Floor Statements

Mr. President, I suggest the absence of a quorum.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I understand I now have the right to offer an amendment, but prior to offering the amendment, I wish to make a couple comments.

I have watched this debate develop, and it develops with a certain tempo every year. One of the comments that has been made in the paper by the chairman--and it was also made by the President, interestingly enough--is that if we disagree with the budget as brought forward by the President, we should offer our own budget. Historically, the way this has happened is that the party in the minority has not offered a budget. Traditionally, the party in the minority has offered a series of amendments to try to improve the majority's budget.

That is the tack we have taken this year. That seems like a more logical tack to me because it is a more bipartisan approach. We are simply trying to reach out to the majority and say: Hey, listen. If you accept this amendment and this amendment and this amendment, your product--the budget you have brought forward--is going to be a much better product. For example, if you reduce the amount of spending in your bill because your bill spends too much; if you reduce the amount of taxes in your bill because your bill taxes too much; and if you reduce the amount of borrowing in your bill because your bill definitely borrows too much, then the amendments which we offer to accomplish those three points would significantly improve your bill.

In addition, we are going to offer amendments which address positive policy initiatives. For example, we will offer an amendment to try to improve the energy policy of our Nation by allowing Americans to produce more American energy rather than buy it overseas, and to conserve more American energy--which is the approach we should take. We will allow Americans to produce more American energy by allowing more drilling in an environmentally safe way, by allowing more nuclear plants, by allowing more wind and solar energy, at the same time conserving. We will offer that amendment.

We will offer an amendment to improve the budget by offering a positive policy on health care where every American could be insured but where we do not add another $1 trillion in spending and don't step off on the course of nationalizing our health care system. We will offer amendments which will try to get under control the real threat we have as a nation, from the fiscal policy standpoint, which is the out- year debt, the fact we will be passing on to our children debts which are not sustainable, debts of a trillion dollars a year as far as the eye can see. That is not sustainable. So we will offer policies in that area, relative to trying to have a more balanced approach toward spending around here rather than a profligate approach toward spending.

That is the approach we take to improve this budget by amendment. It is a bipartisan approach. We are not going to set up our budget versus their budget and have a partisan debate. We are going to suggest they change their budget and make it a more positive document and more bipartisan document. Interestingly enough, this is exactly the same approach taken by the chairman when he was in the minority and I happened to be the chairman, and I respected that approach and I did, on occasion, ask where is your budget and he came back with his statements, which were eloquently and brilliantly presented, that said he would do it by amendment. In fact, they were so eloquently and brilliantly stated I brought some of the statements here so other Members can see the eloquence of our chairman on the subject.

March 10, 2006, when I offered a budget and I asked: Where is your budget, Senator? And he said:

We will offer a series of alternatives by amendment.

Concise. People are concise from North Dakota. Sort of like New Hampshire. That is why we like each other. Then he made another statement when I asked the question where is your budget, Mr. Chairman, and said, on March 14--a more expansive statement:

Mr. President, the chairman says we have offered no budget.

I did say that.

The chairman well knows the majority has the responsibility

to offer a budget. Our responsibility is to critique that

budget.

We have great admiration for the chairman. I listened to his words when I was chairman. We are following that course of action. So I hope that as we move down the road with this discussion that we have no more statements in the newspaper to the effect there is no budget being offered by the Republican side.

On another subject, I heard--and I listened to what the President said on the issue of this auto bailout issue. I have deep reservations about this. I have been a strong supporter of the initiatives that this administration has taken trying to stabilize our financial industry. The financial industry is the core systemic element of our economic well-being as a nation. The availability of credit at a reasonable price, reasonably easy to obtain, is the essence of a strong and vibrant capitalist system. It goes to the core question of Main Street and how you make Main Street work.

If you think of us as a body, a nation as a body, the financial system is the blood system, it is the arteries, it is what moves the blood through the system. So it is critical that we have a viable financial system. I have been very supportive of the administration's initiatives in this area. I have been very supportive of Secretary Geithner's initiatives and I have been very supportive of Secretary Geithner. But this idea that we should step in to underwrite the automobile industry is something with which I have real problems. I had problems when the prior administration did it at the end, in the final days, and I have problems with it now. It is an important industry--no question. But, remember, cars are produced in this country that are not necessarily produced by these two companies, GM and Chrysler. There are also cars produced by Ford, Toyota, Honda, BMW. A

variety of companies have manufacturing facilities in this country, so it is not as though the entire system is threatened relative to employment of the people in the auto industry. It is these specific companies that are having problems and they are important but they are not systemic.

Equally significant is the fact that these companies have had problems for a long time in the production of a product that is competitive. Before we start putting tax dollars into these companies, there has to be a very specific plan that shows they will be viable, that these tax dollars will not be good dollars chasing bad dollars, and that means there has to be a plan, No. 1, to produce products people want to buy; and, No. 2, reduces significantly the debt so the bondholders actually take a fairly significant haircut; and, No. 3, brings their employment contracts in line with the employment contracts of their competitors. None of that has happened so far. It is very hard to justify putting money into this industry in this present climate and under the failure of proposals to come forward to accomplish that.

Something else the President said has raised a question to me. That is, he is saying that the Government is going to insure the warranties of these automobile manufacturers, specifically GM. Because if Chrysler affiliates with Fiat, that would not be necessary, I presume. That is a fairly significant step for the U.S. Government to take, that we are going to insure the warranties on cars. Is that the business of the Government? Is that the purpose of the Government? Does that mean we put a new telephone line in my office in Portsmouth for people who have problems with their transmissions? That they are supposed to call me?

Let's be honest about this. This is probably not a course of action that makes a whole lot of sense, that the Government is going to get into the business of underwriting the warranties of a manufacturer.

I have deep reservations about the course of action here. I do hope before we put any more money into this--in fact, I hope we will not put anymore money into it, but if there is more money going into it, there is at least a clear and defined plan that shows these companies will be viable, which means they have to put on the table a plan that shows they are going to make products we support, that people want to buy, bondholders are taking a fairly significant hit, and their union contract and the legacy contracts are adjusted to be more in line with the competition.

Amendment No. 739

On the specifics of the amendment which I am offering at this point, I ask the clerk to report my amendment.

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

This is a pretty simple amendment. It comes about as a result of one of the elements that I see as the core of the problem with the President's budget, and that is that we, under the budget as proposed by the President, are going to pass on to our children an unsustainable Government and a debt which will essentially put them in a position where their quality of life will be dramatically reduced because of the burden of the debt they have to pay relative to the Federal deficits that have been run up. The President's budget doubles--you have heard this before--doubles the national debt in 5 years, triples it in 10 years. These are massive expansions in debt. It is hard to put these numbers into context, but they represent the fact that every household in America, by the year 2019, will have $130,000 debt on its back added as a result of this Presidency, and $6,000 of interest payments that they will bear as a result of this Presidency.

That means the debt added to their backs and the interest added to their backs probably will exceed their mortgage payments--to pay for the Federal Government. So it doubles it in 5 years, triples it in 10 years. The burden will be extraordinary on our children because they are the ones who will have to pay the cost of this. It will lead to a decrease in the quality of life of our Nation because the burden of paying this will lead to one of two options: Either we inflate the currency, thus reducing the value of the dollar--and inflation is a dangerous thing for society to have happen to it; it makes everybody's work less valuable and it makes the products they produce more expensive--or, alternatively, the tax burden to pay for this will have to go so high on all Americans--this is not just the wealthy; the wealthy already are going to be taxed under this budget--it will go so high on all Americans that their discretionary income which they might use to buy a house, which they might use to send their children to college, which they might use to buy a car, to live a better lifestyle, will be eliminated or significantly reduced, anyway, because they will have to go through the burden of paying taxes to cover the debt that we are running up now. We are, our generation, running it up and we are handing it on to the next generation. It is very wrong for one generation to do this to another generation.

We will be creating under this budget, or the President is proposing to create under his budget, a wall of debt which goes up and up, a wall of debt which will be sitting on top of the American economy and the people of this country. The American people are not going to be able to get over this wall of debt. They will run right into it and the economy is going to run right into it, and it is going to have a devastating impact on us.

Other countries are going to be worried about this. Other countries that buy our debt and support our ability to function as a nation are going to be worried about the size of this debt. In fact, the Premier of China has already said--and he is the largest holder of American debt instruments outside of the United States--has already said that he is concerned about this. If China or other nations start to get concerned and are not willing to buy our debt, then that puts us in a difficult position because if we are going to run up all this debt and we have nobody who can buy the debt, that is when you hit inflation. That is when serious things happen.

We do not have to look too far to see it already happening in other nations. Ireland. Ireland got its debt so out of kilter it just had its credit rating reduced. A whole nation, which is considered to be a pretty vibrant nation and which for a period was considered to be the most vibrant economy in Europe, had its credit rating reduced. That is a huge event for Ireland and it reflects the fear that the Irish economy will not be able to support the deficits and the debt that are being run up.

How large was the Irish debt and deficit that led to this credit rating--credit downgrade? Their deficit was 12.4 percent of GDP. You say that is pretty darn high, no wonder the credit rating agencies said the Irish debt may not be sound or as sound as other nations.

How high is our deficit going to be? Under this budget resolution, this year it is already going to be 12.2 percent. We are closing in. Under the President's budget proposal, it will exceed 13 percent this year if the proposals in his budget are enacted. We are closing in on the Irish situation. We are spending a lot of money we do not have and we are running up a lot of debt we can not afford. In fact, stated another way, if you look at all the debts, all the deficit and all the debt run up on the United States since the beginning of our country-- 1789, when we began running up debt, that is when George Washington was President--this is a picture of all the Presidents here. If you look at all the debt they ran up on our Nation from George Washington through people such as Buchanan, Polk, Lincoln, of course, Grant, Garfield, Wilson, Harding, Franklin Roosevelt, Truman, right up through George W. Bush--all the debt run up by all these people, all these Presidents throughout all their administrations, the President of the United States, President Obama, is suggesting that he, under his budget, we should double that--double this cumulative debt run up on our country since 1789 in about the first 5 years of his Presidency.

That is incredible. That is an incredible explosion in debt. It gets back to this chart I held up that says we are going to double the debt in 5 years under this Obama proposal--President Obama's proposal--and triple it in 10 years. It is incredible.

I do not think that is affordable. I don't think our Nation can do that. So I have offered the amendment I call the 1789 amendment. We are going to refer to it as the 1789 amendment. Actually it says there will be a point of order against a budget that proposes that the debt of this Nation should be doubled during the period of that budget--that if that debt would double, that a budget which would propose that debt would double the amount of debt run up since 1789 through January 20, 2009--if a budget comes to this floor which doubles the debt of the United States, which has been run up since 1789, through 2009--run up under all the Presidents of the United States prior to President Obama, there would be a point of order against that budget.

Does a point of order mean the budget can't be passed? No. The budget can be passed. It is just going to take 60 people to pass it rather than 51. That seems reasonable, that if you are going to leave our children with a doubling of the debt in 5 years and a tripling of the debt in 10 years, that you ought to be willing to get 60 votes to do that.

The reason for this, of course, is to highlight and make it clear to the American public what we are doing to ourselves. I do not expect to win the point of order very often--especially if my colleagues on the other side of the aisle have 58 votes. But that point should be made so the American people see in a very clear way what is happening to them. That is what this is about--making it very clear to the American people that if the deficits are going to go up in this way, that if a President proposes to run a $1-trillion-a-year deficit for 10 straight years on average--$1 trillion, think about that for a moment, a $1 trillion a year deficit for 10 straight years on average--wow. We used to get concerned around here, and rightly so, whether we were running a deficit in the range of $200 billion.

We are now talking about $1 trillion a year under this President's budget, as the deficit that is proposed. Five to 6 percent of the gross national product will be deficit spending, with the practical implication that it adds to the debt almost $9.3 trillion, tripling the debt, taking the debt as a percentage of GDP up past 80 percent, which is an unsustainable number. It is so unsustainable, in fact, that we wouldn't even be able to get into the European Union if we wanted to because they don't allow countries in that have that amount of debt. Can you imagine that? We are worse off than all the countries in Europe that are part of the European Union because of the level of debt being proposed in this budget.

Nobody wants to use Europe as an example, but that is a pretty significant benchmark. We will be headed toward a situation where the value of our currency is at risk, where our ability to sell debt will be limited or affected, where we have a potential for massive inflation, and where we essentially will pass on to our children a country they cannot afford because the tax burden to support the government will be so overwhelming. We should not do that. I don't think we should do it.

The history of this Nation is that every generation passes to the next generation a better and more prosperous country. The implications of this budget are that we will be unable to pass to the next generation a better and more prosperous country. This amendment, which we call the 1789 amendment, says, if we want to pass a budget that doubles the debt over all the debts that have been run up in this Nation since 1789, we need to get 60 votes rather than 51. We have to get nine more people to agree. That seems a reasonable threshold and, hopefully, a transparent event that will make it clear as to what the budget is doing to the next generation.

I yield the floor.

I was going to put them in lights, but they don't allow that as part of the rules.

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

Mr. President, is it not true that under the rules of reconciliation, an instruction to the House Energy and Commerce committee that is contemplated for purposes of health care, for example, would not prevent that committee's ability to use the reconciliation process for the purposes of climate change legislation because a reconciliation instruction cannot specifically state which matters within its jurisdiction a committee should address to comply with its reconciliation instruction, which is only a dollar number?

Mr. President, I would agree, and I am wondering why we would need reconciliation instructions. I ask the Senator this question: Why would the House need reconciliation instructions? Do they not have a Rules Committee? Would not the only purpose of reconciliation instructions in a House bill be to have a conference report approve a reconciliation instruction, which would tie the hands of the Senate? It certainly wouldn't tie the hands of the House, would it? In tying the hands of the Senate, it would allow Senate committees to reconcile the issue of a cap-and-trade bill and create a carbon tax--or a national sales tax--every time somebody turns on a light switch in America; and there would be no way to limit that once there is a reconciliation instruction in a conference report.

I think the Senator from Alabama is absolutely right; that could be the only conclusion. Is there any other conclusion that can be reached? I don't believe there is. The only purpose of a reconciliation instruction in a House bill is for the purposes of controlling the floor of the Senate--not the floor of the House--and set up the possibility of passing it in a conference report.

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

Mr. President, I would ask the Senator from Alabama this: The Senator from California has correctly stated that reconciliation has been used often in this body before. It was used by President Clinton, since I have been here. It was used by President Bush. I voted for most of the different reconciliation bills. But is it not true that reconciliation, when it has been used before--even though used for significant events--has always been used for already existing policy; whether it is changing the rates of taxes, whether it is changing the way the welfare system was adjusted relative to who was covered or whether it was changing the way we deal with student loans?

It was always used on existing policy that had been pretty well aired on the floor of the Senate. It has never been used for the purpose of creating, ab initio, a brand new major tax, which would essentially tax every American every time they turn on their light switch--a national sales tax--which would introduce industrial policy and which would affect virtually every American as to their jobs--sending many of them overseas--and as to the ability to be competitive. Has it ever been used for such a broad, extensive public policy event of creating massive new taxes that don't exist today--a national sales tax--and massive new industrial policy?

It would mean that policy and those taxes would come across this floor without amendment, with 20 hours of debate, and an up-or-down vote. Has it ever been used in that context in the Senate?

Will the Senator yield on that point?

Mr. President, first I appreciate the Senator arguing for our case, which is that we should not use reconciliation in the Senate for the purposes of pursuing a vehicle such as a massive new sales tax on all Americans on their electric bills, and specifically whenever they turn on their light switch they are going to get hit with this tax. I would point out as an aside, he may have misrepresented what I said. I didn't say we hadn't used it for significant things; we have used it for significant things. But we have never used it for creating, ab initio, a national sales tax or any tax, for that matter, ab initio, and that is where the rubber meets the road.

I do believe strongly, listening to the Senator, that he has basically admitted a conference report could carry in it reconciliation instructions which

would allow for reconciliation to be used to create a new national sales tax on everybody's electric bill. So it seems perfectly reasonable that what the Senator from Alabama has requested should be agreed to here. Because he essentially is asking for what the Senator from North Dakota has suggested he supports, which is that reconciliation will not be used that way after the Senator from North Dakota has said the reconciliation may be able to be used that way.

There is no reason for the House of Representatives to put reconciliation in their bill. It is a touch cynical for the other side to represent that, because the bill before us today doesn't have reconciliation in it, that reconciliation is not being considered as a vehicle before this body because the only reason the House of Representatives has put reconciliation in their vehicle--because they don't need it, they have a Rules Committee--is because they can bring it out of conference and stick it to the Senate and put it into the Senate procedure here.

It means, on a purely procedural event, that the House of Representatives is actually going to be controlling the floor of the Senate. How outrageous is that? But independent of that there is a procedural point--which affronts me as a Senator and I think would affront the tradition and history of the Senate--there is the more substantive issue that reconciliation should never be used to create a brand new national sales tax. And that, of course, is what the Senator from North Dakota has said is true, it should not be used in that way.

So why do they object to the fairly benign request here of the Senator from Alabama, which is to ask unanimous consent that we not use reconciliation on the floor of the Senate for the purposes of creating a national sales tax, or what is euphemistically called a carbon tax? I don't understand the opposition myself. It seems very strange. Under the bill----

I yield for a question.

It seems as though the Senator from Alabama is expressing through his unanimous consent request the exact thought process of the chairman of the committee as stated here on the floor.

Mr. President, I know Senator Thune wishes to speak off the bill. I see the assistant leader is here. I wish to sort of line up time so everybody gets time before we go into adjournment.

We can go until you finish.

I ask unanimous consent to change that. How much time does the Senator need?

I ask unanimous consent the Senate continue to debate this issue under the bill until 12:40, and that the 10 minutes from 12:30 to 12:40 be allocated to the Senator from South Dakota and the Senator from Oklahoma, and the time from now until 12:30 be for the Senator from Michigan.

Mr. President, do I not control the floor?

I yield my time off the bill to the Senator.

I have the right, do I not?

Let's sort it out. That is a better approach.

Give 5 minutes to everybody in sequence until they finish.

I ask unanimous consent that when we return at 2:15, after Senators who have the right to speak have completed their statements, the time between 2:15 and 2:30 be divided between the Senator from South Dakota and the Senator from California.

Mr. President, I call this the 1789 amendment because it simply says that if there is a budget brought forward after January 2009 that raises the debt of this country more than all the debt added up by all the Presidents since 1789, starting with George Washington, Thomas Jefferson, Franklin Pierce--to remind a few of you folks-- Franklin Roosevelt, all the Presidents since 1789, all the debt they added to this Nation--if there is a budget that brings forward more debt than that in one 5-year period, as regrettably President Obama's budget does--it doubles the debt in 5 years and triples it in 10 years--then there will be a point of order against that budget so it will take 60 votes in this body to pass that budget rather than 51. It is a reasonable request.

Mr. President, I ask unanimous consent that if the Senator wishes to make this retroactive, we will accept it.

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

Mr. President, if the Senator would yield for the purposes of a question, I will try to make it rhetorical. First off, I congratulate the Senator for his amendment because it is a serious amendment addressing what I consider to be the most serious problem with the President's budget, which is that the amount of debt that is being put on the books by this budget is a result of incredible expansion of the size of the Government and the spending of the Government. It is going to put us in a situation where, as the Senator noted, we will probably not be able to sustain the payment of that debt or we will be forced into a position similar to some of the countries the Senator mentioned, which is serious inflation or an inability to borrow money because people will worry about the ability to be able to pay it back and our concern about the devaluation of the dollar.

It is hard, I think, and inappropriate for one generation to put that much debt on the back of another generation.

So what the Senator is proposing is--not that you can't pass a budget, but when you do pass a budget that raises the public debt and grows debt, in this case up to 90 percent of GDP, at a level of countries such as Cuba and Aruba--what were the other countries?

And the debt level, too, I suspect. In fact, we could not get into the European Union at the debt level of 90 percent of GDP. They would not even allow us in.

That is correct, as a result of this budget proposed by the President, because the budget proposal is a dramatic expansion in spending--an expansion of spending up to levels we have not seen since World War II in terms of gross national product. Huge numbers.

The Senator asked how can this--these huge numbers, which nobody can understand, $1 trillion or 90 percent of GDP--how does that translate to the person who lives on Main Street? Well, basically it means at the end of this budget, every household in America will have an obligation relative to the Federal debt that is owed of $133,000. That is probably going to exceed a lot of mortgages they have. So not only do you have your mortgage on your house, but you are going to have a Federal debt which you are responsible for of $130,000. The service on that debt--in other words, the interest costs to pay for that debt--will be $6,200 a year.

Well, China regrettably. They are the primary mortgage holder, although other nations also hold our debt. Russia owns a lot of it, and Middle Eastern countries, such as oil-producing emirates and Saudi Arabia. Obviously, America also owns some of its debt. But the countries outside our Nation, regrettably, have raised their level of ownership of our debt. It has actually been good for us because some people have been able to borrow from us; we have borrowed from people who lent us money--primarily, China, Russia, and other countries in the Middle East have been lending us money.

When we pay back this debt, which is going to be run up dramatically--doubled in 5 years and tripled in 10 years by this budget--we are basically going to be sending hard-earned money from Americans to these other nations.

That is absolutely right. That comes out of every American's ability to have a better lifestyle here. It means Americans will have to pay higher taxes, and they will not have as much discretionary money to spend on buying a house, sending their children to college, buying a car, and doing things Americans like to do in order to enjoy a good life. So much of the income of America will have to be poured into paying off the debt, which will be run up by this budget.

There is an interesting fact that I know the Senator is aware of: By the time we get through the 10-year period proposed in the budget, the amount of money that we as a nation will pay in interest--just interest--on the Federal debt will be over $800 billion, or almost a trillion dollars. That is interest annually. That will be more money than we spend on defending America, on our national defense.

The Senator is absolutely correct. We will spend this money for the purpose of paying interest and, as the Senator points out, maybe more than half the interest payment will go to the people in China, Russia or in the Middle Eastern countries, rather than spending it here to build better schools or basically make sure our national defense is adequate, which is the primary responsibility of the Government, or to build better roads or invest in energy. That seems to be a very bad policy to me.

Mr. President, I believe we had an agreement that, under this amendment, our side would have 25 minutes and the other side would have 25 minutes.

I ask unanimous consent that we be able to have another 5 minutes on our side, and then we will go to the other 25 minutes.

I think they would be. First off, we are not barring the ability to bring a budget to the floor. We are simply saying any budget that anticipates the debt of the United States, which in this budget potentially is occurring or which would occur under this budget as proposed from the President, that has a general debt of over 90 percent of GDP, gross national product, requires 60 votes. Why shouldn't it? If you are going to do that and step off down the road of basically banana republicanism--is that a word?--you ought to have a major vote to do that, a supermajority to accomplish that.

I don't want to be like some of these nations listed by the Senator from Tennessee. I would rather not find myself in a situation where we basically cannot afford our debt and we are passing on to our children a nation which has been so profligate in its spending that it ran up a debt to make it impossible for our kids to have such a life as good as the one we have had.

Mr. President, I ask unanimous consent that all time remaining on the Alexander amendment be yielded back.

Yes.

Mr. President, I appreciate the courtesy of the Senator from North Dakota, who is always extraordinarily courteous, professional, and generous. Before we begin the specific debate on the issue of the budget, which obviously we both have to be here for--and I know he has a lot of things going on in North Dakota with the flooding--I would like to make a few remarks off topic.

(The further remarks of Mr. Gregg and Mr. Conrad are printed in today's Record under ``Morning Business.'')

Thank you, Mr. President.

Let me first thank the chairman for his generous comments, and let me second those relative to himself and his staff.

We obviously have a deep difference of opinion as to the best way to proceed relative to shepherding the financial house of our Nation, and especially specifically relative to this budget that has been sent to us by this President. But I have an immense amount of respect for him and his staff, who are professional and extremely courteous, and we have a great personal and working relationship, which actually makes the job much more enjoyable as a result of that.

And, of course, we send to North Dakota our deep concerns about what they are going through with the floods. I know the Senator was out there this weekend supporting the folks who are working so hard to try to protect their communities--an amazing story: 80,000 volunteers in a town of 90,000. It is very impressive. Let's hope the waters recede before they do any more damage.

I should mention that UNH beat North Dakota in the hockey game this weekend in the NCAA. I noticed my colleague from North Dakota did not actually mention that.

Nor do we.

It was an exciting game, and North Dakota played extraordinarily well.

Mr. President, we do differ on this budget. The budget that has been proposed by the President of the United States has essentially been given its stamp of approval by what has been brought forward by the Senator from North Dakota. There are virtually no differences. As Director Orszag said, they are 98 percent the same, and they are.

This budget, in our opinion, represents a clear and present danger to the financial health of our Nation and to the financial security of our children. It is a budget which spends far too much money, taxes far too much, and borrows an extraordinary amount--it is clearly far too much. It basically repeals the essential laws of common sense--the essential laws of common sense--that say you cannot simply keep spending at a rate that you cannot afford to pay for forever and not have to suffer as a society, and suffer significantly.

Margaret Thatcher sort of captured the tempo of this budget. To paraphrase her, she might have said about this budget: The problem with the Obama budget is that at some point you run out of money.

If you follow the proposals of this budget, you are going to run out of money sooner rather than later. In order to understand this budget, you have to understand the dramatic nature of this budget. Historically, when we have debated budgets in this body, they have been important because they obviously represent guideposts for our Congress, but they have not been a philosophical document that has redirected the Nation fundamentally.

On the part of the President--I give him credit that he is not trying to hide this--his budget openly attempts to redirect the Government of the United States and move it significantly, dramatically to the left, expanding the role of the Government in all sorts of areas, expanding the cost of Government in a historic way, and expanding the burden of the Government in the area of taxes and in the area of borrowing in a way which we have never contemplated as a nation.

To try to put it into perspective, under the budget prepared by the President and sent up here--and it is essentially the same as the budget we are receiving from the Senate Democrats today--the President's budget doubles the national debt in 5 years. That is pretty bad. Then it triples the national debt in 10 years. And that is intolerable.

Now, I have tried to figure out how you explain to people what $1 trillion or what $15 trillion is or what $17 trillion is. It is very hard. Conceptually, it is extraordinarily difficult to get your hands around what $1 trillion is.

As you can see, I had this chart made up when the original estimate was $15 trillion--it went up to $17 trillion--to

show the number of zeros here. It is a staggering amount of money that is being added to the Federal debt. You have to ask yourself: Who is going to pay all this money? This is real money. It has been spent on programs the President wants. Who is going to pay it all? Who is going to pay $15 trillion--with all of these zeros?

Well, unfortunately, our children and our children's children get that debt. It gets put on their backs. At the end of the President's budget, the average household in this country will owe $130,000 in debt for the Federal Government--$130,000. They will have an interest payment on this debt--the average household--of over $6,000. So the debt they are getting may actually exceed the value of their house.

Put another way--which was first coined by my esteemed chairman--he designed this wall of debt. This is the wall of debt, as shown on this chart. This is what the Federal debt does over the period of the Obama budget. It goes straight up. It is a massive wall of debt, which is an incredible burden on our Nation, and really an unacceptable burden if you are going to be accurate about it.

To try to put it in a more understandable term, as shown on this chart: This is a picture of President Obama, of course, on the right side of the chart. On the left side of the chart are pictures of all the Presidents we have had in our Nation since our Nation began 232 years ago, starting with George Washington and going through George W. Bush.

In that period, from George Washington through people such as Madison, Adams, Lincoln, Grant, Hayes, Wilson, Roosevelt the first, Roosevelt the second, Truman--in this period from George Washington all the way through George W. Bush, we have accumulated about $5.8 trillion of national debt. That is how much those Presidents added to our national debt.

Within the first 5 years of this Presidency, President Obama will add more debt on the backs of our people and our Nation than all these Presidents put together. Within 5 years, he will have taken the total debt put on the backs of Americans and doubled it since the country began--a staggering fact.

Now, does this have to happen, the addition of all this debt because of the fact that he has inherited a terrible situation? And he has, and we all admit to that; this economy is in a very difficult way. No, it does not. Yes, in the short term there has to be a government that is run at a deficit in a very significant way in order to try to get the economy going because we all understand the Federal Government is, right now, the only liquid entity around here. So the money is being pumped into the economy to try to give it some lift.

But this recession is not going to go on forever. We are a resilient nation. We will recover from this recession. It will be over hopefully sooner rather than later. But it certainly is not going to run that much longer in the terms of this Presidency. Certainly, by the midterm of this Presidency, we should be out of this recession.

So you would presume--you would presume--at that point, say, in 2011 or 2012 at the latest, the spending of the Government and the deficit of the Government would start to come under control, that there would be some attempts to bring it down and manage it in a more historic way.

Unfortunately, that does not happen under this budget. What the President is proposing is that we continue to grow the size of Government at an extraordinary rate, independent of whether we are in a recession. The average deficit over the term of this President's budget is $1 trillion a year--$1 trillion a year. That is a staggering number. To put it in a historical context, that adds up to about 5 to 6 percent of gross domestic product, and historically the deficit has been about 2 percent of gross domestic product. At the end of this Presidency, the public debt, which is what people own outside the Government, will be 80 percent of the productivity of the country--80 percent of the productivity of the country. What does that mean, 80 percent of the productivity of the country? Well, historically, the public debt has been about 40 percent of the productivity of the country, but under this President, he is going to take that public debt very quickly up to 60 percent, then to 70 percent, and then, by the end of the period of the budget proposed, it will be at 80 percent. That is such a high number, when you couple it with the deficits of $1 trillion a year, that you get to a point where it is simply not sustainable. That is why this budget is a clear and present danger to the fiscal health of this Nation and to the opportunities of our children. In fact, ironically, if the United States were to try to seek membership into the European Union--which, of course, we have no interest in doing, but those are all industrialized nations and they do have a standard for operating their governments in a responsible way. The standard of the European Union is, public debt can't exceed 60 percent of Gross Domestic Product, that deficits can't exceed 3 percent of GDP. We will be twice that number, and it is not sustainable.

Now, did this have to happen? Did the President have to run up these debts? If we had stayed on a pure glidepath and done nothing--in other words, operated the Government as it is--as it is--this blue line would be the cost of the Government. We would actually almost be in balance by the year 2018. That is current law. Now, CBO uses very arcane rules as to how it builds a baseline, but it is the baseline that we determine as a Congress to use. I wouldn't accept that baseline as a recipe for future policy because there are some tax increases in there I don't like, but even if you were to factor out the tax increases, the line would come in the middle here. The reason this goes up so significantly, the reason President Obama's budget goes up so significantly in its deficits is because they propose a radical increase in spending. It is pretty much that simple. It is not about economics or taxes; it is about spending. Essentially, the President's proposal is to incredibly increase the size of the Federal Government and the amount it spends, not only in the short run, which we all accept is necessary--although it has been poorly handled relative to the stimulus bill; worse than poorly handled, it has been a waste of money relative to the stimulus bill--but this is the spike in spending to reflect the deficit and the attempt to address it through the stimulus bill. But look here: After we are out of the recession in the year 2011, the line keeps on going way up--way up--to 25 percent of GDP by the end of this budget.

Well, you say, what does that mean, 25 percent of GDP. Well, how big a government is relative to the productivity of the economy defines how productive the economy will be. You can't have a productive economy if the Government is taking out all the money. It doesn't work very well. Historically, we as a country have tried to keep--and this is the black line here, and you will see it has been very level ever since the year 1958--this is the average, this black line, of how much spending the Government has done. It is around 20 percent of GDP, the product of the United States. Under the Obama years, as proposed by President Obama, that is going to be increased at a staggering rate--huge increases in spending.

President Obama is not trying to hide this. He has not tried to be-- he has been very open about it. He said, to paraphrase him, essentially: I believe we create more prosperity by expanding the size of Government in a number of areas. In fact, if you listen to the Senator from North Dakota, he listed all these areas they are going to explode the size of Government in, moving it dramatically to the left, and increasing it at an incredible rate. In the budget document he sent, he said exactly that. He said: At this particular moment, Government must lead the way in providing the short-term boost necessary to lift us from a recession that is severe and lay the foundation for prosperity.

He went on to say he intended to do this by spending a great deal of money on his priorities, which were clean energy, education, health care, and new infrastructure. However, he doesn't stop spending the money after this recessionary period; he keeps it going into the outyears at a rate which is not sustainable. It is simply not sustainable. You can't take the money from the productive side--from the people who are working and producing jobs and taking risks and going out there and actually producing wealth for this Nation, in the sense that they are actually producing something we have to

sell and use in trade and basically create jobs as a result of that-- you can't take the money from them and move it over to the Government at a rate that exceeds the historical norm at this level and expect you are going to be able to maintain prosperity for the years to come. It doesn't work. It does not work. As Margaret Thatcher says, you eventually run out of money.

The effect of this massive increase in spending is a massive increase in debt. This is the national debt, publicly held debt, which I discussed before, as a percentage of GDP. It averages about 36 percent since 1958. That is the black line right here. It has been up, it has been down, but that is the average. Under President Obama's plan, it goes straight through the roof, and this, I say to my colleagues, is the threat. This is the threat. This is the clear and present danger to our people, to our Nation, and to our children's future, because when you get debt up to that level, you are not able to function as a government. People get concerned about buying your bonds and buying your dollars and using your currency.

You don't have to listen to me to find out that is the case. The Chinese Government has made that very clear, and they happen to be the biggest holder of our dollars. In fact, the chairman is always talking about how outrageous it is that the Chinese own so much of our debt. Well, they own it because they considered it to be a good investment, and if they didn't own it, we would be paying a lot more in interest payments and in taxes in this country and our dollar would be less valuable. But Mr. Zhou, the governor of the central bank in China, has said he is getting concerned about this crisis and about the value of our dollar. The Premier of China said: ``We lent such huge funds to the United States and, of course, we are concerned about the security of our assets.''

Well, it is disconcerting and obviously not very nice to find out for us as a nation--one that has always considered itself to be a reasonably independent and strong Nation, the most independent and strongest in the world--that the Premier of China, who owns most of our debt outside the United States, is worried about it.

Why is he worried about it? Why are the Chinese worried about it? Why are the other nations which buy our debt worried about it? Because they look at this line, they look at this budget. This isn't done in a vacuum. They know what this budget proposes. The President's budget proposes massive increases in spending but absolutely no fiscal discipline. It has discretionary spending jumping by $1.4 trillion-- trillion--it has mandatory spending, a net mandatory spending increase, as it was sent up here, of $1.1 trillion, and it has zero savings in the core accounts, which are mandatory accounts. That leads to these massive debts.

It also has, interestingly enough, $1.5 trillion in new taxes. Now, that is a pretty staggering figure in and of itself, $1.5 trillion. I was entertained to hear my colleague from North Dakota say: Well, actually, we get a tax cut in this bill. That is going to come as a real surprise to all the people whose taxes are going to go up very significantly as a result of this budget. For small business people, taxes are going to go up dramatically as a result of this budget. People who take charitable deductions and homeowner deductions in the higher brackets, their taxes are going to go up, which will probably affect charitable giving under this bill.

But the most insidious tax proposed in this budget is something euphemistically called a carbon tax. Well, what is a carbon tax? That is a way to bury a term so you never understand what they are doing.

A carbon tax is literally a new national sales tax on your electric bills, a brand new national sales tax. We don't have a national sales tax in this country. What is being proposed in this budget by this President is a brand new national sales tax on your electric bill. So every time you hit your light switch in your house, you are going to get hit with a new tax--a sales tax--and it is a big one. It is a big one. The White House sent this specious estimate of it. They said it was $646 billion, but that was low-balling the number. MIT, which doesn't have a dog in this fight, took a look at a similar proposal, along with a number of other groups, and they said it would actually generate over $300 billion in new taxes every year. It works out to about $3,000 per household. So everybody living in America today who has an electric bill or other energy bills, as a result of this new national sales tax, if the President gets what he wants, is going to pay $3,000 more in taxes a year, on average, for their energy bills. That is a huge tax, and it is an incredibly regressive tax. I saw this chart that the chairman brought up, saying we are going to create green jobs. That is all about this energy tax, by the way. That is akin to calling it a carbon tax; they are going to call it creating green jobs. What are they going to call the jobs they are sending overseas? Because industries in this country, which have to use a lot of electricity-- those are the hard-core industries that we still have in this country-- can no longer compete because they got hit with this massive increase in taxes on their energy production and use. What are they going to call those jobs? Green jobs sent overseas? The simple fact is, this type of tax increase is incredibly regressive. Sales taxes are regressive by definition, but a sales tax that is targeted on the productive side of the ledger, as this one is, is exceptionally regressive, as is the dramatic increases in taxes on small businesses in this country.

Now, my colleague has said a number of things about how their budget is different from the President's. It is a little bit different, but it is 98 percent the same, and that is the score. I think I have a chart which reflects that. This is the difference between the two budgets. They are identical on discretionary for all intents and purposes, identical on outlays, identical on revenues. Interestingly enough, however, CBO came back and gave us--CBO is the Congressional Budget Office--an honest evaluation of the President's budget, and some of the things they said, which hopefully scared a few people around here, were that the President's budget increased deficit spending by $9.2 trillion over 10 years, $2.3 trillion more than what the President had told us; that on an annual basis, it averages out to a budget deficit of about $1 trillion a year, and that the percent of public debt jumps, as I have mentioned, but it needs to be reemphasized that it jumps from what it is today to 80 percent of GDP. The deficits jump to 5 or 6 percent of GDP.

The administration has had both the Treasury Secretary and the OMB Director up here over the years--the OMB Director has been coming up here for years but the Treasury Secretary just recently--testifying that the deficits in excess of 3 percent weren't sustainable. They said that; we didn't say that.

So when CBO honestly evaluated their budget and did things such as actually calculate the fact that there was 8.1 percent unemployment, and it is probably going to go up and, as the President said, the top rate would be 8.1 percent, but we weren't there yet--when CBO put the real numbers onto the President's numbers and got these massive increases in spending and in debt, well, these folks decided that we cannot have that. They wanted to get that back down to 3 percent. Did they do it by reducing spending or reducing any of the President's spending initiatives? No. Zero. Do you know how they did it? They did it by playing the old-fashioned games around here of smoke and mirrors and hiding the ball, saying one thing but meaning another.

The President, to his credit, and to the credit of Mr. Orszag, was forthright in their budget, which was probably as close to an honest statement--with exception of the defense number--of what was really happening here relative to spending and what was going to happen as we have had in a long time. I congratulated them for that and still do. But we went backward with this proposal from the Democratic leadership. So that they could get it below 3 percent as a percentage of GDP and get their deficit and debt numbers down, they left out of their budget $1.1 trillion of spending and taxes that President Obama had in his. They are not different, so it is just games. They didn't score their budget correctly or honestly or straightforward. Their budget becomes the ``tax too much, spend too much, borrow too much, and now hide too much'' budget. At least the President's budget wasn't a ``hide too much'' budget, although his defense number has serious problems

with it. At least he didn't take $1.1 trillion in very illusory action, moving the shell around so that you cannot find the real numbers, claiming they made real savings in those accounts. It is actually just pretty ridiculous to take that step backward.

Of course, they now claim that they cut the deficit in half. Now, that is where we depart from common sense. There are a lot of things on which they tried to repeal the law of common sense in their budget, but this is the most outrageous. First, they increased the deficit fivefold and then they reduce it back to half of that and then claim they are cutting the deficit in half. That is like taking six steps back, three steps forward, and saying you are making progress. You are not making any progress. They are so far out of whack with what has been the historical norm that it is not even acceptable. The deficit they ended up with after taking six steps back and three steps forward is still in the 4-percent range. It is still throwing debt on the books at a rate you cannot afford, and it is absurd to claim that is fiscally responsible.

Well, before I get into what we would do, I will mention a couple of gimmicks that are played here because they are beyond the shell game gimmick, which is pretty outrageous--moving around $1.1 trillion so they don't have to put it on the budget. They take it off budget, essentially, so they can look as if they are doing better than the President, even though they have the exact same policies and numbers as the President, for all intents and purposes.

They do a couple other things. They have reserve funds--lots of them. This is a way to make like you are doing something that is fiscally responsible by saying: You cannot spend this money unless you can pay for it. The only problem is that they make the reserve funds in the most critical area--specifically, health care, which we all know we are going to want to address this year. They create this incredible activity. They put into place a health care reserve fund, which means they are going to rewrite the policy of health care for this country. Every part of this Nation is going to be affected.

You heard the chairman say that 17 percent of the gross domestic product in this country is involved in health care. The purpose of this proposal--the health care reserve fund--is to address that 17 percent. There is virtually nothing in this country that isn't affected by that. Either everyone is directly affected or a member of their family is or their job is.

There is a rule here called pay-go, which has become the mantra of the other side of the aisle about how they are going to be fiscally disciplined. I never heard anyone from the Democratic party or the Congress, including the President when he was running for President and running for Senate, fail to talk about how they were going to use pay- go to discipline the Federal Government because it implies that they are going to pay for what they are doing. It is a great term, by the way. The only problem is, they don't ever use it. They claim they are going to do it, but they never do. I call it ``Swiss cheese-go'' because there are so many holes in it. In the last 3 years, when the Democrats ran the Congress, they avoided pay-go in the amount of $341 billion in spending.

This health care trust fund is a brazen act of putting a hole in pay- go. Up front, they say we are not going to apply pay-go to health care reform. Pay-go has a rule that says that in the first 6 years you have to meet it, and the second 5 years you have to meet it. No, we are not going to do that; we are going to be able to spend it over 11 years before you have to meet the pay-go rules. Why don't you just give it up and say we are not going to discipline ourselves. There is no pay-go rule, and it is a problem.

The second gimmick that really concerns me--it is more than a gimmick--is a big-time exercise of threatening the prerogative of the Senate and the constitutional purpose of the Senate, which is the use of reconciliation. This is a term of art, and nobody outside the Congress really understands it. Essentially, reconciliation was put into the budget process when the budget was created for the purpose of making sure that what the budget said should be spent or should be taxed actually occurs, so that there was a procedure to reconcile--to say to committees if they exceeded a certain amount of spending and it wasn't inside the budget: You must change that spending; if your tax policy created more of a deficit, you must change that tax policy. It is a procedure which, over the years, has evolved. It has been used aggressively by both President Clinton and President Bush to pursue policies that already exist or to adjust policies that already exist-- whether it happens to be already existing laws on welfare or existing laws on tax policy. Yes, it has been used effectively and aggressively in those areas. But it has never been used to create a brand new policy on something that has as dramatic and all-encompassing and pervasive effect on the American public as to change the entire health care system or something like that. It has never been used to create out of whole cloth, ab initio, a brand new major tax system, such as a national sales tax on electric bills, and its use is solely a purpose of the Senate. The House doesn't need reconciliation.

How does reconciliation work? It basically eliminates the prerogative of the Senate to amend the bill. The greatest prerogative of the Senate is that we have the right to debate, to discuss, and to amend legislation. The House doesn't have that right. The House has something called a Rules Committee, and it is under the control of the Speaker. The membership of the Rules Committee is made up 2 to 1, plus 1, so the Speaker could never lose a vote in the Rules Committee. The Rules Committee sets out for the House of Representatives when a bill comes to the floor--no matter the policy of the bill--and that you will have this many hours of debate and they will allow this many amendments and here is what they are. They can run through a bill in a half hour if they want. That is the way the House has functioned for years. It is the way the House was supposed to function when it was set up constitutionally. The Senate, on the other hand, has no such rule. When a bill is brought to the floor of the Senate, it is open for debate, discussion, and amendment. If you can get 60 votes, you can get it off the floor.

The budget sets up a process to allow the Senate to function more like the House. The budget is on the floor for 50 hours of debate. Amendments are allowed--any amendment, really, but at some point people run out of energy and stop offering amendments--and there has to be a vote.

In order to reconcile parts of the budget, the reconciliation system was set up where there is 20 hours of debate and virtually no amendments because they would have to be germane, and that is a high standard to meet here.

So the reconciliation situation is that it allows you to basically ram through the Senate--as you would through the House--a bill without amendment, discussion, debate, or amendments. It is a huge weapon. If used incorrectly, it fundamentally undermines the constitutional purpose of the Senate. It turns the Senate into the House of Representatives and makes us a body in which amendments are not allowed and debate doesn't occur, of any significance. It has a truly debilitating effect on the idea that you will have a body in this constitutionally structured Government of economics and balances where debate occurs vociferously and aggressively and where problems can be aired out in a more timely and orderly manner than occurs in the House of Representatives. So it should never be used to ab initio create a massive, new program, such as a tax on everyone's electric bill. It should never be used for the purpose of undertaking a major policy event, such as rewriting the health care of the United States, which will affect everybody.

To the chairman's credit, he doesn't have it in this bill. He understands that. He has spoken out fairly effectively on this point-- probably more concisely and effectively than I have spoken on it. But the House of Representatives has put reconciliation instructions in. What earthly reason could there be for the House of Representatives to put reconciliation instructions in their bill? They don't need it; they have a Rules Committee.

It is obvious. This is a game, a very dangerous game. The House puts in

reconciliation instructions but the Senate doesn't put it in because the leadership knows that maybe it cannot get that across the floor and doesn't want a vote on such a thing. So they can take it to conference and, much to nobody's surprise, the conference budget comes back with reconciliation instructions, which control activities on the Senate floor.

It is totally inappropriate that the House should be dictating to the Senate how we are going to legislate and structure our debate system here on the floor and try to make us into the House of Representatives. It is unconscionable in the context of the constitutional structure of our Government. Yet that is the game that is being played here, and it is a cynical game. It is totally wrong. If for no other reason, everyone in this body should not vote for a budget that has reconciliation in it.

On our side of the aisle, we think we can do better. I have talked at some length about the clear and present danger this budget represents to our children because of the massive increase in debt. We don't think that has to be the course of action. You don't have to run the spending of the United States up to 23 percent of GDP, which this chart reflects, way above 25 actually, way above the historical norm. That is not necessary. Short-term spending may be necessary for this significant problem we have with the recession, but you do not have to take the Government and expand it radically, move it to the left, and spend money on what these groups are and constituencies are at this rate. The Government should live within the basic historic norm of 20 percent of GDP as part of its spending. That is where we part ways philosophically.

The President genuinely believes, and the party passing this budget, the Democratic Party, generally believes you create prosperity--and the President said it; he used those terms--you create prosperity by expanding the Government significantly in these different areas of social interest. You do not if you are spending up those areas so much that people cannot afford it.

It does not happen that way. The way you create prosperity is by keeping Government at an affordable level, doing what it is supposed to do while you give individuals the ability to go out and be productive, take risks, and create jobs. That is a difference of philosophy here.

When the President proposed in his budget the way he is going to address health care, where we presently spend 17 percent of our gross national product on health care right now--that is 5 to 6 percentage points more than the next closest industrialized nation, so there is a huge amount of money being spent on health care--he proposes we explode that spending by another $1.2 trillion. We don't have to. We can get every American insurance, and good insurance, without radically increasing the amount we are spending on health care. We can do it by more effectively spending the money we already have in the health care system.

If you are spending 17 percent of the gross domestic product on health care, you do not have to take it up to 18, 19, 20 percent. In fact, if you do, you are probably not getting much efficiency out of it. Rather, spend more efficiently the money you are already spending.

We believe as a party that everybody has a right to decent health care insurance, and we also believe as a party we can do that within the context of the money that is already available by being more efficient, by giving people more choices, and by not putting the Government between patients and their doctors. We do not believe in nationalizing the health care system, which is basically what these numbers are, the stalking horse for, that the President is proposing.

In the area of energy, the President's answer to energy is that you put in place a new national sales tax, as I have mentioned before, on every electric bill in this country, everybody's electric bill, so that when you turn on your light switch you get hit with a new sales tax. That is probably not going to produce a whole lot of energy. It is going to probably undermine the productivity of our economy, and it certainly is going to ship a lot of jobs offshore.

The way to produce a better energy policy is to look in an environmentally sound way for more American supply and you can conserve more energy. So we drill, and we can drill in an environmentally sound way in identified offshore areas and produce more American energy. You create more powerplants through using nuclear power, a totally clean form of energy from the standpoint of pollution to our air. You use wind, solar, and other alternatives, but you acknowledge the fact that you cannot possibly get to the goal we have to get to, which is enough energy to continue to maintain our international competitiveness as a nation and continue our prosperity as a nation, if we are just using solar and wind.

Solar and wind make up 2 percent of our national energy supply. If you triple it, you only get 6 percent, and tripling it would be a little difficult because there are a lot of people who do not want windmills in front of their houses, whereas nuclear can be expanded, whereas we can drill and find more American energy more effectively, whereas we can use oil shale, which we have more of than Saudi Arabia has oil, to produce energy more effectively, and we can be more conservation minded, and there is agreement on that, obviously, on both sides of the aisle. But you do not accomplish this by sticking the American people with a brand new national sales tax.

In the area of cost discipline, clearly we do not have to run up spending at these rates. We should bring them back down, and the way you bring them back down is by addressing entitlement spending.

This budget that was sent up by the President of the United States, who claims he is interested in fiscal responsibility--although, obviously, it is sorely tested by the numbers in this budget, these trillions of dollars of new debt--does not, on net, reduce the entitlement accounts. He does suggest that Part D premiums be paid for in part by wealthy people. I agree with that. We have actually offered that amendment on our side of the aisle for the last 2 years under this Democratic Congress and were beaten every year on that proposal. I am glad the President is on our side this time. Maybe we will be able to adopt it. It is called the Ensign amendment.

The fact is, unless you have a comprehensive approach to disciplining entitlement spending so it is affordable, and we continue to deliver reasonably good quality care and support to senior citizens, we are not going to get these spending issues under control. You cannot kick this can down the road, as the President has said. You have to start, and the President has not started now. This budget has nothing in it to that effect.

In one other area where we would do something significantly different is defense. This budget basically assumes a declining funding of defense for the next 10 years that is significantly less than what is presently funded as a percentage of GDP.

We are at war. I wish al-Qaida was going to go away. I wish these folks who represent such a huge and immediate threat to us, especially if they get their hands on a weapon of mass destruction, did not exist, but they do. They do exist, and they are a threat--a very significant threat. We cannot confront them through goodwill because they are not interested in goodwill. We have to confront them with a military that is properly funded, properly cared for, and properly armed. That, unfortunately, takes money.

The first obligation, the first absolutely most important obligation of the Federal Government is national defense. Yet this budget, first, does not include sufficient funding for the President's war costs and, second, as a practical matter, it simply assumes that you can run the military on the cheap, I guess, and that is a big mistake.

We do have differences, as Chairman Conrad has said, over how this budget is structured. They come back to this very core issue of debt, of what we are leaving our children, what we are passing on to our children. It is simply not right for one generation to give another generation less than what we received from our parents.

We, as a nation, have always--always--had the older generation pass to the younger generation a better, stronger, and more prosperous nation. Yet we are now on a pathway, if this budget is followed forward, where the debt and the deficits will be so high

that our children will not be able to have as good a life as we have had. The cost of maintaining this Government will so burden them their ability to finance a home, buy a home, send their kids to college, or just live a lifestyle that is something of the level and enjoyment and prosperity that we have had will be seriously--seriously--threatened. It is not fair to do that, not fair for one generation to do that to another generation. Yet the numbers do not lie.

I understand the Democrats did not want to show us the second 5 years of the budget. They hid it, along with a lot of other things they hid, in this budget, but the President showed us the second 5 years of the budget. Every American should take pause because when you see the debt go up by $9.2 trillion, when you see the public debt ratio to GDP go to 80 percent, when you see deficits annually of $1 trillion a year on average for as far as you can see, when you see a deficit rate of 5 to 6 percent of GDP, you are talking about a country which is headed toward a fiscal crisis the likes of which we probably have not seen since the Great Depression. It is a country which cannot afford its Government. It is a nation that will be passing on to its children significantly less than was passed on to us.

Mr. President, I yield the floor.

I suggest the absence of a quorum.

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

Mr. President, I ask unanimous consent that for the remainder of this debate on the budget over the next 50 hours, the time be equally divided under a quorum call.

I suggest the absence of a quorum.

Madam President, we are awaiting a speaker, but while we await the speaker, who is on his way--I think Senator Specter is coming--I want to respond to a couple of points by the Senator from North Dakota.

He quoted me, with a huge chart--I always appreciate that, get my name out there; my eloquence is once again reestablished--but it is regrettable that he didn't continue the quote. The point I made in that was that in the short term there is a necessity to spend money because the Government is the last source of liquidity right now, and we need that in order to try to get the economy going. But what is inexcusable about this budget is that in the years 2011, 2012, and beyond spending continues. It goes down from 28 percent to 23 percent and then it starts to go back up to 23, 24, 25 percent of gross domestic product. It is spending done entirely by deficits--an average of trillion-dollar deficits over the next 10 years under the President's budget.

The point is, of course, you may have to spend now. We do have to spend now. The spending is not done that well. It was a total misappropriation of money. The stimulus bill was just walking around money for different interest groups in which the appropriators happen to have a vested interest. Legitimate. Most of them were very nice groups. But most of them didn't stimulate the economy. But after the stimulus event is over and the recession has abated, to continue this level of spending is unconscionable. It creates a debt that our children will have to bear, a debt that is unfair to pass on to them.

My point, of course, is, as we move into the out-years we have to try to rein in spending, try to control spending because the issue is spending. That

is the bottom line. The problem is spending.

So you have this budget that has been proposed which is dramatically increasing the size of the Government intentionally. The President said he wants to do that. He said: I intend to create prosperity by expanding the size of the Government. He does it through creating a massive amount of debt--$9.2 trillion of new debt over the next 10 years, running the size of the debt as a burden on our economy up to 80 percent of gross domestic product--which is not sustainable and which will basically throw us into a situation where our children will not be able to afford the Government that is being passed on to them.

So when the Senator quotes me--and I appreciate him quoting me--I wish he would continue the sentence or continue the paragraph or the thought because it is the rest of the thought where the issue lies. The issue doesn't lie in the short term; the issue lies in the long term. The issue lies in what we are passing on to our children. The issue lies in the fact that under this budget, as brought to us, the debt and the deficit are exploding at a rate that no country can support. None. It creates financial hardship for this Nation if we continue down this path.

On another point, the Senator from North Dakota continues to bring up these charts about how they are bringing their deficit down below 3 percent, and the President has his up at 4.5 percent. The 4.5 percent is not sustainable. Everybody agrees with that. And 3 percent of the gross domestic product is barely sustainable.

How do they get there? They get there by simply using the old- fashioned shell game around here, which has been used for years, which is not putting on the budget that which we absolutely know is going to occur. At least the President had the decency and forthrightness to put into his budget these things we absolutely know are going to be spent on.

They claim with these reserve funds: ``Oh, we are responsible by doing reserve funds.'' That is a totally disingenuous statement. The President knows these reserve funds are not legitimate, and that is why he didn't use them. He put it in the doctor's fix and scored it. They put in a doctor's fix and don't score $90 billion, approximately. It is a significant amount.

The President said we are not going to have AMT; we are going to have a permanent fix on AMT. For 3 years this budget that is brought to us doesn't score AMT as revenues, but for the last 2 years it scores it as revenues. Why do they take these revenues even though we know we are not going to get them? So they can make their numbers look better, get below this 3 percent level, which is just a game.

Health care: The President in his budget says health care in his reform is going to cost about $400 billion over these first 5 years. Is any of that in this budget? None of it. A reserve fund, which is not even subject to pay-go, is used in order to mask that number. That helps to get below the 3 percent.

I mean, it is the use of the old gimmicks, the things which we at least respect the President for having come forward and saying: They are gimmicks, and therefore I am not going to use them. So just lay the President's numbers over this budget, and you get the exact same budget. When Peter Orszag, Director of the OMB, said there is 98 percent identity between these budgets, he was right and the practical effect was right.

The budget that was brought to the Senate floor is a profligate budget. It is a budget which basically goes out and spends at a level of 22 percent of gross domestic product for as far as the eye can see and generates revenues of 18 percent, 18.5 percent if they are lucky. That is after they raise taxes on the alleged wealthy--the small businesspeople of this country, the people who create the jobs--after they have hammered the small businesspeople who create jobs with a $1.4 trillion tax increase, hit us with a national sales tax on our electric bills, taking all that money and not using it to reduce the deficit at all, just use it to expand spending--after they have done all that, they have this huge gap which runs up debt, debt which is going to be unsustainable and unaffordable for our children.

It is certainly not appropriate. But at least the President was honest about it and straightforward and did not use a bunch of gimmicks to try to hide it so we could have an open and fair debate about it.

Unfortunately, that is not the case in the budget that is brought forward here. It is a budget which uses these games. Games which for a long time, have been used too often. I probably used a few of them when I was chairman.

But it is about time, since we have a President who is willing to come forward and say: This is the way it should be done, that we follow his lead and at least have the integrity to say he was right when he was transparent.

I yield the floor.

Not to belabor the point, but if they are so devoid of gimmicks, why did they waive their own pay-go rule in the health care reserve fund? I mean, on the face of it, they lost the argument. It is their budget. It takes the pay-go rule and emasculates it, and it is their pay-go rule. They are not making them subject to their own rules of fiscal enforcement in their own budget.

So, yes, gimmicks are replete. That is just one of them. The alternative minimum tax, that is a gimmick. They know they are not going to get the revenues from AMT. They score the revenue numbers from AMT in the last 2 years. That is a total gimmick. Everybody knows that is a gimmick here. We do not account for TARP II. Now, maybe they are not going to support their President on TARP II. They do not account for it, so I guess they figure the President does not need anymore money for assisting the financial stress the country is under; the President does. We do not account for it.

Disaster costs. How do you eliminate disaster costs in the budget and claim it is not a gimmick? We all know there are disasters to fund. My goodness gracious. Clearly, there are disasters that are going to require significant funding. In an attempt to be forthright on that, the President put in a number. Taken out of this budget. Why? Because they wanted to get under this number, 3 percent.

Nothing to do with whether disasters are going to occur or not occur over the next 5 years or whether we are going to spend money on them over the next 5 years. It was purely an accounting gimmick, nothing more, nothing less than an accounting gimmick.

Health care reform. The President's own budget scores it at $372 billion. Do you think this Congress is going to step up and say to the President: Oh, we are going to pay for this, even though you do not think we should pay for it. I doubt that. I mean, another gimmick. The President was at least forthright and said it was going to cost $372 billion, and he put it in his budget. Why are they not paying for it on the other side, not because they do not think it is not going to be there, this cost, but because they want to get under this 3 percent.

Interest. My goodness. How do you gimmick interest? Well, they did it. They are not accounting for the interest, which these expenditures obviously incur. Interest is a pretty stable number. You are either going to get it and have to pay for it or you are not. The fact is, the goal was to look better than the President, even when you were doing exactly what the President wanted you to do.

It is pretty hard to come here with a straight face and claim your number is significantly different than the President's. It would be nice if it were. I wish it were. I wish it were. But it is not. What it all leads to is a massive amount of debt--a massive amount of debt. Even 3 percent is not sustainable. But, certainly, the real number, which is 4 to 5 percent, is clearly not sustainable. Even 60 percent, is not sustainable, which is the number they claim they get to. I mean, that is not sustainable. That is not an acceptable number, and, in fact, would not even get you into the European Union, it is so unsustainable.

But it is not the real number, 80 percent is the number, 80 percent of public debt to GDP. That is the projected number.

So these numbers are staggering. They should give everyone pause and cause them to say: What are we doing here? What are we doing to our kids? To our Nation? Are we going to hand them off to a country that is so deeply in debt, that is running up debt at such a significant rate, or are we going to try to kid our kids and say: Oh, well, you know, we--those numbers are not real. You are not going to get stuck with these numbers and this amount of debt.

We know we are going to stick them with these numbers and this amount of debt. I hear all about this--we have all heard this almost interminably now: Well, the last administration did this, and the last administration did that. I would point out that this Congress was controlled by the Democratic Party for the last 2 years.

So it was not just the Republican President, it was the Democratic Congress that was spending money. I have never been one to be very--to have defended the last President on the issue of spending because I thought the Presidency did not do a very good job on spending. I voted against most of the things that were passed around here that spent money.

The Part D premium, which was the worst example, $8 trillion unfunded liability. The agriculture bill, massive expansion, inappropriate. Done. Highway bill. Massive expenditure, $26 billion dollars of earmarks.

So, yes, there was failure to discipline the budget on the spending side of the ledger in the last Presidency. But there was an accomplice around here. It was called the Democratic Congress. Now, regrettably, we have a President who said very openly, he is going to spend money, and a lot of it, to promote prosperity by expanding the size of Government on all these different accounts which he deems to be worthy.

I imagine they are worthy. The only problem is we cannot afford them as a culture or as a government because the cost to our children will be a debt they cannot bear. You can try to pass a budget that covers that up through games and darts and gimmicks and shell games and various little exercises in redoing the accounting rules, such as changing pay-go.

But in the end, we all know what it is going to lead to, which is a deficit and a debt that is not sustainable and a nation put at risk as a result of that.

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

Mr. President, at this point, I yield to the Senator from Iowa, and I ask unanimous consent that upon completion of his statement, unless the Democratic membership has a speaker to intercede, the next speaker be the Senator from South Dakota, who will be recognized to offer the first amendment, which I understand on our side is going to be acceptable.

Yes.

Mr. President, I yield the Senator 6 minutes.

Mr. President, I wish to congratulate the Senator from Alabama, who has always succinctly and effectively described what we are confronting here, which is a wall of debt, a massive wall of debt, which will overwhelm our children. So I thank him for his statement.

At this point, I think the chairman had some comments on proceeding.

I rise this morning on behalf of Kathy and myself to express our deepest sympathies to the family of CPL Michael Ouellette. Corporal Ouellette died in Afghanistan last week, and his funeral is today. I have spoken with his mother, and, of course, he was an exceptional individual. These young men who serve us in the military are all exceptional. He served two tours of duty in Iraq, was decorated, and then went to Afghanistan to serve again.

On behalf of the people of New Hampshire and our Nation, I thank his parents for having raised such an extraordinary child. We appreciate and thank them for the service he has given this Nation, and we obviously express our deepest concern during this extremely difficult period.

Mr. President, on rollcall vote No. 115, I voted ``nay.'' It was

my intention to vote ``yea.'' I ask unanimous consent that I be permitted to change my vote, which will not affect the outcome.

Mr. President, I wish to speak and continue the discussion which was raised by the Senator from Tennessee and the Republican leader earlier on the issue of where the budget that has been proposed by the President is going to take us. There are a lot of concerns raised by this budget.

Most of us have been willing to say we understand the President has inherited a very difficult financial situation; that, therefore, we accept the fact, in the short run this year and for much of next year, potentially a lot of money is going to have to be spent very quickly in order to try to refloat the economy. The Federal Government is the only place where there is liquidity right now, and that liquidity is being used aggressively to try to get the economy going again.

The problem the President's budget has is, as we get past this next year, year and a half of recession and we get further down the road in his budget, the budget he has sent up to us continues to dramatically increase spending, dramatically increase borrowing, and dramatically increase taxes.

As we get into the third and fourth year of this budget, instead of seeing the numbers come back down to something that is manageable, we see a deficit running in the 4- to 5-percent range of GDP. We see a public debt-to-GDP ratio in the 60- to 80-percent range. These are numbers that cannot be sustained. They add up to massive debt.

This chart shows the situation in fairly stark terms. Historically, the national debt has been around 35 percent of GDP. That is a sustainable level. I think if you talk to most people in the economic area, they will say a government can do quite well if its national debt can be contained at that level.

Unfortunately, under President Obama's proposal, that debt goes straight up, and by the end of the 10-year window which his budget covers, it is at 80 percent of gross national product. That is not sustainable. That essentially means we are putting on the books a debt which we have to pay as citizens of this country, which is unaffordable for the citizens in this country. It has a lot of practical implications which are all very serious and about which we should be concerned.

The most obvious is that when we run up this much debt, somebody has to pay it and that means our kids and our grandkids. They are going to have to pay this debt off. Instead of maybe being able to buy a house, send their

kids to college or live the lifestyle our generation has lived, they are not going to be able to do that because the debt burden on them is going to be so high that burden will overwhelm their ability to live the same quality of life that we have.

Equally important is the effect it probably will have on the value of the money of the United States, the dollar. There are only two ways you can handle it when you run debt up such as this. Either you dramatically raise taxes--and you basically make it virtually impossible for Americans to be productive if you raise taxes as much as this debt would cost to pay off--or you do something called monetizing the debt, which is a technical term for creating inflation. Inflation is a pretty big evil. If you get on a course of inflation, you quickly go into a spiral that is downward as a nation and as an economy. This debt on this present path, as proposed by the President, will lead us to that spot.

There is another problem this creates, equally significant and about which we are already hearing, and that is, for people who are observant and people who look at our Nation, especially if they are lending us money--and the whole world is lending us money, especially the Chinese--they look at our debt and they say: Is it manageable? Can the United States maintain this level of debt and still be a productive country, still be able to be prosperous?

There are beginning to be signs of people saying: No, we are not so sure that is true. We are not sure that is going to be the best thing to happen. So the value of the dollar starts to change and gets decreased. Equally important, people become restive about buying our debt, about financing this great spending spree which this administration has proposed by lending us money. In fact, we have now heard two major statements from the Chinese leadership. The Premier of China has specifically said that he is concerned about the value of his investments in the United States. Remember, China holds the majority of our debt. Now we see, from Mr. Zhou--I believe that is how he pronounces his name--the head of their Federal Reserve, essentially that they are so concerned about our debt situation and our lack of management of our fiscal house that they want to change what is basically known as the world currency reserve from dollars into some other currency. They are suggesting it be something controlled by the IMF, a currency produced by the IMF. That is not a vote of confidence in where we are going as a country by our biggest creditor.

It is unfortunate, very unfortunate, that we have to listen to the views of China and take them seriously on this issue. It did not used to be that way. But, regrettably, whether we like it or not, as we run up all this debt we have to find somebody to buy it because this debt is operating our Government and we as a nation do not have the wherewithal to buy it, we have to sell it to other nations, and the primary nations with currency reserves today are China and Russia and some of your oil-producing states in the Middle East. These are not necessarily nations which are all that sympathetic to our problems, especially when our problems are fairly self-inflicted--and by self- inflicted, I mean this administration has sent up a budget which dramatically increases spending and dramatically increases taxes at the same time it borrows a huge amount of money.

Trying to put this in real-world specifics, if you take all the debt that has been run up in the United States since our Government started, since George Washington--he is over here--through all the Presidents, including George W. Bush, the amount of debt they have put on the books of the American Government, the amount of debt they put on our backs as American taxpayers is $5.8 trillion. In the 10-year budget President Obama is suggesting, he is going to double that number. Essentially, President Obama's proposal puts more debt on the books--actually, in the first 5 years of his administration--than has been put on the books since the beginning of our Government through George W. Bush. That is how quickly and massively the debt of the United States expands under this budget.

At the same time, the tax burden increases significantly under this budget. There is $1.8 trillion of new taxes proposed in this budget. I understand it is the philosophy of the Government that now is the majority in this Congress and in the White House that Americans should pay more taxes. I understand that. I do not happen to agree with it. I think the American people are not undertaxed. I think basically we are a country that has some problems, but they primarily go to overspending. But even if you accept the fact that we have to raise taxes on the American people, which is what is proposed in this budget--there are two major tax initiatives. One would hit small business and one would hit every American. We call it the light switch tax or the national sales tax on energy. You would presume that they would take those revenues and, as good stewards, use them to try to reduce this deficit we are facing which is driving this debt up. But, no, that is not what happens here. They take all these revenues and they use them to expand the size of Government, so Government grows dramatically.

Of course, they have now used up the resources which you might be able to use to try to bring this debt down for the purposes of increasing the size of the Government. They are increasing the size of Government so fast that even though they have the largest tax increase in history built into this budget, their spending increases so much quicker than that, the debt skyrockets.

President Clinton when he came into office raised taxes significantly, too, because that was also his philosophy, but he took those tax dollars and used them--in conjunction, at that time, with a Republican Congress--to reduce the deficit and reduce the debt of the United States. That was proper. If you are going to raise taxes, that is what they should be used for. You should not use them to explode the size of the Government.

Where is this Government explosion occurring? Primarily, the President has proposed to take the spending of the Federal Government, which has historically been about 20 percent of the gross national product, up to 23 percent of the gross national product. That spending increase is not for the short run. In the short run, he takes it up to 28 percent. That spending increase begins in the second and third year of his budget and it goes on forever--23 percent, actually creeping up every year, spending by the Federal Government. Over the last 40 years, the Federal Government has only spent about 20 percent of gross national product. That difference between 20 percent and 23 percent on our economy is a massive increase in spending. The amount of deficits run up because of that spending over the next 10 years will be over $9 trillion.

Just the interest on the Federal debt in the year 2018, as a result of this huge explosion of spending which is proposed in this budget, will be $816 billion. That is just the interest on the Federal debt. Put that in perspective. In that same year, we will be spending less-- around $700 billion--on national defense. So we will actually be spending more on financing the deficit and financing the debt than we will on national defense. In the same period, we will be spending probably somewhere around $100 billion on education, if you include Pell grants and student loans. So we will be spending maybe eight times what we spend on education on financing this debt. That is money that is being sent out of the United States. Hopefully, people will still be buying our debt. But it is money being sent out of the United States to people who own our debt. This is just out of control.

Some people have been saying the Republicans are being terrible naysayers about this budget. Yes. Yes, we are, because one generation does not do this to another generation. It is not the tradition of our Nation that one generation goes out and borrows massive amounts of money which have to be repaid by the next generation at a rate which can't be afforded by the next generation and then turns the country over to that next generation and says: Here, we are going to give you a country which has less opportunity for you than we received from our parents because this country is going to have such a huge debt burden on it as a result of all this spending and all this borrowing, and the taxing, which doesn't go to basically reduce the deficit at all; it goes to expand the size of the Government.

It is not fair, really, for us, our generation, to do that to the next generation. That is why we suggested--OK, we will accept the fact that in the short run, over the next 2 years, there is going to have to be a spike in Federal spending and in the debt. But after that occurs, let's get back to what is an orderly process. Let's get back to numbers which are acceptable and responsible. Let's bring the public debt down from 80 percent of GDP, which is where it is when we get out here in 2016, 2011, and that period--not too far away--down to 40 percent of GDP, where it has historically been, down here. Let's take the deficit down from 4 and 5 percent down to 2 percent, which is where it historically has been. Let's put in place responsible policies, not take the spending up to such levels that they simply cannot be afforded because of the amount of debt that goes on the backs of the American people that becomes grossly excessive and unaffordable. This is not an unreasonable request. We are not suggesting that the administration trim its sails this year. We are suggesting that in the outyears there be a responsible budgeting process around here that leads to a fiscally sound policy.

Why do the Chinese not have confidence in our currency? Why are they talking about changing from our currency? Why are they asking whether they should continue to invest in our debt? Because they don't see any policies coming down the pike from this administration which discipline in any way or limit in any way the spending of the Federal Government. Just the opposite--it is an explosion of spending on the entitlement side by over $1.2 trillion and an explosion of spending on the discretionary side by almost $1 trillion.

If we did something constructive around here such as set up the process--which I proposed along with Senator Conrad, and many people in this Chamber support--which would put in place a disciplining event on our entitlement spending, then these different nations would look at us--and our people could say: Listen, Congress is serious about getting this under control in the outyears. They are not going to pass this massive debt on to our kids. They are actually going to try to put in place some systems to try to address this.

But nothing like this is happening. This budget has none of that in it. Instead, this budget simply expands the costs of the Government and the borrowing of the Government, and then it raises taxes and spends it instead of using it to reduce the size of the debt. It is a policy which is not sustainable.

The term ``not sustainable'' is used around here occasionally. What does it mean? Basically it means that when this policy comes to its fruition, after this budget is passed--and it will pass. The simple fact is, it needs 51 votes and there are 58 Members on the other side. It is going to pass. After it passes and the policies underneath it come in place, the term ``not sustainable'' means we are going to pass on to our kids a government they cannot afford and which will reduce the quality of their life and which may put at risk the value of our dollar and the ability to sell debt, according to the people who are buying it right now, the Government of China.

This is serious. This is very serious. We need to take another look. We need to reorient. We need to sit down and say: How can we do this better? How can we make this work better? How in the outyears--and it is not that hard in the outyears--so we start to close these numbers on the deficit and bring down this rate of growth in debt so that it flattens out? How can we do that?

We are ready to do that on our side of the aisle in a bipartisan way, whether it is something like the Conrad-Gregg bill or something in the area of entitlement reform or whether it is a freeze on discretionary spending as we move into the outyears; whether it is, if you are going to raise taxes, using those taxes to reduce the debt rather than expand programs; living within our means in the area of health care. We are willing to look at all those ideas because if we do not, basically we are going to pass on to our kids a government that will fail them and a government that will obviously not give them the lifestyle that they deserve and that one generation should pass on to the next generation.

I yield the floor.

Mr. President, the spiraling cost of health care represents a

growing financial crisis for many Americans who either cannot afford quality health care coverage or are struggling to keep the insurance they currently have. When combined with the aging of our population, health care costs are driving the country's long-term fiscal challenges, challenges which we must address in a bipartisan way.

Unfortunately, many proposals being offered to achieve universal health care coverage are pushing us toward a system based on expansive government control, which will eventually lead to rationing, a reduction in the quality of care, and increased health care spending. That is absolutely the wrong way to go.

So, today I join Senator Wyden and Senator Bennett as a co-sponsor of the Healthy Americans Act, bi-partisan legislation to overhaul the nation's health care system, in an effort to make quality, affordable health insurance available to all Americans.

I congratulate Senator Wyden on his leadership in advancing this cause and pulling together this strong bipartisan blueprint that goes a long way towards empowering consumers and the private market to extend health care coverage to all Americans.

In addition to the private market approach to expanding coverage, the bill attempts to reduce the growth in health care spending by providing incentives for preventive health care, wellness programs, and disease management, as well as a stronger focus on health care cost containment measures. These measures include lowering administrative costs and focusing on chronic care management, health information technology and medical malpractice reform as tools to control costs.

In addition to his commitment to enact comprehensive health care reform in a budget-neutral manner, I also would like to commend Senator Wyden on his willingness to work with me to make improvements on last years' proposal. In particular the removal of the Medicare part D price negotiation language, the enhanced language to ensure stronger state flexibility, and the elimination of the non-health related tax provisions are strong improvements to the bill.

I look forward to working with the Senator to make further improvements as well. As I have told the Senator from Oregon in the past, I have some serious concerns about several elements of this plan, including the imposition of mandates; subsidies for higher income individuals; the impact on current market competition; the FDA labeling language regarding comparative effectiveness studies; and the issue of how to determine the appropriate level of coverage offered as part of a health care reform regime.

As you know, the bill uses the Federal Employee Health Benefit Plan, FEHBP, Blue Cross Blue Shield, BCBS, standard plan as he actuarial equivalent for the Healthy Americans Private Insurance, HAPI, plans. As the bill moves forward, our goal should be to create a more cost- effective benchmark that focuses on preventive care and core health care services to encourage greater individual responsibility on over- utilization of care.

I appreciate Senator Wyden's comments and I am hopeful that by joining forces with colleagues on both sides of the aisle on a private market approach, we can begin a bi-partisan dialogue, work through our differences, and find workable solutions that will result in a better health care system for all.

Mr. President, I listened this morning to President Obama as he spoke on the budget. In attendance with him were the chairmen of the Budget Committees in the Senate and the House, Chairman Conrad and Chairman Spratt. Essentially, the President was defending his budget, as proposed and sent up here to the Hill.

His theme was we should not pass on problems to the next generation. Thus, he said, his budget took on the issue of energy and took on the issue of health care as being core questions that need to be resolved now and not be passed on to the next generation. I could not agree with him more--first, that we should not pass on problems to the next generation, and, secondly, we should take on the problems we have today. And they are fairly big.

Where I disagree with him is the conclusion that the budget he sent up here does not pass problems on to the next generation. In fact, it passes the most significant problem on to the next generation, which is that it so greatly expands the size of Government in such a short period of time with so much borrowing that it basically will bankrupt our children and our children's children as a result of the cost of Government going forward.

People do not have to believe me to recognize this. All they have to do is look at the President's budget. In 5 years, the President's budget will double the national debt. In 10 years, the President's budget will triple the national debt. To try to put this in perspective, if you take all the debt the U.S. Government has run up since the beginning of our country--from George Washington all the way through to George W. Bush, that total amount of debt--in 5 years it will be doubled under this budget, as sent up by President Obama.

Now, a lot of that debt that is being run up in the short run I am not going to claim is inappropriate in the sense that it is something that is under his control or that he is responsible for as President. In fact, I agree that we as a nation need to expand our spending as a government in the short run in order to try to address this recessionary period, and specifically to try to stabilize our financial situation, our financial system. I do not happen to agree with the stimulus package which was passed. I do not agree with the omnibus package which was passed. They were both profligate and unfocused, money being spent inappropriately and inefficiently. But I am willing to accept the fact in the short run there has to be a spike in our national debt in order to address this recession.

What is not tolerable, however, is that under this budget, after the short run--after this period from 2008, 2009, say, through 2011, when the recession, by all estimates, will hopefully be over--we will still be running the debt up radically, as sent up by this President. In fact, it doubles in 5 years, but it triples in 10 years, which means there is--I am not aware that a recession in the last 5 years of this budget is being proposed; I certainly hope it is not being proposed, but certainly there is nothing that requires that type of a radical expansion in our debt over that period.

The practical implications of this doubling of the debt are that by the time the budget gets into the year 2013, the public debt of this country will be, as a ratio of GDP, 67 percent of GDP. I suspect when CBO scores the President's numbers at the end of this week it will probably be close to 70 percent of GDP. What does that mean? Well, try to put this in perspective.

Prior to the recession, our public debt--that is the debt held by people such as the Chinese, for example, and the Europeans--our public debt--the debt which we sell to the world in order to finance our Government--was about 40 percent of our gross national product. That is an acceptable level. Most economists will say we can tolerate a debt to gross national product ratio of 40 percent. But when it gets up to around 70 percent, when it gets over 60 percent--when it gets into those numbers--it is not tolerable. You might be able to tolerate it for a little while, for a few years, but you cannot tolerate it for an extended period of time. What the President is proposing is that 67 percent of public debt to GDP ratio--which will be over 70 percent, I suspect, when it is rescored that goes on forever.

In addition, the deficit, beginning in the year 2012, under the President's budget, will be at 3 percent to 4 percent of gross national product. Now, historically, over the last 20 years--prior to the recession--the deficit has been around 2 percent of gross national product. Why is it important to keep that down? Because every time you run a deficit, you add to the public debt. When you get into the 3- to 4-percent range of annual deficits as a percentage of GDP, you are essentially adding so much debt so quickly every year that basically your Government becomes unaffordable. That is the bottom line here.

What happens, as you go into the outyears when you triple the debt and keep the deficit at around 3 percent or 4 percent of GDP the currency starts to be under pressure. The dollar becomes questioned as to its value. People start asking, especially in the international community: Do we dare buy American debt? In fact, you heard, regrettably, the Chinese Premier raise that issue already. If you cannot sell the debt and you cannot finance the Government, you do not have too many choices. You must move to inflation. That is not a good choice for Americans.

So basically what you are putting in place is a structural debt and a structural deficit under the President's proposal which simply is not affordable, which means our children are either going to be overwhelmed by a tax burden or they are going to find a country where inflation is rampant or basically the standard of living has dropped significantly.

Why does this all happen? Well, it happens primarily because under the President's budget he is taking spending up radically. Sure, in the short run that may be acceptable because we are trying to address this recession. But he does not bring spending back down to its historic levels.

This chart I have in the Chamber shows you that the historic level of spending of the Federal Government has been at about 20 percent of gross national product. We have been up and down around 20 percent for years. But under President Obama's proposal, he radically moves the Government to the left, greatly expanding the Government role in all sorts of areas: in energy, in health care, in education. As a result, he takes Federal spending up to 23 percent of gross national product and keeps it there for as far as the eye can see and revenues stay down at about 19 percent, so you have this big structural deficit in here.

Even if you were to take revenues up to 23 percent of gross national product, the practical effect would be that you would be wiping out most people's incomes with taxes. The President says he is only going to raise taxes on the wealthiest in America. That, first, is inaccurate because he has put in this proposal a massive carbon tax, which is basically a national sales tax on electricity, and every time you turn on your electric lights, you are going to end up with a new tax, a new national Federal tax. But independent of that, he cannot get this debt under control with this type of spending level unless he radically increases the tax burden on working Americans--all Americans--to a point where basically productivity would drop significantly in this country, and that would be a self-fulfilling event, of course. Once productivity drops, your revenues drop, and you never get back to an efficient marketplace and, therefore, you probably aggravate the deficit.

But the problem is, this huge debt he is running up and passing on to the next generation--this tripling of the Federal debt, about which he says: We do not pass problems on to the next generation--this is a pretty darn big problem that is being passed on to the next generation--is driven almost entirely by spending, spending at the Federal level, which he greatly expands.

Under the proposal which he has put forward as a blueprint--this budget proposal--his way of solving the health care problem is to essentially nationalize health care. His way of solving the educational problem is to essentially nationalize the student loan program. His way of solving the energy problem is not to produce more energy in America, it is basically to significantly increase the cost of energy in America to all Americans by putting in place a carbon tax, which is a national sales tax.

His way of addressing the issues which we confront, which are reasonable, philosophical approaches, is to significantly increase the size of Government and, thus, the cost of Government and, thus, to create this huge debt, this massive debt, which we are not going to be able to finance and which is, therefore, going to threaten the economic strength of our Nation and clearly give our children something less than we received. Therefore, when he says he is not going to pass the problems on to the next generation, the exact opposite is true. He is creating a huge problem for the next generation in the way he wants to spend this money.

Now, there is a second issue I want to address today. That goes to the issue of the substance of the points made today at the press conference. This could be addressed, of course--this issue of spending and those questions regarding these major public policies--if he wanted to reach across the aisle and approach things in a bipartisan way.

Senator Conrad, the Chairman of the Budget Committee, and I have proposed an idea calling for a commission with fast-track authority which essentially would talk on the big issues which drive this spending problem--health care, specifically; Social Security, also; and tax policy--and would allow us, in a bipartisan way, to come forward and grapple with these issues and put forward ideas as to how to solve them and bring under control these numbers so they are affordable and so we do not run up this massive debt on our children. That is a bipartisan initiative which I am totally committed to.

In the area of energy, there are a number of bipartisan initiatives which make sense. But we are now hearing that rather than proceeding on a bipartisan path to try to address these issues, they are going to think about using something called reconciliation. That is a term of art around here. Most people do not know what it means. But what it essentially means is that you say here in the Senate that the Senate will function as an autocracy, it will function like the House of Representatives, that you will have the ability to bring to the floor a bill which will not essentially be amendable and which will only take 51 votes to pass.

Reconciliation was a concept enacted as part of the congressional budget process, and its use has evolved. Its purpose was to reconcile the budget. In other words, if the numbers on spending around here did not meet the budget, then there would be a bill to correct that, so that if the appropriations numbers were not correct or the entitlement numbers were not correct or the tax numbers were not correct, there could be a bill that comes through called reconciliation, which would follow the budget resolution.

Sometimes over the years, it has been used in an aggressive way. It was used to adjust already existing programs--authorized programs, entitlement programs, and tax proposals. President Bush used it aggressively on taxes. In 1997, President Clinton used it aggressively, along with a Republican Congress, on everything--entitlements and taxes--but it was always directed at existing policy and adjusting that policy. In other words, we were raising the tax rate or dropping the tax rate, changing an entitlement program in some way that already existed or not changing an entitlement program.

Reconciliation has never been used for the purposes of putting in place a dramatic new Federal program which will fundamentally shift the way the Government functions in this country. It has never been used in the sense of an ab initio event or program.

The carbon tax--or, as I call it, the national sales tax on electric bills--is a massive exercise in industrial policy, totally redirecting how energy is produced in this Nation and affecting everybody in this Nation because everybody's energy bill will be increased as a result of this tax, especially in the Midwest and in the Northeast. It is a brand new program--something we have never seen before. It is a huge program. Obviously, rewriting the health care system of this country is a dramatic exercise affecting absolutely everyone in this Nation at all sorts of different levels. It is a brand new, major program. These are initiatives of significant size and import. Reconciliation was never conceived to undertake those types of events, those types of initiatives.

You can't bring to the floor of the Senate a bill which totally rewrites the way people produce and pay for energy in this Nation with a brand new national sales tax, under a rule that says you will get 20 hours of debate and no amendments, and have the Senate function as is its purpose, which is to be a place of discussion and amendment. It would function like the House of Representatives, that is true, but it would basically eliminate the Senate as a concept and it would go right directly at destroying the purposes of the Senate. The same, of course, is true, to bring a major initiative--to basically rewrite health care completely--basically quasi-nationalize it, as far as I can see, is the proposal--but to have a massive health care initiative which would affect everything that has to do with health care brought to the floor of the Senate under reconciliation would be to fundamentally undermine the purposes of the Senate, which is to discuss, debate, and have the right to amend major public policy. I can't think of two things which would be more significant public policy than those initiatives.

Yes, if they used this system of reconciliation, they would take serious risks because they would be subject to something known as the Byrd Rule on public policy, but just the concept that they would be thinking about this is the reflection of their willingness to ignore the concept of bipartisanship which we hear so much about. If you are going to talk about reconciliation, you are talking about something that has nothing to do with bipartisanship; you are talking about the exact opposite of bipartisanship. You are talking about running over the minority, putting them in cement, and throwing them in the Chicago River. Basically, it takes the minority completely out of the process of having a right to have any discussion, say, or even the right to amend something so fundamental as a piece of legislation of this significance. It also, I would note, takes anybody who disagrees, even on the majority side, out of the discussion, anybody who disagrees with the actual document brought to the floor under the reconciliation instructions.

So using reconciliation in this manner, on this type of an issue, would do fundamental harm--fundamental harm--to the institution of the Senate. Why even have a Senate if you are going to use reconciliation on something this significant? You might as well just go to a unicameral body and be like Nebraska: just have one body. It would be the House of Representatives because that would be the practical effect of using reconciliation. It is such a dangerous precedent to set or to even discuss because by discussing it, you basically devalue the purposes of the Senate, which is to amend and debate and have an open forum; one where, as Washington said, the hot coffee can be poured from the teacup into the saucer. The Senate is supposed to be the saucer. It is supposed to be where we get an airing, and certainly on issues of this size we should have it.

So I certainly hope we have no further discussion of the idea of using reconciliation for the purposes of pursuing either a national sales tax on energy called the carbon tax and the policies it would imply for industrial policy relative to energy production in this Nation or for the massive rewrite of health care.

Mr. President, I yield the floor.

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

Mr. President, I ask unanimous consent to speak for 15 minutes.

Mr. President, I wish to address, again, the issue of the budget as proposed by the President of the United States, which is about to be

taken up by the Budget Committees of the Senate and the House, and its implications for us as a nation because the implications of it are rather dramatic.

Now, I understand--and all of us on our side of the aisle understand--the last election was won by the President and his party, that the Democratic Party now controls both the House and the Senate and the administration and, therefore, they have absolute responsibility and the right to send us a budget which reflects their priorities. But I think we ought to have openness as to what the implications of that budget are relative to the future of our Nation, and they are dramatic.

As you look at the budget that has been proposed by this administration, it represents the largest expansion of Government in our history. It is a proposal which is essentially moving the Government into arenas with an aggressiveness that has never been seen before. It has in it the largest tax increase in history, as well as the fastest increase in the debt of our Nation in history.

The taxes go up by $1.4 trillion under this budget. Discretionary spending, which is spending that is not entitlement spending, goes up by $725 billion. Entitlement spending--which are things such as health care--goes up by $1.2 trillion. Yet there is no effort to save money in this budget to reduce the cost of spending and the cost of the Government. Instead, there is an expansion of the Government in this rather aggressive way.

The practical effect of this is that within 5 years the debt of the United States held by the public will double. That means in the first 5 years of this administration--presuming it is reelected--they will have increased the debt more than the debt was increased since the founding of the Republic all the way through the Presidency of George W. Bush; they will have doubled the debt of the country.

In 10 years, because of this massive expansion in the size of the Government, they will triple the debt of the country.

What does ``debt'' mean? What does tripling the debt from $5.8 trillion to $15 trillion in 10 years mean? Well, basically, it means Americans coming into the workforce, Americans of the next generation, and the generation that follows that generation, will bear a burden from our generation--that the costs of today are being offloaded onto our children. The result of that is very simple. Our children and our grandchildren will have a country which will not give them as much opportunity as our country has given us because the burden from our generation will be weighing them down. The costs we have run up as a generation and passed on to them will set them behind the starting line. They will end up having less opportunity to buy a house, send their kids to college, live a quality of life we have lived because they will start out with a debt and a burden of a government which exceeds, in many instances, their ability to pay.

We are, under this proposal, heading the Nation into an untenable situation. In the area of deficits, which translates into debt--a deficit is what happens at the end of the year when your bills come in. If you have more bills than you have income, you end up with a deficit. That, then, becomes debt.

In the area of deficits, this budget takes us up dramatically in the next 2 years to an all-time high--a number that is hardly even contemplatable--a $1.7 trillion deficit this coming year. That is 28 percent of gross national product being spent by the Federal Government.

Now, I am willing to accept this number and not debate it because we are in a recession. It is necessary for the Government to step in and be aggressive, and the Government is the last source of liquidity. So one can argue that this number, although horribly large, is something we will simply have to live with. What one can't accept is what happens in the outyears--rather than bringing this deficit down to a reasonable number, a number which would be sustainable for our children to bear-- because the President is proposing to expand the Government dramatically, its size and its cost. He is proposing deficits as far as the eye can see of 3 to 4 percent of gross domestic product.

What does that mean, 3 to 4 percent of gross domestic product? Well, historically, the deficit of the United States over the last 20 years has been 1.9 percent of gross domestic product. It means every year we are adding so much more debt than we can afford to our Nation that our children, again, will have less opportunity to succeed.

To put it in numbers terms, historically, the debt of the Federal Government has been about 40 percent of gross domestic product. In these outyears--ignoring this situation which is driven by the very severe recession--in these outyears, the public debt compared to the gross domestic product will stay at about 67 percent of gross domestic product, not 40 percent, which is sustainable but 67 percent. Those are numbers which, if we were in another part of the world, would be described as a Banana Republic because they are not sustainable and they drive us up to a cost which is not affordable. Those are the numbers which are driving the tripling of the national debt in 10 years.

One may say, well, where does that all come from, all this expansion of debt that is going to be put on our children's backs? It comes, quite simply, from spending. This administration has proposed the largest increase in the size of the Federal Government in our history, a massive shift to the left of the Government.

This is a chart which shows the historical spending of the Federal Government as a percent of GDP. Historically, this line right here reflects the mean, which has been somewhere around 20 percent of gross national product. That is a big chunk of the gross national product to be spending on the Federal Government, but that is what we have been doing. With the recession, obviously, it spikes up to 28 percent, but the point is that this administration doesn't plan to bring it down to historical levels; rather, they intend to keep spending at around 22 to 23 percent of gross national product. That is not affordable. It is not sustainable.

Why is it not sustainable? Because they don't increase taxes to that level. If they did, they would basically be creating a confiscatory situation for young people who are going into the workforce; rather, they simply run up debt to try to cover that difference at a catastrophically fast rate. We have to bring this spending line down if we are going to have a responsible budget.

Now, why does this go up so much? Why does this spending level go up so much? Well, it goes up so much because essentially they are planning to nationalize large segments of the economy; to have the Government take over the responsibility for large segments of the economy. The most specific area they do this in is in educational loans, where today we have what is known as the public-private balance, where some people get their loans directly from the Federal Government and some people get their loans from the private sector. They are going to end that policy, and they are going to have the Federal Government take over all lending. That is the most specific. However, if you look at their health care policy, they are moving in that direction there too. They have suggested in this budget that we should increase health care spending as a downpayment for $634 billion. That is a downpayment. The actual number of the increase is closer to $1.2 trillion in new health care spending.

What does that really mean? Well, essentially we as a government and we as a nation spend 17 percent of our gross national product on health care. That is much more than any other industrialized nation in the world spends. The next closest nation spends about 12 or 11 percent. So it isn't that we are not spending enough on health care in this country; it is that we don't use it very well--the money. We don't allocate it very well, and we don't use it efficiently.

What the administration suggests is that we should expand that spending in the area of health care by another $1.2 trillion, as they move the Federal Government into the role of basically deciding how health care should be managed in this country, in a much more direct way. That is one of the reasons this spending line stays up so high.

At the same time, they are suggesting massive new tax increases-- massive new tax increases--the largest tax increases in history. Now, this has been covered with the argument that, oh, this is just going to tax the

wealthy; the rich among us are going to be the ones who pay these taxes. Well, that is a canard. That is a straw dog. When you start increasing taxes at the rate they are proposed to be increased in this budget--$1.4 trillion of new taxes--you are going to hit everybody. You are going to hit everybody pretty hard.

There is in this budget proposal something that is euphemistically called a carbon tax. That is a term of art to cover up what it really is. It is a national sales tax on your electrical bill. It is estimated by MIT, a fairly objective institution, that this national sales tax on your electrical bill will raise around $300 billion a year. That is $300 billion a year that will be added to your electrical bill. The administration says it is $64 billion, but the same program they are talking about when looked at by an objective group at MIT, they concluded the real cost would be $300 billion. Whether it is $64 billion or $300 billion, it is a huge tax that is going to affect every American when they get their electrical bill.

In addition, they have this tax which they call the wealthy tax. People making over $250,000, they are essentially going to nationalize their income and say: If you make more than $250,000 we are going to raise your tax rate up to an effective rate of 42 percent. Well, I guess if you don't make that type of money, it probably doesn't bother you, but think about the people who are making $250,000. For the most part, they are small business people. They run a restaurant. They run a small software company. They run a small manufacturing firm. They are the people who create jobs in this country. Most small businesses are sole proprietorships or subchapter S corporations. The money they make is taxed to the individual who runs the small company. Whether it is a restaurant or a software company or a small manufacturer, it is taxed to them personally.

What do they do with that money? They take it and they invest it in their small business. Where are jobs created in this Nation? They are created by small business. This is a tax on small business. Then, of course, they raise the capital gains rates. They raise the dividend rates. Aren't we in a recession? Why would you raise taxes on the productive side of the economy when you are in a recession? Is that constructive to getting out of the recession? No. In fact, the stock markets are saying exactly that. They are looking at this budget and saying: Wow, this is the largest increase in the Government ever proposed, and it is going to be borne by the people who are the entrepreneurs and the small business people.

So do we really want to invest in America? Do we really want to put our money into the effort to try to make this country grow? Second thoughts. That is what is happening in the stock market. It is not constructive to economic growth.

Tax policy has to be constructed in a way that creates an incentive for people to go out and take risks. It creates an incentive for people to be willing to take their money and invest in something that is going to create jobs. When it is said to someone we are going to take 40 cents of the next dollar they make and throw State and local taxes on top of that--for example, in New York, it would amount to almost 60 percent of the next dollar they make--people start to think: Well, why should I invest in something that is a taxable event? Let me invest in something that is not a taxable event.

So instead of getting an efficient use of capital, people are running around investing their money to try to avoid taxes. As a result, we don't create more jobs; we just create more tax attorneys. Well, maybe that is jobs. I used to be a tax attorney, so I shouldn't pick on tax attorneys, but as a practical matter, it is not an efficient way to use capital.

We saw over the last 7 years prior to this recession--and granted, this recession has created an aberration for everything that is economic--we had a tax policy which saw the largest increase in revenues for 4 straight years that this country has ever experienced. We saw a tax policy which basically stood on its head the idea that if we maintain a low tax burden in capital gains, we would collect less taxes. In fact, it did just the opposite. We collected much more taxes from capital gains. In fact, over the last 7 years, because of the tax policy that was in place, the Tax Code became more progressive. The top 20 percent of income producers in this country ended up paying 85.7 percent of the income taxes in the country. That was compared with the Clinton years when the top 20 percent of income producers in this country paid 82 percent of the taxes.

At the same time, the bottom 40 percent of people receiving income in this country ended up getting twice as much back because they don't pay income taxes and they get a rebate in many instances through the EITC. They ended up getting twice as much back than during the Clinton years. So you actually had in the last 7 years a tax policy that encouraged growth, encouraged entrepreneurship, encouraged job creation, which was generating more revenues to the Federal Treasury, and yet being more progressive than during the period of the Clinton years.

What the administration has suggested is, we should not only go back to the Clinton years, we should do even more by taking an effective rate that will even go above the rate of the Clinton years to 42 percent, 41 percent. It makes no sense, especially in a time of recession, to basically have that sort of attack on small business and job producers in our Nation.

So this budget is a statement of policy which is pretty definitive, and I don't believe it is very constructive. It is a statement of policy which says we are going to radically expand the spending in this country. We are going to radically expand the size of Government in this country. We are going to end up after 5 years with Government we can't afford, that is spending more than at any time in our history, and that is running up deficits which are going to compound the problems for our children. It is not constructive, in my opinion. I think we can do a lot better, and we can do it this year rather than wait.

Mr. President, I yield the floor.

I thank the Senator from Tennessee. I know the Senator from Tennessee will not be surprised to learn that there is no entitlement reform in this budget; that this budget, regrettably, dramatically increases entitlement spending.

The chart I have here reflects that increase. If you would use the present baseline on entitlement spending, that would be the blue. Now that is going up pretty fast. During this period, it would go from $1.2 trillion up to almost $2.4 trillion. That is the baseline, if you did nothing. Now one would have presumed with that type of increase in entitlement spending, and the fact that this budget, as it is proposed, is going to run up a public debt which will double in 5 years and triple in 10 years, that it will create a deficit this coming year of $1.7 trillion and a deficit in the last year of the budget of $700 billion--deficits which are larger in the last years of this budget than have historically been those that we have borne as a nation over the last 20 years, and a debt which will go from $5.8 trillion to $15 trillion plus. One would have presumed that in that area where the budget is growing the fastest, and which represents the largest amount of cost, that this administration would have stepped forward and said: Well, we can't afford that; we have to try to slow the rate of growth of spending in that area, or at least not have increased it. But what the President's budget has done is they have proposed to dramatically increase the amount of spending in the entitlement accounts.

Most of this increase will come in health care. Now, people say, and legitimately so, that we have to reform our health care delivery system in this country; that we have to get better with health care in this country. But does that mean we have to spend a lot more money on it? No. We spend 17 percent of our national product, of what we produce as a nation, on health care. The closest country to us in the industrialized world only spends 11\1/2\ percent of their product on health care. So we have a massive amount of money we are spending on health care as an industrialized nation that is available to correct our health care system. We don't have to increase it even further.

What the President is proposing is to increase health care spending. As a downpayment, they are saying $600 billion, but actually what they are proposing is $1.2 trillion of new entitlement spending in health care. No control there. In addition, as the Senator from Tennessee noted, they are taking programs which have traditionally been discretionary, which have therefore been subject to some sort of fiscal discipline around here, because they are subject to what is known as spending caps on discretionary programs, and taking these programs and moving them over to the entitlement accounts. Why? Because then there is no discipline. You spend the money, and you keep spending the money, and there is no accountability. So they are taking the entire Pell program out of discretionary accounts and moving it over to entitlement accounts. As the Senator from Tennessee noted, this is over $100 billion of new entitlement spending.

If we keep this up, what is it going to do? Essentially, what it is going to do is bankrupt our country, but it will certainly bankrupt our kids. We are going to pass on to them a country which has this massive increase in debt--something our children can't afford, as I mentioned earlier--a debt which will double in 5 years because of the spending, and triple in 10 years. Almost all of this growth in debt is a function of the growth of the entitlement spending in this program. Although there is a considerable amount of growth in discretionary, the vast majority of this increase is in spending for entitlement programs.

To put it another way, and to show how much this is out of the ordinary and how much this is a movement of our government to the left--an expansion of government as a function of our society--this chart shows what historically the spending of the Federal Government has been. It has historically been about 20 percent of gross national product. That has been an affordable number. Granted, we have run deficits during a lot of this period, but at least it has been reasonably affordable. But this administration is proposing in their budget that we spike the spending radically next year, which is understandable because we are in the middle of a very severe recession and the government is the source of liquidity to try to get the economy going. So that is understandable. Maybe not that much, but maybe understandable. It is more than I would have suggested, but I will accept that. The problem is out here, when you get out to the year 2011,

2012, and 2013, when the recession is over. When the recession is over, they do not plan to control spending. They plan to continue spending on an upward path so it is about 23 percent of gross national products.

What does that mean? That means we are going to run big deficits, big debt, and all of that will be a burden and fall on the shoulders of our children. Our children are the ones who have to pay this cost.

Yes. When President Clinton raised taxes in the mid 1990s, and a Republican Congress came into play, we controlled spending. He got his tax increase, the deficit went down, because the tax increase was put to reducing the deficit. What President Obama is proposing is that he increase taxes by $1.4 trillion--the largest tax increase in the history of our country. Is it going to be used to reduce the deficit? No, just the opposite. It is going to be used to grow the government and allow the government to now take 23 percent of gross national product instead of the traditional 20 percent.

So you can't close this gap. Basically, all the new taxes in this bill--and there are a lot of them. There is a national sales tax on everybody's electric bill, a tax which is basically going to hit most every small business in this country and make it harder for them to hire people; and a tax which limits the deductibility of charitable giving and of home mortgages. All these new taxes are not being used to get fiscal discipline in place, to try to bring down the debt, or limit the rate of growth of the debt, or to limit the size of the deficit. They are being used to explode--literally explode--the size of the Federal Government, with ideas such as nationalizing the educational loan system, ideas such as quasinationalization of the health care system, which is in here, and massive expansion of a lot of other initiatives that may be worthwhile but aren't affordable in the context of this agenda.

So this budget is a tremendous expansion in spending, a tremendous expansion in borrowing, and a tremendous expansion in taxes. And it is not affordable for our children.

That is a good point, and that has certainly been made by the other side of the aisle: Well, under the Bush administration all this spending was done and this debt was run up.

In the first 5 years of the Obama administration, under their budget--not our numbers, their numbers--they will spend more and they will run up the debt on the country more and on our children more than all the Presidents since the beginning of our Republic--George Washington to George Bush. Take all those Presidents and put all the debt they put on the ledger of America, and in this budget President Obama is planning to run up more debt than occurred under all those Presidents. It is a massive expansion in debt.

It is also an interesting exercise in tax policy. Now, I know we are not talking so much about taxes today, but I think it is important to point out that when you put a $1.4 trillion tax increase on the American people, you reduce productivity in this country rather dramatically. One of the unique things about President Bush's term was that he set a tax policy which actually caused us to have 4 years-- prior to this massive recession, which is obviously a significant problem and a very difficult situation--but for the runup during the middle part of his term right up until this recession started, the Federal Government was generating more revenues than it had ever generated in its history. Why was that? Because we had a tax policy which basically taxed people in a way that caused them to go out and be productive, to create jobs, and to do things which were taxable events.

Unfortunately, what is being proposed here, under this administration's tax policy, is going to cause people to do tax avoidance. Instead of investing to create jobs, they will go out to invest to try to avoid taxes, and that is not an efficient way to use dollars. The practical effect is it will reduce revenues and increase the deficit. So on your point, the simple fact is, as this proposal comes forward from the administration, it increases the debt of the United States more in 5 years than all the Presidents of the United States have increased the debt since the beginning of the Republic.

It has the largest increase in taxes, the largest increase in spending, and the largest increase in debt in the history of our country.

I think the Senator is absolutely right. The stimulus package was a massive unfocused effort by people to fund things they liked. I don't think it was directed at stimulus. It was more directed at areas where people believed there needed to be more money, people who served on the Appropriations Committee, and therefore they massively funded those areas. Between the stimulus bill and the omnibus bill, there were 21 programs which received on average an 88-percent increase in funds for 2009 compared to 2008; $155 billion more was spent on those programs for this year than last year. That is just a massive explosion in the size of the Government. It is inconsistent with what the purposes of a stimulus package should have been.

The stimulus package should have put money into the economy quickly for purposes of getting the economy going. What this bill did was basically, as you mentioned earlier, build programs that are going to be very hard to rein in. The obligations are there. They are going to have to be continued to be paid for, and, as the Senator from Arizona pointed out, that was probably the goal: to fundamentally expand the size of Government in a way that cannot be contracted.

Take simply, for example, a very worthwhile exercise which is NIH. They received an extra $10 billion, I believe, on the stimulus package, for 2 years of research. Research doesn't take 2 years. Research takes years and years and years, so you know if you put in that type of money up front you are going to have to come in behind it and fill in those dollars in the outyears.

They basically said you are going to radically expand the size of this initiative. The same thing happening in education. The same thing happening in health care. That is where this number goes up so much, 23 percent of gross national product, and it goes up from there. The only way you pay for it is basically taxing our children to the point they cannot have as high a quality of life as we have.

I thank the Senator from Tennessee for taking this time. I think it all comes down to these numbers. Really, what does spending do? Sure it does a lot of good things, but in the end, if you don't pay for it, it makes it more difficult for our country to succeed and for our children who inherit the debts to succeed. When you double the debt in 5 years because of the spending, and you triple it in 10 years, you are absolutely guaranteeing that you are passing on to our children a country where they will have less opportunities to succeed than our generation. That is not fair. It is simply not fair for one generation to do this to another generation. Yet that is what this budget proposes to do: to run up bills for our generation and take them and turn them over to our children and grandchildren at a rate greater than ever before, a rate of spending greater than has ever been seen before, and a rate of increasing the debt that has never been conceived of before, that you would triple the national debt in 10 years.

It is not fair, it is not right, it is not appropriate, and it certainly is a major mistake, in my opinion.

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

Madam President, I rise today to speak a little bit about where we are in our economic situation in

this country and specifically as it is affected by the President's budget as he has brought it forward. I want to begin by acknowledging my respect and appreciation for what this administration has tried to do in the area of stabilizing the financial industry of this country. They, in conjunction with the Chairman of the Federal Reserve, Treasury Secretary Geithner, and Larry Summers, the Special Adviser to the President, along, obviously, with the input of Chairman Volcker, have put together a very comprehensive effort to try to use the strengths of the Federal Reserve and the Federal Government to basically inject liquidity into the system and put stability into the financial system of the country.

There has been a tremendous amount of commentary on this and much of it has reflected a lack of confidence in the initiatives that have been brought forward by this administration because, in many instances, they have not been as specific as they might have been. But the general thrust of what the administration has done in this area has been positive and I believe we are starting to see it work. The initial TARP dollars, which were put in by the prior administration, did stabilize the banking industry during a critical time. That has been followed on with additional TARP dollars from this administration, followed on by the initiatives from the Fed in the area of TALF, which basically is potentially over $1 trillion of support for new loans in the area of consumer credit and maybe commercial real estate; trying to do something in the mortgage area--initiatives have begun there using the FDIC and also the Treasury and the Fed again; in the area of basically underwriting the stability of major banking systems in the country, significant efforts have been made; and we are now hearing there is going to be an additional effort made to take toxic loans off the balance sheets of the banks using the leverage from the private sector.

All this has been, in my opinion, the right way to go. I didn't support the stimulus package because I thought it was unfocused and I did not think the dollars were used as effectively as they might. I wanted to see the dollars in the real estate area. But as a very practical statement, on balance the efforts of this administration to try to stabilize the financial industry, because stabilizing the financial industry is critical to getting the economy going, have been positive in my opinion. There is still a long way to go and there are more specifics that need to come and I guess more of that is going to come this week.

But that initiative to try to get this economy going and try to address the issue of people's concerns about their jobs and the value of their homes and their ability to live their lives in a constructive way in the face of severe financial distress which is being caused by this recession, stands in juxtaposition to this budget they have sent up. It is as if they have a ying and yang personality down there at the White House because they sent us up a whole group of ideas in the area of stabilizing the financial industries and trying to get the economy going with their stimulus package, the purpose of which is to lift the economy using the Federal Government.

Then they sent us up a budget which essentially creates a massive expansion in spending, a massive expansion in taxation, a massive expansion in borrowing, not only in the short run when you might be able to justify more spending, when you can justify more spending and borrowing, but as far as the eye can see with the practical effect of having a dampening effect, throwing a wet blanket on top of this country's productivity capabilities and this country's ability to be moving forward as an entrepreneurial society.

Look at the budget in specifics. The budget, in the short run, spikes the deficit dramatically. I am not going to argue with that. That may be necessary--maybe not at the levels they are doing it, but it may be necessary. It is necessary in order to put liquidity into the market, put liquidity into the American economy.

But then it continues to expand the size of Government; 28 percent of GDP will be the size of the Government this year. That is massive compared to our historical size of the Government as part of the GDP. That has got to come down. It does come down, but it does not come down all that much. By the fifth, sixth, seventh year, we still have Government spending that is 22, 23 percent of GDP. We have a deficit in the fifth year that is 3 to 4 percent of GDP.

The debt of the Federal Government, the public debt, is doubled in 5 years under this budget. It is tripled in 10 years under this budget. Taxes are increased by $1.4 trillion under this budget, $1.4 trillion. What are those taxes used for? Not to reduce the deficit but to expand the size of the Government even further.

Health care is essentially put on a track toward nationalization. Educational loans are nationalized. Discretionary spending goes up by almost three-quarters of a trillion dollars. And there is absolutely no restraint in any accounts of any significance on the spending side of the ledger in this budget. So that by the time we get to the fourth and fifth year of this budget, rather than seeing the numbers come down to something that is manageable for our society, rather than seeing the debt-to-GDP ratio come down to what might be a manageable number, it remains at a very high level, 67 percent.

Historically, debt to GDP in this country has been about 40 percent. Those are numbers. What do they mean? Well, essentially, instead of having a traditionally strong industrialized society, where your debt is manageable at 40 percent of your GDP, you are heading toward a banana republic society or country where your GDP-to-debt ratio is up around 70 percent. You cannot sustain that. Yet this budget presumes we are going to have a debt-to-GDP ratio of the banana republic type as far as the eye can see.

And the deficit? It is claimed that it is cut in half. Well, if you increase the deficit four times, and then you cut it in half, you do not gain very much. That is like taking four steps backward and only two steps forward. The practical effect of that is that we still end up with a deficit 4 or 5 years out, well after we are past this recessionary period, hopefully. I am sure we will be past it by then because we are a resilient nation. A deficit which is still way above the historical norm for this country, a $712 billion deficit is projected by the year 2019 under this budget, 3 to 4 percent of GDP. That is not sustainable. What is the practical effect of this?

Well, the practical effect is that we give our kids a country they cannot afford. We put on them a debt burden which basically stymies their ability to succeed and prosper.

In addition to this, you have got to look at the policies underlying this budget. What are the policies that are driving this massive expansion of Government in this massive expansion of debt? Well, they are basically policies which say, we are going to take the Government and we are going to explode its role relative to the private sector activities.

There is a proposal in this budget, as I mentioned earlier, to nationalize the student loan program. That is certainly an unnecessary act. We had a very vibrant private sector student loan program and a vibrant public sector student loan program. There is no reason we cannot have both. That is no longer acceptable. We are going to nationalize the student loan program.

There is a $636 billion place holder in this budget for the expansion of health care. They say it is a downpayment. Well, if it is a downpayment, we are talking about health care expenditures exceeding $1 trillion under this budget, growth in health care costs. Well, health care already absorbs 17 percent of the gross national product. That is about 5 percent higher than any other industrialized nation. It is not that we do not put enough money in our health care system, it is that we do not use it very well. And to increase the dollars going into health care by those numbers means what you are proposing is essentially for the Government to take over the entire health care system at some point in the future--another great expansion in the size of Government.

Then you have got this expansion on the discretionary side of the account. Every discretionary program expanding, except for defense, where they play a gimmick for the purposes of claiming budgetary savings that do not even exist on spending that will not occur.

So the goal of this budget is not to contain or to slow the rate of growth of

Government in the outyears after we are past this recession, it is rather to explode the size of Government as we move out of this recession, and put in place a government that continues to grow at a rate which the economy cannot afford and which obviously our children cannot afford.

How is this paid for, this dramatic expansion of Government? Well, most of it is borrowed, borrowed money. But some of it comes out of taxes. There are major new taxes proposed. We have all heard about the taxes on the wealthy. Let me point out that essentially what is being proposed here is that if you make more than $250,000, your income is going to be nationalized. Well, there are a lot of wealthy people who make more than $250,000, but there are also a lot of small businesses in this country that make $250,000.

That is where jobs come from in this country--the person running the local restaurant, the person running the local garage, the person who started a software company, the person who has initiated a new product, a new catalog product, maybe, selling something. All of these are small businesses, and they are across this Nation, and they are what create jobs. When you say to those folks, well, we are going to tax away whatever you make above a certain amount, $250,000, you are saying to them they do not have the assets to reinvest in their small businesses. You are basically going to create a huge disincentive. This creates a huge disincentive for small businesses to expand and for people to be added, for employees to be added to their businesses. It throws a wet blanket on the expansion of small business.

There is another tax in here that is not talked about too much. They call it a carbon tax. This is a massive new tax on everybody's electric bill. If you described it fairly, it should be described as a national sales tax on electricity. If you use electricity for anything, something in your home, if you use energy basically for anything--and almost every American does; I cannot think of anyone who does not--you are going to find yourself hit with a new tax, this carbon tax, this national sales tax on energy.

And what does it amount to? It is not a small sum. It is scored in this budget. It is understated in this budget. It is scored at, I think, $70 billion a year or something like that. That is still a lot of money, by the way. But it is understated. According to the MIT study and according to the numbers which were being used last year when this was being discussed, the actual number is closer to $300 billion, $300 billion in a brandnew tax burden on the American consumer.

And what is this tax used for? Well, it is used, in large part, for walking-around money for various constituencies who have an interest in getting money from the Federal Government. It is not used to contain the Federal Government or to reduce its size by reducing the deficit. A large percentage of these tax revenues are going to be added to various initiatives around here which are the projects of Members--worthwhile, I am sure.

But it is pretty hard to justify hitting Americans with a brandnew national sales tax on their energy bills for the purposes of expanding this Government, which is already too large to begin with. And, remember, none of this expansion in the Government taxes takes into account the huge costs which we have coming at us which we do not know how we are going to handle. Those are the costs of the retirement of the baby boom generation, for as this baby boom generation continues to retire--it has begun retiring now--it is going to generate massive costs on our Government.

We know we have $60 trillion of unfunded liability to pay for Medicare, Social Security, and Medicaid for the baby boom generation as it retires. And why is that? Why are there all of those trillions of dollars? Why is all of that money out there and obligated?

Because we have created a massive cost, and we have the largest generation in America retiring that is going to push that cost onto our children. We go from 35 million retired people to 70 million retired people, and most of that is going to occur by the end of this administration's term in office should the President be reelected.

So you would think that in this budget they would have said, well, we better start addressing that issue. We better start disciplining ourselves relative to how we are going to handle this massive increase in spending, which we know is coming at us--I call it a fiscal tsunami--as a result of the baby boom generation retiring. But, no, not one word in this budget about containing or slowing down or in any way addressing the issue of entitlement spending as a result of retirement of the baby boom generation.

The practical effect is there is an elephant in the room that we know we are going to have to address relative to cost that is not addressed, but at the same time the budget radically expands the size of Government, using resources that might have been used to address entitlement reform.

It is a budget which, if you look at it, essentially says to the productive and entrepreneurial side of our Nation: We are going to tax you. We are going to regulate you. And we are going to create an atmosphere where we are going to crowd out your ability to borrow money because the Federal Government is going to borrow so much money.

It is simply an attack on the entrepreneurial elements of our society, the people, the small business people who go out there and create jobs. That is why I said there is a conundrum here. On the one side this Government is proposing all sorts of initiatives, which I agree with, to try to float the economy using the liquidity of the Federal Government in a lot of different areas but primarily focused on getting stability back into our financial system and helping people who have mortgages that they cannot pay.

But, on the other side, you have this budget sent up here which is a clear and present attack essentially on the productive side of our ledger as a nation, while it expands radically the size of Government. So you can understand why the stock market and others are saying, whoa, what is happening here? Who am I to believe, the part of the administration which says we are going to try to get this economy going or the part of this administration that says, once we get it going, we are going to stuff it down with a major new tax burden and a dramatic expansion in Government?

So much more could have been accomplished in this budget than what has been proposed. If it had come forward with any reasonable ideas in the area of disciplining and managing the entitlement accounts, there would have been strong bipartisan support for that. But none were put on the table.

The opportunity to move forward in the area of Social Security was not taken. The opportunity to do something significant in the area of Medicare was certainly not taken in this budget, and the practical effect of that is, that if you are looking at this budget, and you are an investor from somewhere around the world buying American bonds--and, remember, most of our debt today is being bought by people outside the United States. They are basically funding our capacity as a nation to function--you are going to look at this budget and you are going to say, do I have confidence that the bonds I am buying are going to have the value that I am putting into them 5 or 10 years from now?

If I look at this budget, I am going to conclude that the American Government is not going to discipline itself, that it is going to continue to run a debt-to-GDP ratio that is not sustainable, and that, therefore, it is very likely that maybe my debt that I am buying from the United States, the Treasury bonds I am buying, are not going to be the value I am paying for them.

This budget not only stifles the entrepreneurial spirit of America in the outyears--and people looking 4 or 5 years down the road are not thinking that far now, but in October, this budget repeals many of the tax initiatives which create entrepreneurship and tax people at a heavier rate; it starts pretty soon here--at the same time it is putting at risk the value of our currency and the value of our debt. It is saying to the world: We are not going to discipline ourselves in the outyears.

When we raise taxes, which this administration is proposing--and that is what they said they would do--one presumes they would do what President Clinton did when he raised taxes. He

used it to try to reduce the deficit. With the help of a Republican Congress, which limited spending, we were able to accomplish that. This budget does not accomplish that. This budget takes $1.4 trillion in new taxes and spends it on a massive expansion of the Federal Government in the area of health care and the way we finance student loans, all the different initiatives basically expanding Government's role.

The practical effect of that will be to weaken the dollar, our currency, and to cause people to question the value of our debt. That is serious. That is very serious for us as a nation.

I agree with those who say the market is confused by this administration. It is confused because, on one hand the administration is pursuing what is a necessary policy to get liquidity into the market and stabilize the financial industry, stabilize the housing industry, but, on the other hand, it has put forward a budget which is probably the largest expansion of Government in the history of the country or the largest proposed expansion of Government in the history of the country, unpaid for and, therefore, threatening the future of our children with debt they can't possibly afford.

As we move forward in this effort, I suggest a better course of action would be for this administration to come forward with some fiscal discipline. Why don't they propose some specific ideas which will address the impending fiscal tsunami? There are bipartisan initiatives in the Senate to do so. Senator Conrad and I have proposed a procedure which would allow us to put in place a process which would lead to policy, which would lead to a vote, which would actually limit and make affordable a large percentage of the outyear cost of entitlement programs as we try to fund the retirement of the baby boom generation.

Take us up on that offer. It has very significant bipartisan support. Why not take up an initiative in the area of trying to get the deficit and the debt back to the prerecession period? When we went into the recession, the debt was 40 percent of GDP. The deficit was down to about 1.5 percent of GDP. Let's get back to those numbers. If we are going to raise revenues, let's use them to reduce the deficit, not to expand the size of Government.

These are initiatives that would get a lot of Republican support, certainly on the first point. There might even be some support on the second idea of getting the deficit down. I would certainly support lowering the debt. But the proposal as put forward now is confusing. Not only is it confusing, but if it were actually put in place, it would put our country in a very serious situation as our children try to lead their lives and move forward in a nation which gives them an opportunity for prosperity.

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

Will the Senator yield for a question?

I want to associate myself with the Senator's concern. I think a proper explanation of how the bill is structured is in order. As I understand it, as the bill left the subcommittee, and then the full committee, it made it unalterably clear no money that goes into Gaza can be used for Hamas. That doesn't need to be restated in an amendment. In fact, doing that might imply that the language in the bill isn't as strong as it should be. Also, on the issue of resettlement of Palestinian refugees, there may be many we would want to come to the United States--maybe physicists and other folks. This blanket approach that nobody can enter the country is really over the top and far too broad a brush to paint on the entire population of an area.

Obviously, we don't want terrorists or anybody who is sympathetic to the Hamas to come. But there are others we may wish to come to the United States because maybe they were opposition leaders to Hamas.

Thirdly, the issue of the language relative to Egypt concerns me, and I guess it concerned the Senator from Vermont. I will put this in the form of a question.

To complete my inquiry of the chairman of the subcommittee, the language relative to Egypt in using funds from the money that was allocated to Egypt, approximately $1.3 billion for the purpose of making sure the border entries into Gaza and other entries that might affect Israel are adequately monitored, that language truly is not necessary because we have language in the bill that says it can be used for the purpose of limiting access on the borders.

There is an ongoing, good-faith effort, as I understand it, by the Government of Egypt to police those borders,

using our resources to some degree. Further, Egypt has worked very hard to be an ally to us in the region. It is one of our key allies in the sense that it has always been reasonably supportive of what we have tried to do. I think we have a responsibility to be equally supportive of them when they make a legitimate request, which is that we not be overly officious in directing them under this language.

Mr. President, I wish to discuss the Veteran's Health Equity Act, a bill that has been introduced by my friend from the other side of the aisle, Senator Jeanne Shaheen. I am pleased to start the 111th Congress in a bipartisan fashion and to support legislation that addresses an issue that is extremely important to our Nation's heroic military veterans, especially in my home State of New Hampshire.

This important piece of legislation, which I hope will have the Senate's full support, would require the Department of Veterans Affairs to guarantee that veterans in every State have access to instate hospital care. More specifically, the Veteran's Health Equity Act would require the VA to either provide a full-service VA hospital in every State or contract with one or a number of full-service hospitals to provide veterans with a comparable level of care.

At this time, New Hampshire, like Alaska and Hawaii, is without a full-service VA hospital and veterans are being forced to travel to Maine, Massachusetts, and Vermont in order to receive necessary medical treatment. Oftentimes, especially during the winter months, interstate travel can be extremely dangerous in New England, and our veterans should not be forced to travel long distances in order to receive the medical care they have earned and deserve.

I will continue to press the VA until veterans have access to local, full-service medical care. Our Nation's veterans, who have selflessly served our country, are owed high-quality medical care in exchange for their courageous service. The Veteran's Health Equity Act will guarantee that they receive that care in a local health care facility.