats and Republicans weren't both concerned, that Democrats didn't have some good ideas. Simply, it is not fair to characterize the Republican position as wanting to deal with tax relief only, that Republicans believe housing needs to be a part of this. In fact, we would prefer to fix housing first rather than, as the Senator from Massachusetts said, we are going to do housing later.

Incidentally, the bill to supposedly fix housing passed last June with both Democratic and Republican support. It was obviously not enough.

Third, the Senator from Massachusetts talked about debt and said, what is the alternative to borrowing, either raise taxes or cut spending. That is true. But he said you can't do either in a recession. Actually, that is not true. As I quoted before, the National Bureau of Economic Research said this about that precise point:

The best fiscal policy to stimulate the economy is a

deficit-financed tax cut. The long-term costs of fiscal

expansion through government spending are probably greater

than the short-term gains. As between the two, some spending

can help. But long-term, it costs more if you have deficit

spending, and it provides for relief if you have tax cuts

financed through deficit.

The fourth point: My colleague from Massachusetts disagreed that this legislation will result in a recession and noted that the CBO report said there would be short-term stimulus. That is exactly right. But what I said is also true. On page 5:

Including the effects of both crowding out of private

investment, which would reduce output in the long run, and

possibly productive government investment, which could

increase output, CBO estimates that by 2019, the Senate

legislation would reduce GDP by between one-tenth and three-

tenths of a percent.

As I noted, the definition of a recession is when you have two consecutive quarters of negative GDP.

Finally--and this is probably the most instructive point of all-- there is a clear difference between the parties. But I think it is interesting when my colleague from Massachusetts described as one of the failed ideologies of the past the notion that individual empowerment will do any good, when he ridiculed the idea of letting people keep more of their own money. You have a very stark contrast between what some Democrats believe and what most Republicans believe. Republicans do believe that Americans are better off being allowed to keep more of their money. Why? Because they will make wiser decisions about what their family needs than will some bureaucrat in Washington. I don't mean bureaucrat in a pejorative way. I am a government employee. I didn't get any smarter when I came back to Washington. When I go back to Phoenix or Tucson, I see people struggling to take care of their families, and they are making very important and wise decisions about how to deal with their family budgets. It is true, if they get a tax rebate, they are more likely to save it or pay off credit card debt than to spend it. That is why that kind of tax relief, a rebate, the quick fix that is in this bill, doesn't work. Why? Because Americans make wise decisions with their own money. They know they have to deleverage their own personal budgets, as businesses know they have to deleverage all of their debt.

Let me conclude my remarks.

Republicans believe that individuals are better off in making decisions about their financial future than allowing the government to do it for them. That is why we say, as Michael Steele said, let people keep more of their own money and not have people in Washington decide what is best for them in how they want to spend it.

I am happy to conclude and let Senators respond on their own time.

Mr. President, I have finished what I have to say. My colleague Senator Sessions asked if I would respond to Senator Kerry, because he responded directly to me. He will follow next. There is no rule that says a Senator can't speak twice. Other Senators will rotate in time. I think that is the appropriate way to engage in the debate.

Mr. President, at the conclusion of my remarks, I am going to ask unanimous consent to print in the Record some recent op-eds. I would like to quote from some of them because they reflect the emerging consensus of experts around the country as to what this so-called stimulus package is all about and what the results of it will be.

A couple of these I wish to talk about because they are from unlikely sources in the political spectrum. One might assume, for example, that the Washington Post would be very supportive of moving forward with a so-called stimulus bill. But this morning in the Washington Post, there is a pretty significant question raised and a concern raised about whether the bill should move forward as it is.

I am advised that because of the division of the time, rather than 15 minutes remaining, the Republicans have only 1 minute. That probably means I have about 30 seconds. What I will do, if we do extend the time as the manager indicated after noon, I will conclude my remarks at that time, or if the Senator has some time now.

Mr. President, I appreciate the Democratic whip getting that cleared for everybody's sake and also for permitting me to continue to speak. I appreciate it.

This Washington Post editorial quotes the President, first of all, contending that the opponents of this bill are peddling the same failed theories that helped lead us into this crisis.

I am one who is very skeptical about this bill. I am not quite sure what the President is accusing me of. What we asked is that a program be built from the bottom up that would be targeted at helping people who are in need, that would be targeted at helping to create jobs in a quick way, that will actually quickly create jobs that could stimulate the economy and that will not put a burden on future budgets and on future taxpayers by creating new permanent programs and mandatory spending that takes a long time to spend out.

The Post then goes on to criticize the attempt of the President to pin on all

of the opponents some ideological objection. As it notes:

. . . Ideology is not the only reason that senators--from

both parties--are balking at the president's plan. As it

emerged from the House, it suffered from a confusion of

objectives.

Here is the point I wish to emphasize. When the President talked not merely of a prescription for short-term spending but a strategy for long-term economic growth, here is what the Post says:

This is precisely the problem. As credible experts,

including some Democrats, have pointed out, much of this

``long-term'' spending either won't stimulate the economy

now, is of questionable merit, or both. Even potentially

meritorious items, such as $2.1 billion for Head Start, or

billions more to computerize medical records, do not belong

in this legislation, whose reason for being is to give U.S.

economic growth a ``jolt,'' as Mr. Obama himself has put it.

All other priorities should pass through the normal budget

process, which involves hearings, debate and--crucially--

competition with other programs.

I think that is right. That is one of the things Republicans have been saying. Some of the spending in the bill may be perfectly meritorious, but since this is emergency spending, it does not have to be accounted for in either reduced spending elsewhere or new tax receipts. It is simply added onto the budget deficit.

What the Post and what we and others have been saying is that spending with long-term consequences is nothing more than the kinds of items we pass every year in the appropriations process, and it should be subjected to that process.

The so-called stimulus bill should be reserved for those items that stimulate quickly. We have all heard the phrase ``timely, targeted, and temporary.'' Part of the problem with the bill is that because it creates new mandatory spending and it creates new permanent programs, it is not temporary. In the discretionary account, more than half the money does not even begin to be spent until the year 2011. I know all of us hope by 2011 we are out of this recession.

I think the Post's criticism is very valid. I urge my colleagues to look at this a slightly different way. Rather than spending on programs that seem like a good idea and may have long-term, positive consequences, let's remove those items from this bill and focus strictly on the items that would actually stimulate the economy.

There is a second op-ed piece that was written in my hometown newspaper, the Arizona Republic, on February 6, by Bob Robb, a columnist there who is very erudite and a good economist. He criticizes both Democratic and Republican ideas. He is an equal opportunity criticizer. We all benefit from that critique of his from time to time. Here is what he says about the Democratic proposal:

The Democratic stimulus proposals are based upon a false

premise and a deceit.

The false premise is that all Americans are construction

workers.

The Democrats propose that the federal government build new

stuff for virtually everyone.

The Congressional Budget Office has already noted the

constraints that exist on government's ability to get

hundreds of billions of dollars of construction money out the

door quickly. But even that ignores the constraint from those

who would need to do the work.

Residential construction is, of course, in a deep slump.

Commercial construction not so much. And residential

construction workers are not easily redeployed to do

commercial and heavy construction. The skill sets are

different.

The deceit is that all this spending requires suspending

ordinary budget constraints to jumpstart the economy. Most of

the spending is actually in pursuit of long-term Democratic

economic growth strategies.

Democrats believe that the economy will perform better

long-term with significant additional government investments

in alternative energy sources, education, health care and

social welfare programs.

And we have heard that during this debate.

He goes on to conclude:

Democrats won the election and certainly have the right to

try to advance their long-term strategies. But there is

nothing about fighting the recession that justifies exempting

these long-term strategies from the most basic of budget

considerations: How are you going to pay for them?

Even without the stimulus package, the federal government

has already reached post-World War II records for spending

and the deficit as percent of GDP.

The primary economic effect of the Democrat's stimulus

proposals will be to inflate private sector commercial

construction costs and give the country an even more severe

fiscal headache.

That leads into the third op-ed by George Melloan in today's Wall Street Journal that I will have printed in the Record. He is a respected commentator and economist in these matters. I am not going to quote very much of his op-ed. The title of it is: ``Why `Stimulus' Will Mean Inflation.''

He concludes, as did Bob Robb, that will be the result of all of this spending which is declared emergency but is not distinguishable from most of the spending that we do in the ordinary appropriations process. But his concern is that as we inflate the currency of our country, it will be more and more difficult to get people to buy our debt, and the net result could be increasingly costly debt financing.

As he notes, too, the credit for the rest of the economy will become more dear as well and entitlements will go up instead of being brought under control under this legislation. He predicts this will require the Fed to create more dollars, and the end result will be severe inflation in our economy.

That is borne out by the fact that even though the legislation purports to end some of the mandatory spending programs after 2 years, the cost of 10 years for these programs that will supposedly expire is well over $1.3 trillion. I don't think very many of us believe that after 2 years we are going to stop this mandatory spending. My colleague, John McCain, offered a proposal. In fact, there were two. The Senator from South Dakota, Mr. Thune, offered another one. The idea was, once we are out of the recession, once we have had two quarters of economic growth, then surely that is the time to stop all this so- called stimulus spending. That is, in effect, what the proposal said. It was rejected by our Democratic colleagues. The reason is very clear: They don't intend to stop. They intend to continue it, and that is another $1.3 trillion that is not even factored into the cost of this $1 trillion-plus bill.

Take the $1 trillion deficit we have now, $1.3 trillion on the bill before us, another $1.3 trillion, and as Everett Dirksen said on this floor a long time ago, pretty soon you are talking big money. We are talking trillions of dollars, and we should not be in that position today.

Recently, the President spoke to some of our Democratic colleagues. He said the Republicans criticize this bill as a spending bill. I am paraphrasing. He said: Of course, it is a spending bill; that is the whole point. I understand what he was getting at. Many believe Government spending can stimulate economic growth, and I suspect in certain ways that can be done. A lot of us believe those benefits are limited and that there are better ways to stimulate economic growth. But that is the Keynesian theory.

When the President says: Of course, that is a spending bill, that is the whole point; he is acknowledging what we have been saying on this floor for a week now, which is that this is a spending bill.

He would say: But it also stimulates. What I said yesterday was that is kind of a trickle-down theory. The Government spends $1 trillion, throws it against the wall, and hopes some of it trickles down to actual families who need the support so they can then get their own budgets in balance and, hopefully, have something left over to spend. That is where ideas, such as those in the alternative proposed by my colleague, Senator McCain, come into play because they actually help families in a way that could also have a way of stimulating economic growth. That is what this package should be all about.

I will summarize it this way. This bill spends far too much money for far too long a period of time without any requirement that it be offset in any way by reductions in spending or tax receipts, which is the normal appropriations process and will inevitably result in inflation which robs every American and, in particular, retired Americans who have to rely on their savings.

We have to consider the long-term consequences, and I hope the better Republican ideas that have been, so far, pretty much rejected by our colleagues

on the Democratic side can be brought to the floor as amendments and will be supported so there can be broader support for this legislation. If it is adopted on virtually a party-line basis, that is not going to be good for the country, and the end result will not stimulate the economy.

Mr. President, I ask unanimous consent to have printed in the Record three items. The first is an editorial in the Washington Post, February 5, called ``The Senate Balks.'' The second is a column in the Arizona Republic, dated February 6, ``Bad Stimulus Ideas All Around.'' The third is a Wall Street Journal, February 6, George Melloan column, ``Why `Stimulus' Will Mean Inflation.''

Mr. President, again, I thank the manager of the bill and my colleague Senator Durbin for allowing me to give these remarks.

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Thank you, Mr. President.

Mr. President, first, everyone understands we need to act to help people who are hurting in this country, to try to create jobs and stimulate the economy. That is not the issue. The question is whether the deal that has been struck here this afternoon is a solution to the problem or whether it is still a wasteful and ineffective bill.

I wish to comment briefly on five quick things. First of all, it is a little hard to tell because we do not have text yet, but my staff has just reconfirmed the numbers, that as compared with the House-passed bill--which was described here this evening as a very bad bill--this bill would create a deficit of $827 billion; the House bill, $820 billion. So it is $7 billion more in deficit spending than the House bill.

My colleague from Maine described this as a targeted approach because, of course, much of the spending they have tried to remove from the bill is ordinarily handled through the regular appropriations process. They wanted that spending to be handled in the regular order through the Appropriations Committee, and therefore they are going to target things that should not be handled through that process. Then I heard described items like Pell grants. Now, we have a lot of Pell grants, a lot of students who have benefited from Pell grants. They have all benefited from Pell grants because the Appropriations Committee has appropriated money for Pell grants, and we voted for that here in the Senate. There has never been a stimulus bill to pass Pell grants before. So if this is a targeted approach and we are going to have $6 billion in there for Pell grants, there seems to be a contradiction.

It was also indicated that this deal is better than the House bill because this will really stimulate the economy as opposed to the approach in the House bill. Then there was described items such as $6 billion for special education. Well, once again, everybody is in favor of special education, but how does special education--$6 billion-- stimulate the economy? I suppose you could say: Well, it at least enables us to hire more special education teachers. How long does it take to educate a special education teacher? About 4 or 5 years in college? Hopefully, we are out of the recession by then.

There was a description of $87 billion in ``targeted increases'' in Medicaid. Well, it appears to be the very same amount of money that came out of the Finance Committee--$87 billion for Medicaid. The CBO has said that of this $87 billion, only $10.8 billion is targeted for Medicaid. The rest is, in effect, free cash for the States. This is not a targeted approach at all.

Moreover, the committee--and I will see when we understand how this bill is actually written--provides a 27-month cliff. In other words, in order not to look as if it is spending too much money, it assumes that after 27 months everybody will just be removed from the rolls. Well, I defy my colleagues in this body, after a lot of people have been added to the Medicaid rolls, after 27 months to just inform them they are going to have to be removed because we did not provide the funding for it. Obviously, the program is going to be continued and the cost to the American taxpayer will be much greater.

Finally, just to comment about working together, we all try to work together, and it is true that the American people want us to work together. But they do not want us to work together to waste a lot of their money. So the question still remains: Is the deal that was struck today a better deal in terms of wasting the public's money and being effective at stimulating economic growth? Certainly, the case was not made in 45 minutes on the floor this evening.

I will be looking forward to the debate here after we have had a chance to read the bill, to understand why the proponents really think this will be better, and we will be willing to debate that. In the meantime, I remain convinced that we do need a targeted--a really targeted--approach and that it needs to be aimed toward stimulating the economy and creating jobs, just not spending more money.

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. President, I object simply for this reason: Can we go in the order we agreed to? People are confused when we bounce around. If we can go in the order on the list, then I don't think we will be confused.

Mr. President, am I correct that the Vitter amendment No. 107 is the next amendment?

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. President, if the Chair would please notify me when I have spoken 4 minutes, I will be, in fact, that brief.

The Senator from Illinois quoted the Gipper, Ronald Reagan. That always gets Republicans' ears perked up. When he said: I am always happy to take 80 percent; I don't need 100 percent--Republicans would be happy to take 80 percent. We would be happy to take 50 percent. In fact, probably most of us would be happy to take 30 percent. But so far, virtually every Republican amendment has been defeated.

So when there is talk about the President ushering in an era of good feeling by having us down to the White House and talking to us and listening to us, that is great. We have all commented on our appreciation for the President's efforts. At some point, however, since Republicans do have some good ideas, that has to be translated into some of our ideas being a part of this bill.

I think the American people agree with us. A Gallup poll, a week ago, said 38 percent of the people would pass the bill; 54 percent would either reject it or require major changes in the bill. We are reflecting the mood of the Republic.

According to a Rasmussen survey, a poll from February 4: Support for the stimulus has fallen now to 37 percent; 43 percent oppose. Two weeks ago, 45 percent supported it. Last week, 42 percent supported it. Now it is down to 37 percent, and 43 percent oppose it.

So that is the reason Republicans are standing before this body asking that--because the American people want major changes in it, because a majority now oppose it--we should not have to take 100 percent or even 98 percent of the bill and then be accused of partisanship.

Republicans have good ideas, and one of them is the amendment pending by my colleague from Arizona. Without going through all of the elements, since I am very limited in my time, let me just note one of the most important.

The Democratic Speaker of the House has said over and over, this bill needs to be timely, targeted, and temporary. The Senator from Arizona is focusing on temporary. What he says, very briefly, is, when the economy begins to recover, then all of this spending that otherwise would be permanent should cease. So the amendment he has pending would require that once we have had two consecutive quarters of economic growth greater than 2 percent of inflation-adjusted GDP, then all of the stimulus spending would cease and the unobligated funds would return to the taxpayer. At that point, then we would need to reduce spending to accommodate the huge cost of this legislation.

Now, that is a real test of where we are in this legislation. Is this a question of getting all of this spending we wanted for the last 8 years and we are going to spend out the majority of that spending after the year 2011 or is this truly a stimulus bill that is targeted at getting the economy moving again, and once that happens, then the spending for the future under this legislation ceases?

There are 34 new programs in this bill, new Government programs. There is $180 billion-plus on mandatory--in other words, permanent-- spending. That is not temporary. One of the things Senator McCain's amendment stresses is, let's focus on the temporary. Once we begin recovering, then stop spending all of this stimulus money.

Mr. President, there is a reason Republicans want an opportunity to have our amendments debated and, hopefully, accepted, and that is because the American people have told us they want this legislation fixed. That is why I support the amendment of my colleague from Arizona, which will go a long way toward that end.

Mr. President, reserving the right to object, I would propose to modify the unanimous consent agreement by noting that the time between now and 4:30 be equally divided.

Madam President, I remind my colleagues to support the McCain amendment on which I spoke earlier. I also rise to say a word about the Thune amendment which deserves our support. According to the economic models developed by the President's economic advisers, this proposal would create twice as many jobs for half the cost, about 6.2 million new jobs for $480 billion, as opposed to the alleged 3 to 4 million jobs for $888 billion under the Democratic proposal. One of the best parts is a 7-percentage-point rate cut for small businesses done exactly the way we did for corporations under the FSC/ETI bill. This would apply to businesses with fewer than 500 employees, precisely the kind of businesses that create jobs.

Finally, it contains a provision that expresses our policy that the United States should not increase its marginal income tax rates while the unemployment rate is above the level of 2008, and taxes should not be increased to pay for the impact this stimulus will have on the deficit which we know is large. That is precisely what caused the second half of the Great Depression and slowed down the economic recovery in Japan.

I urge colleagues to support the McCain amendment and the Thune amendment.

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. President, I wish to respond to Senator Baucus.

First, I think the staff on the majority and minority side are attempting to put together a tranche right now of perhaps six--four amendments, two on both sides?

Well, I will complete my thought. They are trying to put together a list of at least four amendments that would be equally divided.

And what I suggest is that we proceed on this basis and not try to interject the TAA process, because I think that will cause this to grind to a halt here. We can discuss, as I told you, the appropriate proceeding on TAA. I am certainly not trying to tie proceeding to TAA to a date certain to vote on Colombia, but I do think it is appropriate that a plan be worked out, with the President, as you have noted, and the Members of Congress who are concerned about this to try to find a way to go forward, as we originally did, so everyone can be assured that both Trade Adjustment Assistance and the Colombia Free Trade Agreement can proceed to a successful conclusion.

Now is not the time to negotiate that, and that is why I object to the idea of going forward with this at this time. In order to keep this process moving forward tonight, and get as many of the Democratic and Republican amendments up and voted on, I suggest we keep proceeding as we have been, in good faith, and not confuse it with this extraneous issue.

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. President, if I may respond to the Senator from Tennessee, I appreciate his focusing laser-like on this subject because, in many respects, we are treating the symptoms of the problem rather than the cause of the problem. While treating the symptoms can have some salutary effect, we are not going to ultimately solve the problem until we get to the root cause. I think virtually everybody agrees on what the root cause of our current problem is: the collapse in the housing market.

That caused a cascade of other effects, and some of those can be dealt with simultaneously, but the bottom line is, as the Senator from Tennessee noted, we have to fix housing first. Because until that is done, all of these other symptoms are going to remain.

There are a lot of smart people whose comments I am going to quote in a moment because they are well-respected--they are Democrats, they are Republicans--but I would like to turn, first, to my folks in Arizona, whom I like to go to for advice. So last weekend I met with Marge Lindsey and her group of realtors from Arizona. I started out by saying: All right, tell me how it is. She said: It is not good. They went on to point out that between 40 and 50 percent of what they are doing right now is dealing with foreclosed homes, or what they call the short sales--getting ready for foreclosure--and that the rest

of the market has virtually collapsed. She said something has to be done to prevent the continual decline in housing values.

My home is in a perfectly good neighborhood, I pay my mortgage and all, but it is out of my control because all around me others are having problems first, and because they are having problems, it is drawing down the value all around. So the people who play by the rules and are not doing anything wrong are along for the ride down. Until that is arrested somehow, all of these other symptoms are going to exist. That was their analysis.

Now, if I can quote some other really smart people, if the Senator would allow me? The New York Times editorialized toward the end of last year, November 11:

Clearly, the [financial] system won't stabilize until house

prices stabilize, and banks won't lend freely until losses on

mortgages abate. . . .All roads, into and out of this crisis,

run through the housing market.

Exactly the point the Senator from Tennessee is making.

Very recently, January 28, the new CBO Director, Director Elmendorf, said this in testimony:

Turmoil in the housing and financial markets is likely to

continue for some time, even with vigorous policy actions and

especially without them. Most economists think that to

generate a strong economic recovery in the next few years,

further actions to restore the health of the housing sector

and the financial system are needed.

A lot of folks rely on the advice of Warren Buffett. I probably should have relied more on the advice of Warren Buffett in my investments. I wouldn't be where I am today. Here is what he said in April of last year:

Things connected with housing, whether it's in brick or

whether it's in carpet, those businesses have shown no uptick

at all.

His point is that once housing is affected, everything else that has anything to do with it is affected.

He made this comment as well:

The market won't really come back until you get a close to

normal ratio of vacant homes, homes up for sale, compared to

current sales, and that's a ways off.

We all listened with interest to Alan Greenspan. Here is what he testified to in October of last year before Congress:

A necessary condition for this crisis to end is a

stabilization of home prices in the United States.

Here is how I conclude all of this. The experts back home agree. They are seeing it on the ground. The experts who look at this from an economic standpoint, from a national macroeconomic standpoint, all agree. We need to heed their advice and address the housing crisis first. We cannot wave a magic wand and stop housing prices from falling further. Would that we could--we would do that. That is the market, and we cannot stop it.

What is happening is that home values, in a ratio to mortgages, are declining. So the other point the realtors told me was a lot of folks, through no fault of their own, are now paying mortgages on homes that exceed the value of the homes. That is the upside-down element. We can affect that part of the equation. That is to say, we can't stop home values from going down until we do something else first. The thing we can affect is that ratio--what people are paying in their monthly mortgage payments. I am going to leave that to my colleagues. The Senator from Nevada is here. The Senator from Georgia is here. They will talk about a better Republican idea of how we can address the costs people pay every month in their mortgages as a way of making them more healthy, able to pay the mortgage, not going to foreclosure, and ultimately fix that value of homes, and then we are on the road to recovery.

The last thing I wanted to say is that the secondary market is a big part of this. When people lend money, they want to then be able to sell that mortgage to somebody. That has been the whole cause of this, the toxic loans in the secondary market.

In the Financial Times of August 26 of last year, Dr. Martin Feldstein said:

Mortgage-backed securities cannot be valued with any

confidence until there is more certainty about the future of

house prices.

That is precisely what this better Republican idea will get to. As my colleagues discuss these ideas of how to relate to this, remember what the original cause of the problem is, what we can affect and we cannot affect, and how we want to focus laser-like on fixing housing first.

I appreciate the efforts of my colleagues.

Mr. President, I ask unanimous consent that an editorial in the February 4 edition of the Arizona Republic be printed in the Record at the conclusion of my remarks.

I will refer to that editorial, because it sets the stage for what we need to do to fix this bill. The Gallup poll yesterday said that 56 percent of Americans believe that either this bill should not be passed or that it should require major changes before it is passed. That is not only what most American people believe but also what most of the people on the Republican side of the aisle believe and I know some Members on the other side as well.

This editorial is titled ``Senators should just start over in fixing fiscal mess.''

They say:

Far too much of the stimulus bill is simply unserious as

``economic stimulus.'' The Senate would do us all a great

favor if it started again from scratch.

In a different part they write:

When the Congressional Budget Office analyzed the stimulus

bill in its original configuration, it found that just 25

percent of its content might have any effect on the economy

this year.

A similar analysis by the Wall Street Journal concluded

that just 12 cents of every dollar spent would have a chance

to create immediate stimulus.

They conclude:

Make the measure look like a stimulus package rather than a

pork package.

That is what most of us believe we should do. You build the bill from the bottom up. What actually stimulates the economy, what actually creates jobs, you put that in the program. There may be a place for extending unemployment benefits, though that probably should be in a separate bill, because it is clearly not stimulative even though it helps people who are hurting. I doubt that there would be any objection to doing it. But we ought to focus the stimulus on exactly that; Otherwise the American people are going to be cynical when they look at a bill that is $1.3 trillion in size, and the experts are saying a very small percentage of that actually does anything to create jobs or stimulate the economy.

Let's go back to last December. In the Washington Post, Lawrence Summers, head of the President's National Economic Council, said:

Investments will be chosen strategically based on what

yields the highest rate of return for the economy.

The Congressional Budget Office, the CBO, projects that in fiscal year 2009, the deficit is going to total $1.2 trillion, and that doesn't include any of this stimulus bill which is about $1.3 trillion. Add those two together, we are talking about $2.5 trillion. So we need to take Lawrence Summers' advice and only spend money that will yield the highest rate of return for the economy. If we do that in building this bill from the bottom, we can actually do something that is great for the American people and still not be wasting taxpayer money. It might take 2 or 3 more days, but this is the most important economic bill this Congress will have considered in decades. It is the biggest bill in the history of the United States. We spent yesterday, Tuesday, on it, today, tomorrow, probably Friday, perhaps Saturday. We spent 5 weeks on an energy bill a couple years ago. Surely on a bill of this magnitude and with the emergency facing the country, if it takes us 3 or 4 more days to do it right, we ought to do it right. That means constructed from the bottom up with things we know will stimulate the economy and create jobs, not just fulfill campaign promises, not just make good on 8 years of things we wanted to spend money on but have not been able to find any other bill to stick it in until we got to this bill. Let's try to do this in a bipartisan way that will achieve the objective.

The President himself, on Super Bowl Sunday, in a nationally televised interview on NBC, said:

There will be no earmarks in the bill.

He said he is going to be trimming out things that are not relevant to putting people back to work right now. My guess is he is fairly embarrassed with a lot of the earmarks that are in the bill. Most of my Democratic colleagues are meeting now. I hope they are talking about what can be eliminated from this bill, what kind of earmarks or wasteful spending can be eliminated from the bill. It has become an embarrassment. We would be very happy to have them join in some of our amendments which will eliminate that spending.

Senator Conrad, chairman of the Budget Committee, knows what he is talking about in these matters. He told Fox News:

There are other areas of the package that are really very

questionable in terms of whether they would stimulate the

economy. Some of the programs that are given money only have

10 percent spend out in the next two years.

He is correct on that. On the same day Senator Dorgan also commented to Fox News that ``major chunks of the package do not spend out for years which is problematic.''

We all agree. We ought to start over and start by eliminating these programs. If we do that, then we can meet an objective which is far higher than either 12 percent or 25 percent in terms of the money we spend that will actually provide new jobs.

The Congressional Budget Office, nonpartisan, says only 12 percent of the discretionary spending in the bill will be spent by the end of this year and that less than half of the total of the discretionary money will be spent by the end of the following year. So more than half of the bill starts spending in the year 2011. I hope the recession is over by 2011. If it is not, obviously, we can look at that time to see whether we need more stimulus. But having stimulus for 2 years, that is a pretty long time to be stimulating. Let's adopt the McCain idea that after 2 years we take a pause and see what else we might need to do. We could probably save a lot of money. We would make wiser decisions, and we would be stimulating in the short term which is what we want to do.

The President's Chief of Staff said last year: You never want to waste a crisis. He was referring to the use of a crisis such as this to accomplish certain good. He was talking about reform ideas and so on. But we have to be careful that others aren't using this as an excuse to put spending in a bill that has been pent up for 8 years, that some of our colleagues wish to have done but haven't found a vehicle to carry it and, thus, stick it in this bill. That is what the American people are so upset about.

If we will solve this problem, the American people will be a lot more generous in their support for the other things we want to do. I have talked about some examples. I don't want to go through a laundry list. A lot of this is oriented to Washington, DC: $9 billion for a Federal buildings fund; more money to help the auto companies, $600 million to buy more cars for Government employees; $248 million for USDA facilities modernization; $34 million to spruce up the Commerce Department headquarters; $125 million for the DC sewer system. All of these may well be important things to do. You can't argue that they are directly stimulative, though some people will have to do the work associated with them. But we have no idea whether these things are ready to go, whether they can be done in the first 2 years, or whether these are things that actually will be spent, as will the majority of the money, in the 2 years after 2010.

In any event, we have a process, as Senator Cochran, the ranking member on the Appropriations Committee, has said, that enables us to vet all of this spending and prioritize it so we put the most helpful spending first, and those things that are not as justified then fall out of the spending for this year and maybe come back next year. But it is our way of determining what we really want to do as a country that, obviously, cannot just have everything we want, and we cannot pay for simply everything. So, as Senator Cochran said, we have the responsibility to be deliberate and consider these items

carefully in the context of the President's formal budget request. It is a matter of making tough decisions, and I would hope we could do that.

Now, let's assume--because I am sure our Democratic colleagues will agree to eliminate some of these wasteful programs--we still have the problem that if the money is not reduced, then the money is still in the bill to be spent by somebody somewhere. So it is not just a matter of taking earmarks out, but it is a matter of eliminating the funding categories those earmarks are in, or as soon as we authorize the money, it will come right back in and we will have the same projects.

In this regard, I am very troubled by programs that would fund directly States and local governments because we have seen the lists they have sent to us--their wish list of things they would like to get. If we simply strike the exact delineation of where they want some of this money to go but leave the pot of money there, I ask you, where is it going to be spent? It will not take 5 minutes for them to get that list back out, put it on the table, and start going to town.

Just some general categories here:

There is $16 billion to repair and build schools. That has always been a local school function. It is not a Federal function.

There is $5.5 billion for a brandnew discretionary program on transportation.

There is $2.25 billion for a neighborhood stabilization program. That is the same kind of program that would have made funding available for groups such as ACORN that we took out of the housing bill in June of last year. I do not think people want this kind of money going to ACORN or groups like that.

There is $500 million to upgrade fire stations. I know all our local fire departments would love to have money to upgrade their fire stations. Is that a Federal responsibility?

There is $9 billion to the National Telecommunications and Information Administration for grants to provide access to broadband.

There are huge chunks that would go to local projects specifically delineated by the Conference of Mayors. On January 17, they issued their fourth update of a report that details much of the spending they would like to accomplish. It is a stunning list of porkbarrel projects involving swimming pools, water slides, corporate jet hangars, skateboard parks, dog parks, equestrian trails, golf courses, parking garages, museums, bike paths, and so on. Some of those things might be perfectly appropriate; all of them should be local responsibilities. If people in the community want something like that badly enough, they will find a way to get the money to support it.

Just to illustrate the degree to which this prospect of free money has motivated people to what I regard as silliness--again, some of these projects may be perfectly appropriate; if they are, local governments will find a way to fund them--there is $8.4 million--a lot of money--for a polar bear exhibit in Providence, RI. There is $6.1 million for corporate jet hangars in Fayetteville, AK. There is--a small amount of money--$100,000 to create one cop job in Sulfur Creek, CA. I do not know what kind of community Sulfur Creek is, but surely California could come up with $100,000 to get a police officer on the force for that community, I would think. There is a lot of money here for California. There is money to rehabilitate a skateboard park in Alameda, CA; $500,000 for Sunset View Dog Park in Chula Vista, CA. There is money for an equestrian park in San Juan, Puerto Rico, and so on.

The bottom line is, these things ought to be subjected to the usual appropriations process. I guarantee you, the appropriators are pretty careful when they go through these items. Yes, some of this stuff slips in, but they try to prioritize these projects, and it is not just a giveaway to local communities.

I think it is worthwhile noting what some of the money is specifically spent for in categories. Golf courses seem to be a big item. Golf courses. There are several million dollars for golf course renovations and construction in Shreveport, LA; Brockton, MA; Roseville, MN; Florissant, MO; St. Louis, MO; Lincoln, NE. There is an environmentally friendly golf course in Dayton, OH. That one might win the approval of the appropriators. There is the renovation of a golf course maintenance building in Kauai County, HI.

Not to leave out my own State--there are a lot of museums that are apparently in need of some renovation or construction here--there is one in Scottsdale, $35 million for a museum of the West. I guarantee you that will be a great museum, but I would hope we could help the folks in Arizona generate the money for this museum. There are museums in Miami, FL; Meridian, MS; a Minor League Baseball museum in Durham, NC; a museum of contemporary science--there are several museums of contemporary science; that must be a new trend--in Trenton, NJ. There is a music museum in Puerto Rico; a music hall of fame in Florissant,

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

I ask for the yeas and nays.

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. Voinovich).

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. Voinovich).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the senator from New Hampshire (Mr. Gregg).

Mr. President, I am not going to be laying down an amendment at this time but, rather, speaking generally about the legislation while another amendment is being prepared. I wanted to share some data that we became aware of today, a new Gallup poll, which confirms what some of us thought, which is the more the American people see about this stimulus bill, the angrier they are getting and the more they believe it is both wasteful and ineffective. It is interesting that only 38 percent of the American people support this bill as written, while 54 percent say it needs major changes or should be scrapped entirely. In other words, 54 percent of the American people are in agreement that this bill should not move forward as it is, that it needs major changes. That is what Republicans are proposing with the better ideas that we want to present during this debate.

It is interesting as well that Independents, who were queried by even greater numbers, believe the bill either needs major changes or should be rejected outright. Fifty-six percent of Independents concur with that. Most Americans said they think the stimulus package either will not have any effect on their personal lives or will have a negative effect on their personal lives. A mere 12 percent said it would make their lives a lot better. That is the point that many of us have been making. People need something that will make their lives better. They are hurting all over this country. It is a shame, when we have an opportunity to do something about it, to waste a trillion dollars that we do not have and that our children and grandchildren are going to have to pay back for something that will not achieve its objectives.

What I would like to do is speak to some of the problems with the bill that we believe will not work, will not stimulate the economy, will not create jobs, and some of the areas that are simply wasteful Washington spending.

We have heard of some of these items. Again, many of these items the bill spends money on have an argument for them. But it is our view they should go to the Appropriations Committee, and they should present these programs to compete with all of the other programs which may also have degrees of worthiness. When the Appropriations Committee says: Here is the top line of the budget for each of our Government departments, then compete within that line for the program you want to spend your money on. If you are worthy enough, then you will get funded. If you are not, you won't. This bill simply takes all comers and says: Let's put it in a so-called stimulus bill, whether it has any stimulative effect or not. I will give a couple examples.

More cars for government employees; this is another bailout for the auto industry. We are going to do trail maintenance for ATVs. Maybe that is a good idea. But that should probably compete in the budget that ordinarily it would be funded from. I know one of my colleagues is very strongly committed to the idea that we should provide some funding for Filipino veterans of World War II who assisted our troops. That may be a very worthy objective, but nobody can argue it belongs in this bill. Those are folks in the Philippines. It is not going to create American jobs or stimulate the American economy. We could go on and on with other examples. The point is, this is more wasteful Washington spending.

American taxpayers are not against paying taxes, not against having the Government spend money if necessary, but they don't want us to waste the money. When we have a crisis on our hands, when they need help, to have us then just take the 8 years' worth of things we would love to do and haven't been able to get approval for yet and tuck them into this bill as spending and call it stimulus is bad policy.

Abraham Lincoln had a great saying: If you call a tail a leg, how many legs does a dog have? Of course, the answer is four. Calling it a leg doesn't make it a leg. That is the point. Calling these things stimulus doesn't make them stimulus. They should not be in this bill.

There are other things that suggest the bill would not work. We have had experience with this before. The centerpiece of the tax item in the bill is a tax rebate. Never mind that 26 percent of the people who receive this tax rebate don't pay Federal income taxes. The problem is, the same kind of tax rebate in the amount of $600 last year did very little to stimulate the economy, even though that is why it was done. All economists agree that somewhere between 10 and 20 percent of the money got spent, and the rest of it was plowed into savings. The reality is, that is a good thing because Americans' personal budgets are overleveraged just as our businesses are. People have far too much debt on their credit cards, for example. They need to be getting that debt paid down and begin saving a little more. So it is no wonder they would take these tax rebates and put them in the bank or pay off a credit card rather than going out and spending. That is a good thing for them personally, and it is what we have to have happen for the recession to finally end.

But in terms of stimulating spending, it is not a good thing. It obviously does not stimulate spending. Martin Feldstein, who actually testified before the Finance Committee in favor of the last stimulus, has now written that, of course, the experts who predicted it would not work were correct, it did not work. He is now very much of the view that we should not repeat that mistake in trying to stimulate the economy. The problem is, we are talking about well over $100 billion which, therefore, will not achieve the purpose of stimulation.

So these are why, when the American people see money being spent on things that have no business in this bill--it is more wasteful Washington spending--when they see huge amounts of money going toward an effort to create jobs that would not do that, they scratch their heads and say: Why are these politicians in Washington wasting an opportunity to help us? Why don't they really get to something that will help us?

There are things that can help. Republicans have some better ideas about how to craft this legislation so it will actually achieve the objective we want. The bottom line is, rather than spending $1.3 trillion on this bill, we should

be providing tax incentives that will create jobs. We should use the Tax Code to encourage beneficial behavior to encourage people to work and save and invest and create jobs. That leads me to the next subject.

Our colleagues on the other side of the aisle like to say that a significant percentage, maybe 36 percent, of this bill is taxes. Again, what is tax relief? I don't think you can call tax relief rebates when they are scored by the joint legislative committee as spending. So we have a difference of opinion. Even if only a quarter of it is tax policy, what kind of tax policy is that? Mr. President, 2.3 percent of the amount of the total bill is spent on tax incentives for businesses so they can write off their equipment purchases and so on that might conceivably enable them to hire more people. That is inadequate. One of our better ideas is to enhance those current provisions, expand them so that more businesses will be able to hire more people and produce more and thus help us to get out of the recession.

There are a variety of ideas that will be presented as amendments. One of them is an idea that some of our House colleagues have: by simply reducing by 7 percentage points the tax that small businesses pay, we believe significant new jobs will be created because small businesses create the jobs. Big businesses are trying to hold their own right now, but they are losing jobs, and they have not been the job creators. It is the small businesses that have historically created jobs. We believe that reducing their tax liability just by this modest 7 points--talking about businesses with 500 or fewer employees--you will have thousands and thousands of employers who will be able to buy the new equipment, be able to market their product or in some way be incented to hire additional people. That is how we create more jobs.

We think we ought to focus on where this problem started and where a significant part of the problem remains, and that is in housing. In fact, housing values are continuing to decline. We know the collapse in the housing market is what started all of this. But there is nothing that goes to the heart of that problem which remains.

In Arizona, we continue to see housing values decline. I talked to realtors and others last weekend. In some cases, over 50 percent of what they are doing is foreclosures and short sales in anticipation of foreclosure. So the market is in very bad shape. One of the Republican ideas--in fact, we have a couple of different approaches--is trying to provide a floor so housing values don't decline any more, so that people are incented to either refinance their existing mortgage or to be able to afford a new mortgage, and at the same time that this would help individuals put more money in their pockets. Because of the savings they would achieve with a lower interest rate mortgage over 30 years, it would also help to clear up the problem we have all heard about in the secondary market, the so-called toxic assets backed by mortgage-backed securities, the value of which nobody apparently can figure out.

If most of the people would refinance their existing mortgages at a lower rate, say, 4.2 percent, all of the holders of those mortgages would be paid off. They would all have cash. They could either reloan it or they could prop up their balance sheets. All of this would be very helpful, and we would then know exactly what is left.

What is left are the toxic mortgages, and there are other programs that will be dealing with that. I believe the President's Treasury Secretary, Secretary Geithner, is poised to talk about that next week. There are other plans the FDIC and others have. Certainly, the TARP funding that has been voted on is supposed to help go to those toxic assets, the people who are allegedly underwater; that is to say, the value of their home is less than the amount they owe on their mortgage.

It is really a two-part problem. The Republican ideas are designed to get at that problem, the problem that caused this whole collapse in the first place. Most experts believe it has to be solved before we can genuinely begin to work our way out.

There is another problem with the bill; that is, there is bad policy in this bill. For example, on the infrastructure, we have Davis-Bacon requirements. This adds to the cost of all of these projects. I remember a few years ago in the little town of Sierra Vista in southeast Arizona there was a facility to help women with dependent children or families that needed aid. If they had built the structure to do this, they couldn't afford it because of the additional cost that Davis-Bacon imposes on wages to construct a building. So they bought a mobile home instead, and because they were buying a mobile home, it wasn't a construction cost. They saved thousands of dollars on the facility.

Was it best to have a mobile home for this facility? No, it wasn't. They should have had an actual building. That is the problem with this particular policy. I forget the amount of money that it cost, but it is significant.

On health policy, there is the comparative effectiveness research which, in an op-ed in the Washington Post last Friday, George Will commented would dramatically advance Government control and rationing of health care. This is not good policy.

There is the neighborhood stabilization plan, $2.25 billion. This is the same kind of funding that could go to entities like ACORN, which we stopped when we dealt with this last June in the housing legislation. But it is tucked into this legislation, it is a lot of money, it is bad policy, and it ought to be taken out.

The Washington Post, last Friday, editorialized about the education expenditures here. They said: Ordinarily, we would support more money to support education, but this is a wasted opportunity to reform education so that we can actually use this new money to better benefit. Otherwise, we are simply throwing more money at the problem. Part of the quotation from the Washington post was we ``will be wasting more than money.'' What they meant was the opportunity. There is an opportunity here to really do some good, and rather than just throw more money at a problem, why don't we take advantage of the opportunity to really do something to reform it?

This gets me back to the point with regard to how these bills should compete in the appropriations process. We have a process--it is well established in the House and in the Senate--to deal with competing appropriations. They go over these bills very carefully. Ordinarily, they have to make some tough choices, to say: This program will go into the bill, and this one, unfortunately, is going to have to wait for another year or it is going to have to be reformed before we are going to spend the money. That regular-order process is what we should be using in this case.

This bill creates something like 34 new Government programs. Now, those two are the kinds of things that are scrubbed carefully in the regular appropriations process. Ronald Reagan once said: The closest thing to immortality in Washington is a new Government program. Once created, it is awfully hard to get rid of.

Of course, there is a lot more mandatory spending in the bill, spending that allegedly exists for only 2 years, but actually we know there is no way after 2 years Congress is going to come back and cut. In fact, going back to the so-called make work pay credit--this $500- per-taxpayer rebate--most of the experts agree this temporary tax rebate is not going to change behavior and stimulate spending.

So what is the answer? Well, of course--wink, wink, nod, nod--it is really going to be permanent. Now, nobody wants to put that on paper because the score, the cost, would be astronomical. This body would be embarrassed to pass it, and it would not pass it. But once it is in there for 2 years, do we think we are going to eliminate it? No. In fact, the authors of it justify it, saying: Well, it actually will work because it is not really going to be temporary. We are really going to make it permanent. That is what we have to be very careful of in this legislation--committing ourselves to hundreds of billions of new expenditures, ostensibly temporary--some not even ostensibly temporary; they are actually identified as mandatory spending for the next 10 years--but many of them ostensibly temporary but will, in fact, be a permanent program.

One of the reasons I believe the program will not work is because less than half of all the discretionary funding is spent by the year 2011. Now, I hope by

the year 2011 this recession is over. But you cannot call it a stimulus when more than half of the discretionary spending does not even begin to be spent until the year 2011.

So another one of the Republican ideas, that of my colleague, John McCain, is to say: Look, you have to spend this within this period of time. If you do not, then that authority lapses, and we are not going to spend that money. I think that is a very sensible way to look at it.

Just one other comment on the tax title. We talk about the extension of these energy tax credits. Apparently, windmills did not get enough in the way of tax credits, so we are going to extend their tax credit for another 3 years. You can argue whether that is good policy, but you cannot very well argue that extending it beyond 1 year is immediate spending. By definition, you are talking about the second and third year.

On this point, Dr. Christina Romer, who is President Obama's head of the Council of Economic Advisors, and, by the way, at last count, about 320 other economists, including some Nobel laureates, has made the point that tax cuts are far more effective in this environment than is additional Government spending. To this, I just have to say, this appears to be a new concept here in trickle-down economics, where the Government will spend close to a trillion dollars--just get it out there--and hopefully some of it will trickle down to regular people. That is not the best way to help people who are hurting in this economy.

So we have talked about things that will not work in the bill. We have talked about excess spending in the bill. We have talked about things that are not going to really stimulate the economy or create more jobs. In fact, the cost of the jobs, if you just take the cost of the bill and the number of jobs created, according to estimates of the sponsors of the bill, for each Government job created, it is $646,000. That is a lot of money to create a job; in the private sector, $242,000. This is not an efficient, effective program, and I do not believe we can afford a $1.3 trillion mistake, especially since we are playing with the money our children and grandchildren are going to have to pay back.

Let's eliminate the wasteful spending, and let's deal with the things that have to be dealt with first, such as the housing crisis, and create tax policy that will make sense long into the future and will actually help businesses create more jobs to help the people of our country today.

The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

The following Senator is necessarily absent: the Senator from Florida (Mr. Martinez).

Mr. President, I wish to speak in favor of the Bunning amendment, which I hope we will be able to vote on a little while later this afternoon.

It is a very simple amendment that sets the maximum amount for eligibility under the SCHIP program at 300 percent of poverty. In other words, we set the poverty level in this country three times that amount that would be the qualifying level for a family to qualify their kids under the SCHIP program. That is a lot more than what was originally intended when the SCHIP program was put in effect, but it is a level that represents the maximum for all but two States in the country.

Most States are somewhere around 200 percent of poverty. My State of Arizona is exactly at 200 percent of poverty. The State of the chairman of the committee, who is from Montana, is now at 175 percent, although I understand there is legislation that will take that up to 250 percent. So with the States bunched around primarily the 200 percent of poverty level, some now at the 300 percent, that represents a good compromise on where the limit should be set, and we need to set the limit for a variety of reasons I will go into in a moment.

Let me tell you what the implications of the amendment would be. There are only two States that would have to cut back under the program. In fact, they would not have to actually cut back in the coverage of children, they would simply follow the same rules as everyone else, and their reimbursement would be at the Medicaid rate rather than the higher SCHIP rate for these higher income kids. So they could still cover them; they just don't get quite as much reimbursement from the Federal Government in order to do it.

Now, there would be some savings as a result of these two States not having Federal funding at the SCHIP level, and that additional savings, under the Bunning amendment, could be put into outreach and enrollment grants to help find eligible, uninsured, low-income children. The reason for that is, the whole point of the program is low-income children. Yet there are millions of low-income children who are not enrolled in the program. We have to find them, we have to get them enrolled. That will cost some money. So the savings that are achieved in this amendment would go toward that end.

The third and basic point here is that the Bunning amendment ensures we keep our promise to preserve the SCHIP coverage for low-income children and ensure parity amongst the States. If we have a limit of 300 percent, not all of the States would want to go to 300 percent but they would know they could do that. If they wished to keep it below 300 percent, they would be paying less. They would be receiving less from the Federal Government, but it would be uniform for everyone.

As I said, I think Senator Bunning is wise to set it at this level, even though that means the average family of four has $66,000 in income. That is hardly low income or poverty level. But $66,000 of income would cover families who clearly could use the help. It is obviously very generous. It is clearly way above poverty, so I do not think Senator Bunning goes very far in limiting this to 300 percent of poverty. These numbers translate to 200 percent of poverty is $44,000 income per year. Of the two States that are above the 300 percent, one is New Jersey at 350 percent. That translates into $77,175 a year. The other is New York at $88,200 per year.

We can all have some disagreements in this body, but nobody can argue that $88,000-plus in income is a poor family, is a poverty or low- income family. That is not what this program was designed to cover.

Add to that, you can add in $40,000 for expenses for transportation and clothing and housing and so on, and you can actually get above $120,000 in income and qualify for this low-income program for kids. That is not right.

One thing I know that folks in Arizona, folks in New Mexico, folks in Montana all say when they look to Washington is: We know we need to pay income taxes, we know we need to spend money on things, but stop wasteful Washington spending. I think sometimes they may view our spending as more wasteful than it is, but the reality is there is a lot of wasteful spending here. This is a lot of spending beyond what was the original intent of the legislation.

When I talk in Arizona about low-income kids, people nod their heads and say, yes, we need to help low-income families with kids. If I said to them so that means $120,000 a year--most of the families in Arizona don't make $120,000 a year, let alone calling that low income. It is not. If only for truth in advertising purposes, we should support the Bunning amendment and, again, he sets the level at 300 percent of poverty or $66,000. In one sense you would have a tough time defending that as a low-income program. But that is where he set it. At least nobody can contend that he is trying to be too cheap here. Mr. President, $66,000 a year for a family of four to qualify for a low- income poverty program I think is quite generous.

I think I indicated I would answer a couple of questions here about why we need to do this. One argument for the folks in New Jersey is we have a higher cost of living in those States. Of course it is not twice as high. It does not cost twice as much to buy a car in New York or New Jersey or Arizona, so that argument only goes so far--and it is about ``this'' far.

Second, what these States have done is cover more kids at higher income levels because it is easier. Think about it. You expand the program to cover a lot of high-income kids. You can find those kids. It is the very low income we are having the trouble finding. Those are the ones who need to get registered in this program, but they are hard to find. They are in our Indian reservations, in our inner cities, and maybe some out in farm country in Montana or wherever. That is who we should be focused on here.

It is easy to say let's raise this up to families making $88,000 a year. Sure, you can find those kids. But the fact you are then enrolling more kids in the SCHIP program doesn't mean you are getting the ones who need the care the most.

There is another problem with that. The Congressional Budget Office notes that with these higher income family kids, there is a one-to-one ratio from adding a child onto SCHIP and losing health insurance coverage in the private sector. For every one child who is added on, a child loses health insurance coverage from an employer. The ratio generally is between 25 and 50 percent, but at the higher income level it reaches a one-to-one ratio. This is the crowdout effect we were talking about before. It doesn't do us any good to add somebody to the Government-run program if the only effect of that is to cause them to lose their insurance policy from their family's employer. You

have not helped anybody in that case. All you have done is transferred the expense from the employer to the taxpayer.

In the case of these high-cost States such as New York and New Jersey, the people of New Mexico or Arizona or Montana, for example, are paying twice as much for those kids as they are for the kids in their own State.

We are sending money from Arizona to New York. Arizona has it at 200 percent of poverty, or a $44,000 income level. New York has twice that, $88,000. The net effect of that is Arizonans are simply sending money to New York to take care of the New York kids. That is not fair. That was not what this program was originally designed to do. What Senator Bunning has done is say let's cap it, not at some low level but the relatively high level of 300 percent of poverty, $66,000 a year. If they want to cover kids higher than that, they can, but they are reimbursed at the somewhat lower Medicaid rate than the SCHIP rate, and he takes the savings from that and helps us fund the kids who need the coverage, the low-income kids.

I cannot for the life of me see why any of us, except perhaps the four Senators from New Jersey and New York, would not support this amendment. The only two States that would suffer at all under this amendment are those two States because they have chosen to go far above what the other States provide in terms of coverage. They can still cover the kids, as I said, they just don't get quite as much money from taxpayers in other States to do that.

Why wouldn't those of us from the other States support the Bunning amendment? It is going to be very hard for some people to go home to their constituents when those folks say, Why didn't you support the Bunning amendment? Why should I have to pay money for somebody making $88,000 in New York State to cover these higher income kids when that probably means that their employer takes the obligation he has and moves it over to the taxpayers? This is not very logical.

The Bunning amendment is a modest attempt to get the program back to its original intent, slightly less expensive, to generate some funds to get the low-income kids in, and have more equity among the States.

I cannot think of an amendment that would more reasonably try to deal with all these problems, and I do urge my colleagues, for a moment here, let's put partisanship aside. The President has urged us to do that. We don't have to have just partisan votes on all of these amendments--all the Democrats vote no, all the Republicans vote aye. That doesn't get us anywhere. I hope my colleagues on the other side of the aisle will put on their independent thinking hats. If they need to say something to the leadership or whatever--look, this is a reasonable amendment, I am going to support it--then do that. We do not have to be in lockstep here. It may be that there is a Republican amendment that deserves to be supported. This is one.

I urge my colleagues, let's approach this independently. This is a good amendment. Let's support it. I hope my colleagues will consider doing that when we vote on the Bunning amendment a bit later on this afternoon.

Madam President, if I can take 4 minutes, that will be fine.

Madam President, yesterday I spoke to this issue and detailed the reasons the underlying legislation is not a good bill and why the substitute that is being offered by Senator McConnell will be a much better approach to this issue. I want to reiterate one of these points because of a question a reporter asked me out in the hall. We talked about the massive number of people, 2.4 million people, who will leave their private insurance coverage in order to participate in this Government-run program. It is called the crowdout effect.

The reporter said: Does it appear to you that this is just one more step toward Government-run health care for Americans?

I said: Well, you can certainly conclude that. The reason I said it was because there were efforts last year to try to fix this problem. Everybody acknowledges there are almost 2.4 million people who will leave private health insurance coverage because, obviously, the businesses that are paying for that today would not have to pay for it if their employees go to this Government-run program. It, obviously, makes sense for them, therefore, to drop the coverage.

The reason I said what I did is because there is a way to handle this. We tried to deal with it last year. When the legislation was finally--the final version was written, it was written by the chairman of the committee and by other Democratic leaders in the House and in the Senate.

It was approved by both Houses. It included the language that dealt with this crowdout effect. Now, it was not very meaningful language, from my perspective, but at least it was a recognition of the problem. Surprisingly, that language was dropped from this bill, and I never have been able to figure out why.

So I offered an amendment in the committee to reinsert the same language that the chairman and other Democratic leaders had put together to deal with this problem. On essentially a party-line vote, my amendment was defeated, so the problem remains. And it is the one of many problems in the underlying bill.

The point of the Kids First Act, which is Senator McConnell's alternative, is that it is targeted and it is a responsible reauthorization to preserve health care coverage for millions of low- income children. That is what the program is all about. That is what we should be doing.

Unlike the underlying bill, the McConnell amendment adds 3.1 million new children to SCHIP. It minimizes the reduction in private coverage, as I said before, by targeting SCHIP funds to low-income children and not high-income families who have access to private coverage. And importantly, it is offset without new tax increases or a budget gimmick as is the underlying bill.

So I think my colleagues and I have two choices here, either a budget buster that does not protect SCHIP coverage for low-income children, represents an open-ended burden on taxpayers, and takes a significant step toward Government-run health care, or a fiscally responsible SCHIP reauthorization that preserves coverage for low-income children and is fully offset without a tax increase, and minimizes the effect on employer-sponsored health coverage.

The answer is clear, the Kids First Act is the right solution, and I urge my colleagues to vote yes on the McConnell amendment.

The PRESIDING OFFICER (Mrs. Hagan.) The Senator from Montana is recognized.

The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

Madam President, I ask unanimous consent that the pending business be laid aside for the purpose of my offering amendment No. 46.

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

Mr. President, this amendment deals with a problem we have discussed before, the so-called problem of crowdout. This problem was dealt with in the amendment by my colleague Senator McConnell. But the Senate did not see fit to adopt that amendment, so I have now offered the amendment to specify that as to this one specific problem, hopefully, we can get together and resolve it.

First of all, what is ``crowdout''?

Put simply, the more individuals you enroll in a Federal health program such as SCHIP, the more you crowd out or displace from employer-sanctioned or sponsored coverage. In other words, the more opportunity there is for the Government program, fewer employers will offer insurance to their employees.

The Congressional Budget Office actually did a study of this in May of 2007, and here are some of the things they said: For every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children. So that is between 25 and 50 percent will leave private insurance to come to

I am happy to yield.

Mr. President, well, that is exactly the point of my amendment. The bill the Senator from Kansas voted for last year had section 116 language in it. The Senator is precisely correct about what it did. That was not Republican language. That was drafted by the chairman of the committee and the leadership in the House, Democratic leadership, and supported by Members on both sides of the aisle when that bill passed. But in writing the bill this year, they dropped that language.

Now, I do not know why they dropped it, but it was dropped. All my amendment does is to add back that language. I have not changed a comma or a period or a semicolon. I took the language they drafted last year, in the bill that passed, and reinserted it in this bill.

Mr. President, I would. If I could ask the Senator from Texas, who has one of the pending amendments, if he wants to speak on his amendment, I will yield.

I thank the Chair.

The following Senator is necessarily absent: the Senator from Louisiana (Mr. Chambliss).

The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

Mr. President, this amendment which I laid down before the last two votes deals with the problem of crowdout, the problem CBO identified, that for every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private insurance coverage of between 25 and 50 percent. In fact, CBO's number, their estimate, as a result of people leaving private coverage and going into the Government program as a result of this bill, is nearly 2.5 million individuals. That is what this amendment seeks to address.

The amendment is the identical language in the bill that was written by the House majority last year, passed when that bill then came back over to the Senate, passed this body, was sent to the President, and he vetoed the language. It was not written by Republicans, it was written by Democrats, and it attempted to deal with the problem of crowdout. I will describe that after a while. It is not the language I would have preferred, but at least it recognizes the problem.

As a result, I ask my colleagues, what is wrong with the language? Why do we not want to address this problem of crowdout? Since I borrowed your language, didn't change a period or a comma, what is wrong with including that in this bill?

The chairman of the committee noted that 69 percent of the Senators voted for the original bill that did not have the language in it. True. But also, whatever similar number voted for the bill after it passed the House, that did have the language in it.

But that is not the important point. The important point is that, recognizing there was a problem, the House, along with the chairman of the committee here in the Senate, wrote the language, put it in the bill, yet did not include it in the legislation that is pending before us. That is why I have offered this amendment--the same language--to try to deal with this problem.

I was told the Senator from Kansas had a question he wanted to ask, and I yield for the purpose of a question.

Mr. President, I will be happy to.

Mr. President, the reason for the disparity is this: CBO says 2.5--2.4, to be exact, 2.4 million people will lose coverage from their private health insurance as a result of this legislation. For the higher income, it is almost a 1-for-1, and that is the 400,000 number the Senator from Kansas is talking about. Literally, for every person who is added, a person is dropped.

Mr. President, the Senator from Kansas makes a very good point. There are cascading effects of this, first, on private insurers, who will not have the people to cover; second, the Senator mentioned providers. Physicians, for example, will get paid a lot less under this program than they would otherwise. We have seen what happens with Medicare when they reduce their reimbursement to physicians. You have a lot fewer physicians available to treat the patients, as a result of which, probably not only will you have the problems I discussed, but you will have a problem with access and quality of care as a result. That is something that had not occurred to me, and I appreciate the Senator from Kansas making that additional point.

Mr. President, I had promised the Senator from Michigan I would go no more than 5 minutes, and I would appreciate being advised when I am at the 5-minute mark.

I appreciate that. My presentation is now going to have to be interrupted yet a third time here.

I will describe what the amendment does in precise terms. It calls for various reports and studies and efforts by States to ensure they have a plan for making sure there is a minimum amount of crowdout and calling for the Secretary to determine if a State is doing a good job of covering these low-income kids. We can go into more detail about that. Again, it is not language I wrote; it was written by the House and Senate Democrats.

Why is this important? One of the reasons is that as we keep expanding the people who are entitled to coverage here, why are not the lower income kids being covered? There is a very simple explanation. The Senator from North Carolina brought it out earlier: It is easier to identify a higher income cohort of families and cover their kids than it is to find the low-income kids.

This is the problem with a State such as New Jersey. It is why we cover up to 350 percent of poverty there. What they are doing is taking the higher income people. They can find them, they can get them covered, they already have insurance. And as the Senator from Kansas pointed out, on the higher income families, there is almost a one-to- one ratio. You add a person on, one person drops off of private health insurance coverage. It is much easier to do that and build up your numbers than it is to do the tough work of finding those low-income kids, and that is who this program is supposed to be all about. I regret we did not adopt the amendment of the Senator from Kentucky, because the thrust of his amendment was to find the low-income kids, the kids at 200 percent of poverty or below, and get them into this coverage. That is where we are failing.

Instead, under the bill we are considering, we keep adding more and more people at higher incomes. Sure, you can find them, we are covering more kids, but are we covering the kids who need the help? The answer is no. That is why this is so important. That is why this crowdout issue, in addition to the points the Senator from Kansas pointed out, is so important for us to try to resolve.

Again, I do not understand why it is not appropriate to include the same language that was in the legislation last year that went to the President of the United States, because at least it is a modest effort to address the problem of crowdout.

One more point here. What has happened since this effect has become apparent to us. Since 1997, 11 States expanded their programs to make families at 300 percent of the poverty level or higher eligible for SCHIP. That is the problem, that we are going up, rather than finding those kids in the lower income bracket.

When Secretary Leavitt tried to do something about that, and on August 17 of last year issued his crowdout directive to try to cover the low-income kids first, Members of this body objected. I will predict that what will happen is that it is likely Secretary Leavitt's directives are going to be rescinded because what they try to focus on are the low-income kids, rather than simply allowing more higher income kids to be covered.

If that happens, then the entire crowdout issue falls directly in our lap. If we do not have language to deal with it, such as that which I am proposing in my amendment, then not only will the bill become far more expensive, not only will fewer families be covered by private insurance with the attendant consequences there, but we will still have the problem of the low-income kids who are not covered and who have not been found.

We will be speaking more on this amendment before we have the vote on it a little bit later on this afternoon. I will at that time deal with a couple of other points that I want to make.

I yield the floor.

Mr. President, that leaves about 6 minutes. What I wish to do is speak for about 3 minutes and then reserve the balance of my time and then close out the debate, if that would be all right.

Mr. President, again, to remind my colleagues, this amendment is designed to deal with the problem of crowdout, which the Congressional Budget Office says will affect 25 to 50 percent of the people on SCHIP. In fact, about 2.4 million people would leave private health insurance coverage and go to the public coverage of SCHIP. There are a lot of problems with that, as we have discussed before.

The main argument I have heard is that the amendment I have offered here would affirmatively restrict coverage and get kids off the rolls. There are two answers to that. No, it wouldn't. In fact, it has exactly the opposite effect; it would ensure coverage. Secondly, it is not my language. This is language that was written by House and Senate Democrats. Every single Democrat--in fact, every single Republican who voted for this legislation last year that the President vetoed has already voted for the precise language of my amendment. I didn't change a word. I simply took the language the chairman and others in the House had drafted to deal with the crowdout and put it into this bill.

It is actually very minimal language. The official description we have is as follows: Provisions to prevent crowdout. It removes section 116--the underlying bill removes section 116 from the bill that was passed last year. That section required that all States submit a State plan detailing how each State will implement best practices to limit crowdout. It requires the GAO to issue a report describing the best practices and requires the Secretary of HHS to ensure that States which include higher income populations in their SCHIP programs cover a target rate of low-income children. In other words, as I said, ensuring coverage rather than restricting coverage.

So the bottom line is it is the same language that was developed by the Democrats in the House and the chairman last year. Every person who voted for the bill last year has voted for this. There is nothing wrong with it. I wish it would go further. But I think we have to acknowledge that this is a very real problem. One of the reasons it is a real problem is because, unfortunately, some of the States are adding more and more higher income kids. Now, we understand why: because it is easier to find them and cover them, and that is why the State of the Presiding Officer, for example, covers kids up to 400 percent of poverty. It is easier to find those populations. The tough kids to find and get involved in the program are the very low income, at the poverty level, or 200 percent of poverty. That is what we should be striving to cover.

What our amendment does is to simply ensure that as many of the kids who have private insurance as possible aren't going to lose their private insurance, thus encouraging coverage of higher and higher income kids.

Let me reserve the last 3 minutes of my time to see if there is anything else I think I need to respond to.

I urge my colleagues to support this amendment. It is the same language they have all already voted for. It certainly is not going to do any harm, and I think it could do a lot of good.

Mr. President, I wonder if the chairman would respond to a question. I am not certain I understood the point with regard to Secretary Leavitt's August 17 directive.

Do I understand that the chairman supports the policy directive of August 17 dealing with crowdout?

That is what I assumed was the case. Of course, the August 17 directive was designed to try to deal with the problem we are talking about. It is quite likely that directive is not going to exist, which is precisely the reason for the kind of language that we need to have in this bill that is the Kyl amendment.

The whole point is that without something, either the directive such as Secretary Leavitt issued, or the language that is in the Kyl amendment, you are not going to have any Federal directive with respect to States ensuring that the crowdout effect is kept to an absolute limit. That is exactly why we need to do it. Circumstances are no different than they were 6 months or so ago with respect to the problem of crowdout, except that the problem is getting much worse because we keep adding more and more higher income kids.

As the CBO said, and as the Senator from Kansas noted before, CBO estimates that with regard to the higher income kids, it is about a one-for-one ratio. For every one that you add, you take one away from private health care. That is not something we should be fostering. I don't think any of us intends that result. The only people who would intend that result are those who want to wipe out private health insurance coverage and get everybody on government health care. That is where this is taking us. If that is the real motivation of people, well, at least I can understand it, and this legislation certainly would carry us in that direction. But I haven't heard too many people who are willing to admit that that is what they are trying to do, and I don't think that is what the chairman of the committee is trying to do.

So there needs to be something to deal with the problem of crowdout. If it is not going to be the directive of Secretary Leavitt, then it has to be the language prepared by the House and Senate Democrats when they passed the bill last year that President Bush vetoed. That language is not strong enough, in my view, but at least it does require a study of best practices and it requires the States to show whether they are putting those best practices into effect.

The final provision with respect to that is that with respect to two States and two States only, were they not to do that, they would--there would be a limit on the States of New York and New Jersey as a result of the requirement of the best State practice. The higher income States--and there are two--

Mr. President, I appreciate that. I certainly wouldn't need the half of 15 minutes, but I certainly appreciate that, at least to finish my thought, if not another couple of minutes.

The language that was written last year and that would be in my amendment is that in the higher income States, the low-income kids must be covered at a rate equal to the top 10 States, and if a higher income State fails the test, then it wouldn't receive the payment only for those higher income kids.

So there is no difference between all of the other States and even New York and New Jersey with respect to the lower income kids, but the incentive here is obviously not just to cherry pick the higher income kids but to try to make sure you are covering the lower income kids too.

To conclude my comment, either you go with something such as Secretary Leavitt proposed--and I don't think that with the new administration that is going to remain on the books--or you are going to have to have something such as the language that was prepared by my Democratic colleagues last year which at least minimally deals with the problem of crowdout by identifying the best practices and ensuring that the States at least have some kind of a plan to apply those best practices to prevent this huge problem of crowdout.

Mr. President, I find this argument curious because the chairman of the committee made the point that the language he and others drafted was in response to the August 17 directive of Secretary Leavitt. This was their answer to it. They did not like it, so they said: We don't like that directive, we are going to propose some language that is going to solve the problem. It is going to solve it his way, not our way. That is the Kyl language. It is the identical language they wrote last year in response to the Leavitt directive. That is the point. They did not like the Leavitt directive, so they wrote this language.

The Leavitt directive is going to be history, I suspect, in short order. They wrote this language because they knew there had to be something to deal with the problem of crowdout. They could not support the Leavitt directive, so they wrote their language.

I am the one who called it watered down. I will take authorship of that phrase. It is watered down from what I would have done is what I meant by that phrase. I am not speaking of it in pejorative terms. I would have done much more. But my Democratic colleagues, in response to the Leavitt directive, said: We don't like that; we are going to write something that is better. And that is what they wrote.

They knew there had to be something in here dealing with crowdout. All I am saying, since the Leavitt directive is likely to be history soon, No. 1, and No. 2, we do need to do something about crowdout, and No. 3, there isn't any other language they have been willing to adopt, surely language they already voted for that they wrote would be OK.

So anybody who voted for the bill last year, you are flipping. By not voting for this amendment, you are saying: I guess I was wrong then, but I don't see how that could be, given the fact this was specifically designed for the purpose the chairman identified.

I will close with this point. Everybody knows it is a problem. It is real. CBO has identified it. I don't think anybody doubts the problem of crowdout. You either do something about it or not, and I am doing the least thing about it by taking the language proposed by Democrats last year, passed by Democrats last year, and I don't know why the language now, this year, all of a sudden is not any good. What is wrong with the language? That question has never been answered. What is wrong with the crowdout language that was written last year and passed last year? We have to address the problem somehow. This is the least way to do it, in my view.

I urge my colleagues, think about this and think about what you will be

voting against if you fail to support the Kyl amendment. I urge my colleagues to support the Kyl amendment.

I thank the Chair.

If I can conclude with a quick point, to the extent we do not use time, we can have it run equally. If that would be part of the unanimous consent request, I would support that.

Mr. President, this is a useful exchange because the chairman has now made the point that the language of the Kyl amendment was written in response to Secretary Leavitt's attempt to deal with the problem of crowdout.

Again, everybody realizes the problem is real. Something should be done about it. Secretary Leavitt did something about it. Most of my Democratic colleagues did not like that, so they wrote the language of the Kyl amendment to respond to that directive.

The Leavitt language is probably soon going to be history because of the new administration. So the chairman of the committee is, in effect, saying now that because that no longer exists, the Kyl language, the language he supported before is not needed because we do not have to top the Leavitt language. But, of course, what that means is there would be no language dealing with crowdout.

I thought almost everybody agreed that it is a real problem and needs to be dealt with and that States should be engaging in the best practices to deal with it. That is all this amendment does, is to require that the best practices be identified and that they apply those best practices to deal with it. It is not much, but it is something, and if the Kyl amendment is not adopted and nothing is done in conference, then there is nothing. There is no Leavitt directive, there is no crowdout language in this legislation. There is nothing to deal with the problem that everybody acknowledges exists. The mere fact that it was written in response to the Leavitt language and that the Leavitt language is no longer going to be extant is an argument for the language, not against it.

Perhaps the amendment would have done better if I had identified the Democratic leadership in the House who actually drafted it, and instead of calling it the Kyl amendment, I would call it the amendment of the Democratic colleague in the House who drafted the language. Don't take the fact that it now has that name to mean it cannot be any good.

I say to my colleagues on the Democratic side of the aisle, this is something they supported before. It was a good idea then and a better idea now given there is not going to be an administration directive to deal with the problem and something has to be done to deal with the problem.

Mr. President, that is a good point. I certainly concur with the chairman that we need to do national health care reform. But that is not an argument not to deal with crowdout in the very bill that is going to deal with crowdout and in the very bill that we dealt with crowdout last year. In other words, the language of the Kyl amendment is the language that was put in the bill last year. It was not put in comprehensive health care reform. It was put in the SCHIP bill because it is in the SCHIP bill that the problem of crowdout occurs.

The chairman notes that we do not know exactly how big the problem is, but CBO has given a good estimate. It provides that an Institute of Medicine study would describe the best way to measure crowdout. That has to be submitted 18 months after enactment. This is not exactly warp speed. We have 18 months to figure out the magnitude of the problem. GAO would submit a report to analyze the best way to address the crowdout. And then within 6 months of receiving the reports, the Secretary of Health and Human Services would develop recommendations on how to deal with it. We are now 2 years from now, or when the bill passes, and then 6 months after that the Secretary would publish the recommendations, and eventually we get to the point, after the studies, to figure out how big the problem is and what to do about it. The Secretary publishes it, and then the States have the obligation to look at these options and best practices and to institute them, probably 2\1/2\ years after this bill becomes law.

So we are not exactly jumping the gun here, and it is far more appropriate to put the language in this bill, the

SCHIP bill, as we did last year, than it is to wait for some future health care legislation. I don't buy that argument.

Again, I urge my colleagues to support the Kyl amendment. It is the same thing everybody who will be voting for this legislation voted for last year.

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

Mr. President, the legislation that is before us is a reauthorization of the Children's Health Insurance Program, but it is, as I said yesterday in my remarks, seriously flawed in a number of respects. Because of that, the minority leader, the Senator from Kentucky, and I have offered an alternative. It is called the Kids First Act. The Kids First Act is an effort to reauthorize this important program but address the numerous flaws in the pending proposal so we can adopt something that literally puts kids first.

I spoke yesterday about several of the problems with the underlying bill. First, the problem of crowding out private coverage. We created this Children's Health Insurance Program in order to help families who did not have insurance. But the bipartisan Congressional Budget Office has noted that because of provisions in the underlying bill, there are actually over 2 million people--in fact, 2.4 million people--who will go to the Government insurance program who already have private health insurance that is perfectly adequate to their needs. The reason primarily is because their employers obviously appreciate the fact that it is costing them money to insure their employees' families and it will be a lot cheaper if those families go to this Government-run program. Our effort was never to cause people to leave the health insurance coverage they have to come to a new Government program. Our effort, when we adopted the kids insurance program, was to provide insurance for those who did not have it already.

This crowdout effect is well known, and it is well understood. It can actually be quantified as the Congressional Budget Office did. Last year, we offered a couple of amendments to ensure that the crowdout effect would be minimized. The amendment I offered was not adopted. But recognizing that there was a serious problem, when the Democratic leaders in the House and the Senate wrote the bill that ended up passing both the House and the Senate, though it was vetoed, it was supported by Democratic majorities in both the House and Senate, and it had some language related to crowdout. I thought it was insufficient language, but nevertheless I understood the necessity of dealing with the issue.

That language is not in this bill. So in the committee, I offered the Democratic language. The Senator from Montana, the chairman of the committee, helped draft it. As I said, it was supported by Democratic majorities in both the House and Senate. Essentially on a party-line vote, that amendment was rejected.

We need to deal with the problem of crowdout. The legislation Senator McConnell and I have drafted does put kids first. It tries to deal with the problem of kids who do not have insurance rather than taking families who are already insured and transferring them to a Government program.

Another problem we spoke of is the fact that as this program has expanded, it does not just relate to families who are at the poverty level or even twice the poverty level but three and four times the poverty level. In other words, it can actually cover families in two States--up to $88,000 a year in New York and about $10,000 less than that in New Jersey. That is clearly wrong. We are trying to talk about low-income families. In fact, if you add other assets of a family that are not counted in income, you could literally have $40,000 in additional assets and, in New York, be making $128,000 a year for a family and be eligible for this low-income children's health care-- $128,000-a-year income. That is wrong. What that does is take money from the State of the Senator from Oklahoma, it takes money from my State of Arizona and other States and transfers that. We are trying to be as frugal as we can. Our limit is 200 percent of poverty. That is twice the poverty level. That is what we pay for in Arizona. But we are having to pay for more than twice that much for families in New York. That is not fair. The program Senator McConnell and I have offered as an alternative deals with that problem as well.

In addition, we ask that people demonstrate that they are eligible for this coverage. That has always been a part of the program. The bill that is before us weakens those provisions so that you do not have to have the same kind of documentation that you are eligible for the program. It expands the program to legal immigrants in this country who have always had a contract that they will not become part of our public welfare system.

One of the really interesting things is the budget gimmick that is used which Senator McConnell and I believe should not be part of this program. It is a budget gimmick to circumvent the Senate's so-called pay-go rules by which we ensure whatever the costs are, there is a way to cover those costs. The way that is done is that the program, even though it is a 10-year program, as all of our authorizations are--after 5 years, there is just an assumption that it does not cost very much anymore. Of course, under that assumption, we would have to disenroll millions of people from this program. That is never going to happen. Everybody knows that. Everybody knows that gap in financing would be filled, and as a result, the program would actually cost $40 billion more than it is alleged to cost as the bill came out of the committee. And that is by CBO's number, $41 billion-plus.

Those are some of the deficiencies with the legislation.

The amendment Senator McConnell has offered, the Kids First Act, is very targeted and I think a much more responsible approach to the problem. It does reauthorize the children's health care insurance program. It preserves health care coverage for millions of low-income children. It actually adds 3.1 million new children to SCHIP. It minimizes the reduction in private coverage, the so-called crowdout I spoke about earlier, by targeting SCHIP funds to low-income children, not higher income families who may already have access to insurance. By the way, it is offset without new tax increases or a budget gimmick such as the program before us is.

I encourage my colleagues to ask us questions about this amendment. If they have concerns about it or would like to debate, I would love to have that debate on the floor, if anyone would like to engage me in a discussion about why this is not a superior alternative.

The bottom line is, we have two choices. We have a budget buster that does not protect SCHIP coverage for low-income children, that represents an open-ended financial burden on taxpayers and takes a significant step toward Government-run health insurance or the amendment Senator McConnell has filed, a fiscally responsible SCHIP reauthorization that preserves coverage for low-income children. It is fully offset without a budget gimmick or a tax increase, and it minimizes the so-called crowdout effect on employer-sponsored health coverage that people have today.

I think the answer is clear. The Kids First Act is the right solution. And when we have an opportunity to vote on that, hopefully a little bit later this afternoon, my colleagues will take a good hard look at it and see if they don't agree that is a good approach to the reauthorization of SCHIP and support the McConnell amendment.

The following Senator is necessarily absent: the Senator from Louisiana (Mr. Chambliss).

The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

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

Madam President, this week the Senate is considering the so- called SCHIP bill, the State Children's Health Insurance Program, which is what SCHIP stands for. It is a program that has been worthwhile to take care of kids who are from families of lower income and need help with their health insurance. Last year, we attempted to work in a bipartisan way to get a reauthorization of the so-called SCHIP bill. This year, however, the Democratic majority has decided to work it alone, to write a partisan bill without Republican input. In fact, every single one of the Republican amendments offered during the Finance Committee markup of this bill last week was defeated. There was one small amendment that was accepted; otherwise, they were all defeated.

It is my judgment that this is not the best way to start off the year--working together, bridging the partisan gap, all of the things President Obama talked about, trying to put the old politics behind us--if we are simply going to approach something this important on a partisan basis.

I rise to talk about four specific ways in which I hope we can come together and work in a more bipartisan way to improve the bill. It doesn't put low-income children first, and that should be the whole point of the SCHIP bill.

First, it expands SCHIP to higher income families--in fact, for two States and only two States, for families making $88,200 a year. That is not for the State of the Presiding Officer or for my State. That is only for New York State. People in New York State would be able to make $88,000 per year--actually, about $40,000 even above that--and qualify. So it is not about helping low-income children.

Second, it removes about 2.5 million people who are already in private insurance programs with their employer. It will result in their leaving the employer's health care coverage to come to a Government- sponsored program, something called the ``crowd out'' effect.

Third, it is actually not even paid for in the sense that we normally treat these authorization bills. We try to make sure that whatever new spending we provide is offset by some other spending. But there is a budget gimmick that is used to account for the spending in this bill.

Finally, for the first time it significantly expands the program to include not only citizens but legal immigrants, primarily green card holders. It eliminates most of the requirement for demonstrating eligibility for citizens, which would result in a lot of illegal immigrants getting coverage.

In these four important areas, we ought to work together and find a way to amend the bill before we end up voting on it, perhaps at the end of the week.

Let me first turn to the question of the budget gimmick. Sometimes you say how much something costs. In the Senate, our scoring always requires that we show a 5-year cost and a 10-year cost. That is a good thing to do. What they do in this bill is make it work, in effect, for about 4.5 years, then they slow the spending way down so that it doesn't look as if it is going to cost any more. The result would be that we would have to disenroll millions of children. Think about it. Are we being honest when we have a level of spending for 4.5 years and then it drops off a cliff to virtually nothing? Are we honest to say that is the 10-year cost of the bill when we know we would have to disenroll kids in order to make it work that way? No. The reality is, we are going to continue to keep the level of spending for the entire 10 years, and the bill, therefore, will cost about twice as much as we say it is going to cost. In fact, the Congressional Budget Office, which pays attention to these things, says the cost of the bill is going to be about $115.2 billion over 10 years, of which only $73.3 billion is offset. So the net result is a $41.6 billion deficit spending bill for fiscal years 2009 through 2019. That is the first problem.

The second problem is that the bill is not limited to low-income families. In fact, it is extended to quite high-income families. It permits States to cover children from families earning as much as $66,150 per year. That is 300 percent of poverty. That is well above SCHIP's original intent of 200 percent of poverty. Of course, the more you increase the income level, the more likely it is that you are going to crowd out people who already have insurance.

As I mentioned, there is even an exception for New Jersey and New York which would allow families in New Jersey earning approximately $77,175 per year to qualify, and in New York, $88,200 a year or 400 percent of poverty. Let me put this in perspective. In Arizona, the Arizona KIDS Program covers families earning $44,100 per year or 200 percent of poverty. That is low-income families. But under this bill, Arizona's hard-earned taxpayer funds will be sent to cover families who earn twice that much in New York State. That is not fair. It is not right.

To make matters worse, the committee acknowledged that States may intentionally disregard tens of thousands of dollars worth of income in order to make a child eligible. They could disregard, for example, $20,000 a year in housing expenses, $10,000 a year in transportation expenses, $10,000 a year for clothing expenses. The net result is that if Congress sets this level of $88,200 for New York and then allows $40,000 worth of income disregards, children could actually come from families earning nearly $130,000 and still be eligible for SCHIP. That does not comport with what either Senator Obama said he wanted or what most of us think would be fair.

Third, I talked about the crowd-out effect, especially by extending this to higher income families. We are going to replace a lot of private insurance with Government insurance. In fact, according to the Congressional Budget Office, about 2.5 million individuals will lose their private coverage under this bill.

It is interesting that last year we raised this problem. It was considered to be a serious problem. But my amendment to try to deal with that failed. Nevertheless, when the Democratic House leaders and Democratic Senate committee members got together, they wrote a provision to deal with the crowd-out, recognizing that it was a serious problem. They passed the bill. This was written in part by the chairman of the Finance Committee. That crowd-out provision, however, was dropped from this year's version of the bill. There is no crowd-out provision. So in the committee, I offered an amendment to insert their crowd-out language, the language drafted by the chairman of the committee, passed by the House and Senate last year. That amendment failed.

Well, maybe it is premature to deal with the problem of crowd-out. We know there is going to be crowd-out. The Congressional Budget Office says there will be, and the time to deal with it is before we adopt the legislation, not after.

Finally, let me close with the immigration-related section, section 214. This eliminates the current 5-year bar allowing Federal coverage of Medicaid or SCHIP coverage for legal immigrants. These are primarily green card holders. Not even the House bill goes this far. The Senate bill actually eliminates the requirement that sponsors of immigrants reimburse the Federal Government for immigrants' coverage. This would be for the first time since actually 1882--our Federal law dates back that far--with regard to immigration.

We are a nation of immigrants. We invite immigrants to come here. My grandparents are immigrants. We want to make sure that when they come here, they don't immediately become a public charge or go on welfare. That is why, starting as far back as 1882, we said: You need to take care of yourself when you come here and not ask the Government to do it or at least have your sponsor affirm that he or she will take care of you. That was affirmed in 1996 when we updated the legislation.

This mark would eliminate that requirement, so that from now on legal immigrants, primarily green card holders, would be able to avail terms of this coverage. It is about 300,000 individuals estimated at a 5-year cost of $1.3 billion. I don't have the CBO number for the 10-year cost. That number doesn't even begin to take into account people who are here illegally but who might actually make legal under some kind of immigration reform, if that were to happen. It is also estimated that about 100,000 of these 300,000 individuals would be crowded out from either private insurance or State insurance coverage. So we continue to have the crowd-out effect here.

The problematic section is section 211. This will likely increase the number of illegal immigrants and other ineligible individuals because it eliminates the current document verification to demonstrate that you are entitled to accept the benefits of the program. What this does is to say that all you have to do is provide a Social Security number. In my State, all of the illegal immigrants--virtually all of the illegal immigrants have Social Security numbers. In fact, they have a lot of Social Security numbers sometimes, most of which are probably not valid, some of which, however, are valid. So even if they are checked through the system, which this bill does not require, you would catch them. All you have to do is to say: Here is a Social Security number. Now let me avail myself of the benefits. That is the whole point of the immigration reform legislation. That Social Security number proves nothing with regard to eligibility. That would be substituted for the requirements already in the bill.

Are the requirements already in the bill onerous? I think not. There are four different levels of documentation you can provide. The last document, tier 4, is when you can't do any of the other things, you can simply have two

individuals affirm your citizenship. You can do this by mail. You don't even have to show up in person. So it is not as if we have onerous requirements today to participate in the program.

Even with the very generous provisions we have, it is my understanding from a GAO study in 2007 that we think most of the people who are eligible are signing up and we are not getting a lot of ineligible people signing up. In other words, people are not gaming the system, and that is a good thing. But why make it easier to game the system, especially to play into the hands of those who are here illegally, who use a Social Security number for work purposes and now could use it for this purpose, signing up for SCHIP.

We will have amendments that deal with each of these subjects. The bottom line is, we should get back to dealing with this subject in a way in which both Democrats and Republicans can have input into the bill and actually solve some of the problems. I know some of my Democratic colleagues were interested in this eligibility issue because they don't want a lot of people getting benefits who aren't entitled. It will only hurt those who are entitled. We need to have strong eligibility requirements.

We don't want to begin to expand this program to people who are not citizens of the United States and who have a contract with the United States when they come here as our guests, either on a temporary basis or on a green card. They understand their obligations when they come here. One of their responsibilities is not to begin to receive benefits of this kind from the taxpaying American citizen.

For these four reasons, I hope that when this legislation comes before us, we are able to not only amend the bill, work to amend the bill, but will actually have amendments adopted and that we can improve the legislation so that we can all be proud to support it at the end of the day. If not, an awful lot of Republicans, including myself, will not be able to support the legislation.

Madam President, I thank the Senator from Iowa for allowing me to speak very briefly. I had intended to support Mr. Geithner's nomination. He

is not the only person who can do this job, but he is the President's choice and is entitled to some deference and I actually believe he will give the President some good advice.

However, there must be an element of trust between us, based on candor and forthrightness. Secretary Paulson and I trusted each other and it benefited both of us for the benefit of the American people, I believe. Unfortunately, Mr. Geithner, in his appearance before the Finance Committee, I believe did not demonstrate the requisite candor in answer to our questions. As a result, I therefore regret I cannot support his confirmation.

The following Senator is necessarily absent: the Senator from Missouri (Mr. Bond).