Floor Statements

I ask unanimous consent that the order for the quorum call be rescinded.

I ask unanimous consent to set aside the pending amendment so I may offer an amendment.

Mr. President, I am most surprised to hear my colleagues on the other side object to my request to call up an amendment, to have it called up and be heard. I thought the Senate was here to do business. I think it is reasonable as part of doing that business that we should address the largest item in this bill that involves passing a cost on to our children, which is the net operating loss proposal.

Now, the way this net operating loss works is that homebuilders--that is who it is directed toward, although anybody can take advantage of it; I do not think it is limited to the homebuilders who built all of those homes and made these massive amounts of money by offering people subprime mortgages which they then took the proceeds from over the last 4 or 5 years, which subprime mortgages have now caused this Nation to go through a massive contraction and which have created one of the largest bubbles in the history of Government, in the history of commerce. Those folks, having made a huge amount of money--I mean massive amounts of money, and, in fact, in the last quarter, they were the largest earning sector in our economy--those folks are now asking that they get an additional $20 billion bailout, $20 billion bailout by allowing them, now that they are losing money, to go back and take a tax deduction of their losses against the gains which they had in prior years.

This is as if you said to someone in business, say somebody running a

small grocery store: OK, if you make money for 4 years, make a lot of money, and then you find you cannot compete or you have made some business error in your judgment and you lose money for a couple of years, we, the Government, are going to come in and give you insurance so you never lose money. You are able to go back during the years when you made money to recover the taxes you paid and use it today to give you profits.

My goodness, I think Adam Smith would be rolling over in his grave to hear this concept of economics. This is Komisar economics where nobody can lose, except for the taxpayer in the next generation who has to pay this bill. Remember, this $20 billion is going to be paid by somebody because it is being spent around here in the operation of the Government. And who is going to pay it? Well, it is obviously not going to be the homebuilder, the large corporations which ran up these huge profits. They are actually going to take that money in, take it in as income. No, that is going to be paid for by John and Mary Smith, John and Mary Smith working for a living today, or their children because it will go on the Federal debt--$20 billion on the Federal debt as a result of this little piece of chicanery.

It is unbelievable that we would claim this was a stimulus to begin with. In fact, if we are in an economic slowdown and if that economic slowdown is tied to the housing industry, none of these revenues will benefit that economic slowdown because they do not come in this year. They will be claimed this year, and they will be reimbursed next year. I think the estimate is that almost all of these recovery costs, recovery of taxes owed and paid as a result of getting this extra loss carryback, will occur in the next budget year, 2009. So, as a practical matter, it is not going to help in the next 6 months, which is when all of the major economists who have discussed this issue say we need some stimulus in the economy. No, it is not. It is simply a bonus payment from one group of people, the American taxpayers and their children, hard-working Americans, to another group of people, the speculative housing industry that ran up these huge expansions in the housing inventory over the last 3 years and then sold them in the subprime market in a way which many people have said in many instances were not appropriate, that they took advantage of the borrowers and then took those proceeds in as income, paid taxes on them, and now they want their taxes back because they are suddenly losing money.

Well, if you made money for 3 or 4 years--and a lot of money--you should not have a bonus given to you during the years when you are not making money simply because you happen to be one sector of this economy called the housing industry. In fact, just the opposite should happen, quite honestly. The market should be allowed to work here relative to the large housing manufacturers.

There is some legitimacy for doing something about homeowners who got hit with a subprime mortgage which is resetting at a rate that is astronomical on them today and they are willing to pay and could pay for and maintain their home if they had a reasonable mortgage rate. There is some reason for arguing those folks might and should get some support, or at least some assistance so they can stay in their homes, they can continue to pay their mortgages.

But there is no practical commercial argument which justifies taking tax dollars from working Americans and paying them to homebuilders because homebuilders suddenly start to lose money--after they had great years. It is not like this has been a distressed industry over a long period of time. This is an industry which has always been cyclical.

This cycle was a creation of their excess, nothing else. They were greedy. They built a lot of homes the market did not need. They sold them to people who could not afford them. They sold them with instruments which were totally inappropriately structured: the subprime mortgages. Then they took all that profit, and they used it. But, unfortunately, they had to pay taxes on that profit. So now they want their taxes back, and they want the American people to subsidize them on it.

Well, under no color of an open market, of a capitalist system--of even a marginally capitalist system; I do not think even France would accept this as a concept--should somebody who made a huge amount of money, created a speculative bubble, benefit from the taxpayers when that bubble bursts.

Yes, the people who were harmed inappropriately, the folks who bought those subprimes and did not understand the nature of them and maybe were misled relative to the nature of them, they justifiably could have some support, as long as they are the primary owners of that home and it was not bought for speculation and they are able to support a reasonable mortgage rate. Maybe there is some way to adjust that.

But this bill does not do that in this area. This net loss carry-back is simply a gift--pure and simply a gift--to one segment of our industrial community which participated in a very lucrative few years and now is having a hard time, created the problem which we now confront, and now wants to be given a gift. Unfortunately, this gift has to be paid for, as I said before.

We are going to run, this year, it looks like, a deficit somewhere of around $400 billion to $420 billion. That is the deficit we are going to run. That is up from a deficit which was under $200 billion last year. That is a huge increase in our deficit.

Now, who pays a deficit? Who pays for a deficit? Well, our children pay for it. All this goes on to our children's backs. They are the ones who pay the cost of paying off the debt, which is borrowed in order to finance a deficit.

So why would we want to say to them: OK, future Americans--young people coming through school today, going to college, thinking about starting a family, thinking about maybe having children and sending their kids to college--why would we want to say to them: We are going to stick you with a $20 billion bill so we can take care of the large housing manufacturers in this country who basically created a major disruption in our economy by putting on the market a massive inventory of homes we did not need and then using practices which were at the margin to draw people into buying those homes through subprime mortgage lending?

Why would we say that to them? How can we possibly, as a government, justify doing that to the next generation? But that is what we are going to do with this bill. We are putting $20 billion on their backs. Where is the money going? It goes into the pocket, primarily--at least that is the game plan; it is not specifically written so--it will be taken advantage of solely by manufacturers of homes. And I suspect there are going to be some other industries which will suffer losses in this economy that may take advantage of it. But it was written primarily to take advantage of the homebuilder industry, which is obviously an honorable industry, but it is also an industry which goes through cycles.

In this cycle, there is no reason we should be stepping up with this special gift to that part of our economy when we do not have any money to make the gift with, when we have to borrow the money to pay for the gift.

So that is why I have offered this amendment--or tried to offer this amendment. Now, it seems to me if everybody is so comfortable with this legislation and this idea of a net loss carry-back being extended and expanded, they should be willing to vote on this amendment. Is there no courage on the other side of the aisle? Are the sponsors of this concept afraid to vote and stand up for this bill with this proposal? It appears so.

I am not offering an alternative. I am just saying let's have an up- or-down vote on whether we should give a $20 billion gift to one segment of our commercial society at the expense of the next generation that has to pay the debt for this bill. I am just saying, stand up and be counted, so to say, as to whether you are for or against this amendment.

So, again, I will renew my request. I ask unanimous consent that the pending amendment be set aside and that my amendment relating to net loss carry forward, which strikes the provisions of the net loss carry forward, be called up.

Well, I guess that makes the point. It is too bad. I would hope people would ask why. Why can't we have a vote? What is the fear out there? Are we so concerned about this segment of our industry that we are not willing to vote up or down on whether this type of a $20 billion event should occur? I hope not. It seems to me it is reasonable that the Congress should vote on that. The Senate should vote on that.

Mr. President, $20 billion is a lot of money. Do you know $20 billion would run the State of New Hampshire for 5 years? This is a lot of money. This is big-time dollars. Twenty billion dollars is going to cost our children a lot because it compounds with interest. You just do not borrow it. You borrow it and have to pay interest on it. Of course, the interest gets paid to the Chinese or the Indians or the Saudis because they are the ones who probably buy the debt.

So not only do we end up with a $20 billion bill we pass on to our kids, but we end up with our kids having to pay interest to the Saudis or the Chinese to support that debt. Also, that one segment of our society which participated in the robustness and the excitement of large economic expansion, and maybe inflated that expansion rather dramatically, does not have to bear the burden of their excesses.

Well, as I said, Adam Smith would be a little stunned to find this is the way the market has worked and the Government of the United States-- which is allegedly the Government of a capitalist system--functions. So I will probably renew this request later on because it does seem to me, since this is by far the single biggest spending item in this bill, or tax item in this bill, it should have an up-or-down vote and an open debate.

I yield the floor.

Mr. President, on February 29, 2008, James H. Adams of Pittsfield, NH, retired as manager of the New Hampshire/Vermont District of the U.S. Postal Service after 35 years of service. I wish to thank Jim for all he has done for the people of New Hampshire over that time and for his efforts which have resulted in New Hampshire's outstanding reputation for mail operations, customer service, and worker safety.

Starting as a letter carrier in Manchester in 1973, Jim's career began when the price of a stamp cost a whopping 3 cents for a first class letter. His determination and drive for self-improvement soon led to night school classes and a degree in business management, and his talents were recognized with promotion to delivery supervisor, then superintendent of postal operations, in Concord, NH. He left our State for a time, tackling the duties of director of marketing for the Post Office in Syracuse, NY, then in a number of positions of increasing responsibility with the Postmaster General's Office in Washington, DC.

During his time in Washington, Jim worked with five U.S. Presidents and helped to develop several commemorative stamps, including those honoring our troops of Desert Storm, POW/MIAs, and even Elvis. He unveiled five World War II commemorative stamps to President George H. W. Bush in the Oval Office and was relied upon in Washington for his professional and personal knowledge of all facets of postal operations, his competent advice, and for the personal integrity with which he always conducted himself.

His return to New Hampshire to head the district in 1997 led to dramatic improvements in its operations. Overseeing a $500 million budget and 7,000 employees, Jim turned the district into one of the top 10 safest in the Nation. Similarly, with 6 million pieces of mail delivered each day in New Hampshire and Vermont, Jim's efforts led to a 96-percent on-time mail delivery record and the establishment of customer service that has been recognized as Best in the Nation for each of the past 6 years.

Beyond his professional accomplishments, which are many, Jim has remained true to his small-town roots and the honesty and decency of his upbringing. Pittsfield and all of New Hampshire can be proud of him and his success, and I am especially glad to have had the opportunity to work with Jim to serve the people of New Hampshire. Whether helping obtain a sought-after ZIP Code number to serve an entire community or making a personal commitment to ensuring an elderly or disabled customer off the beaten track received their mail at home, Jim dedicated himself to meeting the needs of those who counted on the U.S. mail coming through.

He can take great pride in his record of service. I want to take this opportunity to thank him, to recognize his contributions, and to wish him well in all his future endeavors.

Mr. President, let me join in complimenting the chairman of the committee. He is also a professional and a very enjoyable person to work with. Whether it is his birthday or he is sick, he does a great job around here. I think the comity which we have and the professionalism that is shown, between our staffs especially, who do an extraordinary job, under tremendous pressure, is the way the Senate should work. Obviously, we are debating and engaging on very significant issues of public policy, but they should stay as political and substantive policy debates. The actual operation of the Senate and the management of a piece of legislation such as this needs to be done through cooperation between the two sides, and as a result of the tenor the chairman sets in the committee, it is.

However, as he said, I do disagree. I do disagree with the bill that has been brought forward. In my opinion, it is a lost opportunity of immense proportions.

This Nation faces so many very significant issues--the most significant, of course, being the threat of Islamic terrorism and an attack on our shore again. But that is followed fairly closely by the equally significant issue, in my opinion, of the looming fiscal meltdown of this Nation as a result of the costs which we have put on our children, costs which they will have to bear dealing with paying for the benefits of the retirement of the baby boom generation.

In addition, there are issues such as tax policy and issues such as health care this country needs to deal with. Everybody who fills up their gas tank with gasoline any day of the week knows we better get our hands around the cost of energy or we are going to be in big trouble.

This budget does virtually nothing in any of these areas and, in many of these areas, in my humble opinion, significantly aggravates the problems. The opportunity was there to do things--to do significant things--to take significant steps, to be creative, to be imaginative, to even be bipartisan, which would have been nice, but those opportunities were passed.

Right upfront, this budget underfunds the troops in the field. Now, they are not alone. The administration sent up a budget that did the same thing. But then later, I give the administration credit for correcting their mistake and the Secretary of Defense came forward and said what the right number would be. Last year, the budget and the administration reflected a correct number on what was needed for the troops, but this budget grossly underfunds the troops in the

field. Even if you subscribe to the view of some of my colleagues on the other side of the aisle, which is that these troops should come home tomorrow and acknowledge surrender, you can't get them home. They are going to be left in the field without the equipment they need, without the tools they need to fight this war under the number in this budget.

In addition, this budget dramatically expands spending. My colleague loves to use a chart which shows two lines together and it is only 1 percent. Well, folks, 1 percent on $3 trillion is real money, at least in New Hampshire. That is $300 billion of increased spending on the discretionary side of the ledger. When you put in the entitlement side of the ledger, it adds up to over $700 billion of increased spending. Also, it gets built into the baseline. In other words, when you spend that extra $22 billion this year, which adds up to over $300 billion over 5 years, that becomes a figure off which the next year's spending occurs. So it gets bigger and bigger and bigger. It grows and grows and grows. There is no attempt in this budget to try to discipline spending on the discretionary side of the ledger but, more importantly, there is absolutely no attempt in this budget for disciplined spending on the entitlement side of the ledger.

We know we are facing a fiscal meltdown as a result of the costs of Medicare, Medicaid, and Social Security when this huge generation, of which I am a member and of which my colleague is a member, retires. Sixty-six trillion dollars of unfunded liability will be put on the backs of our children. What does that mean? That means their taxes will go up so much in order to support our generation that they will be unable to afford the lifestyle of our generation. They will not be able to send their kids to college. They will not be able to buy that first house. They will not be able to enjoy the comforts of a lifestyle of affluence this country has obtained, the most affluent country in the world, because entitlement costs will not be able to be borne.

This bill does absolutely nothing in this area. Why? Why do we leave this problem to the next generation? We are the ones who are creating this problem. The administration at least had the courtesy to send up a whole series of ideas and they were all fair and they were all reasonable and none of them impacted the vast majority of Medicare beneficiaries or Social Security beneficiaries. Yes, they did impact Warren Buffett. They suggested the Warren Buffetts of this world--I guess there is only one Warren Buffett--the people who have high incomes, the people with over $80,000 of personal income or $160,000 of joint income, that they should pay a fair portion of the cost of their drug insurance under Medicare. Today, they pay virtually nothing--well, a very small amount anyway, less than a quarter of a percent--a quarter of it. But that idea was not included in this bill, although there will be an amendment to have it included in the bill.

Ideas on improving technology weren't included. Ideas on improving malpractice weren't included. All ideas to get entitlement spending at least partially under control--in fact, the administration proposals which would have reduced the outyear liability which we are passing on to our children and which they can't afford, reduce that liability by almost a third in the area of Medicare, nothing in this bill, absolutely zero.

How much saving is in this bill in discretionary accounts? Zero. How much saving is in this bill in entitlement accounts? Zero. In fact, in both accounts, there are significant expansions and spending.

Then there are the games. This bill is replete with games to try to make it look like it is more reasonable and fair and cost-effective than it is. The most obscene game being played around here is the reconciliation instructions. Reconciliation, as we know--those of us who work here--is the one tool of significance which the Budget Committee has. It allows us to change how entitlement programs are funded and slow their rate of growth--that was the purpose of reconciliation--and do it without the changes being subject to the filibuster rule. It is a vehicle basically directed on the purposes of the Senate.

What has happened in this bill? There is no talk of reconciliation. What happens on the House side? They have a $750 million reconciliation instruction, which is a fig-leaf instruction, under which they intend to build a massive expansion of programmatic activity. The House doesn't need reconciliation. The House is doing the dirty work of the Senate because the Senate leadership on the Democratic side is unwilling to put forward what they are planning to do. It is the ultimate, cynical game of hide and seek with the budget.

That is why I call this the fudge-it budget. There is another fudge- it number in this budget, and that is this alleged tax gap the Senator from North Dakota talks about so much. He talked about it last year. Last year, he said we could get $300 billion. We got zero. In fact, we ended up cutting the IRS last year--the other side did--so they couldn't even collect as effectively as they were collecting the dollars that were coming in. This tax gap number may exist at some level, but there is no record at all that it is ever going to get collected. And you certainly should not be taking credit for it, claiming that is the way you are going to pay for the tax increases in this budget.

This budget has tax increases. Again, the chairman says it is only 2.6 percent. Well, 2.6 percent on $3 trillion is approximately $800 billion. What does it mean in real terms? Well, it means they are going to allow to expire the tax rates on capital gains, dividends, estate taxes, R&D credit, energy credit, tuition tax credit--on a whole series of items that benefit a lot of America.

The claim we hear from their national candidates on the Democratic side is that we are just going to tax the rich; we can pay for everything we want to do if we just tax the rich. If you take the top tax rate from the present level of about 35 percent up to the Clinton years' level of 39.6 percent, you raise $25 billion year. You cannot pay for even 10 percent of what the Democratic party is planning to spend with $25 billion a year. They have $300 billion in this budget alone. Senator Obama has proposed another $300 billion of annual increases in spending. They are short hundreds of billions of dollars in tax revenue by taxing the rich. Where is that money going to come from? I will tell you where. It is obvious. It is going to come from hard-working middle-class American families. Our estimate is that this tax package is going to cost the average small business $4,100--small business, which is the backbone of American job creation. This budget is a direct attack on their capacity to create jobs with that type of a tax increase. This budget is going to cost the average senior in America--18 million seniors--$2,200 each. That is what this package is going to cost in tax increases to pay for the spending that is in the program.

My colleague on the other side of the aisle is fond of saying: We didn't raise taxes last year; our budget is not going to raise them. This budget has built into it the expectation that taxes are going to go up by $1.2 trillion. And then they spend the money. They spend the money, so they have to raise the taxes. So they cannot claim it both ways, but they try to. That is why I call it the ``fudge-it budget.''

Individuals in this country--43 million Americans--will have to pay $2,300 each to pay for this budget. That doesn't count what Senator Obama and Senator Clinton are proposing on the campaign trail. As I said earlier, Obama has already proposed $300 billion of new spending every year. That is $1.2 trillion over the 5 years. That would double this figure, and it would mean American families would have to pay over $4,500 a year for all of the Obama plans for spending, which mirror Senator Clinton's plan--I don't want to just pick on Senator Obama uniquely. On top of this budget, you would have $2,300 plus $2,300, or $4,600 of new taxes on every family in America. Those are not rich families. It is every family who pays taxes of any significance, families who make more than $50,000, to put it into context. Individuals who make more than $30,000 will have to pay this tax. The irony is that we hear, as I mentioned, we are going to just tax the rich.

In this budget, they already assume that the tax rates on the wealthy are going to go from 35 percent to 39.6 percent in years 11 and 12. Then they spend that money. So when these proposals come forward from their national candidates that we are going to

put another $300 billion on the books of new spending next year and we are going to get it from the rich--well, they have already taxed the rich. That is already assumed in here. Who will really pay for it? Working, average Americans and small businesses. Talk about stifling an economy. Nothing will stifle an economy more than that.

This check reflects it. Under this budget, Americans are going to have to write Uncle Sam a check for $2,300 a year. The spending is built into the baseline, and the taxes are coming down the road. It is, regrettably, in my opinion, a budget of missed opportunities and a budget that is misdirected.

What we need in this country is the willingness to step forward and take aggressive steps to get spending under control, especially in the area of entitlements, and to reform our tax laws so they are more efficient and more effective in collecting obligations. But none of that is assumed in this budget, and none of it is attempted in this budget.

We need to support our troops in the field. None of that is assumed in this budget. Whether or not you agree with the policies of fighting terrorism that the President is pursuing, you have to feel that the troops need our support. This budget does not have that support.

We need to have a budget that doesn't constantly game itself, where we set up alleged enforcement mechanisms, such as pay-go, and then manipulate the budget so we go around those enforcement mechanisms. We need to have something here that protects the integrity of the few disciplining initiatives we have, such as reconciliation, rather than right out of the box, with true cynicism, set up a scenario where you are going to game the reconciliation instructions to use them to expand the size of Government instead of controlling the rate of growth of Government.

Most importantly, we need a budget that understands that it is not our money, it is not the Federal Government's money, not the money of the Members of Congress. It is the money of the people who are working out there every day, trying to make ends meet, trying to fill up their gas tanks and pay for the heat in their houses, trying to send their kids to school, trying to pay their mortgage. It is their money, for goodness' sake. Around here, it is treated as if it is our money and as if it is a generous act on our part to let people keep their money. Well, the purpose of the budget should be to structure itself so that we control spending in a manner that allows us to keep taxes under control and doesn't raise the tax burden on working American families.

We are going to be here voting a long time on a lot of issues. A lot of these issues will be raised during those votes. I appreciate the courtesy of the Senator from North Dakota and the way we have gotten to this point. I, obviously, disagree with the budget as presented.

Will the Senator entertain a question on that?

As I understand it, when we go into the vote to come after the first vote, it will be a hard 10-minute vote on each one.

Mr. President, I have no problem with this amendment, obviously. It extends tax cuts. I think it is a poster child for the ``fudge-it budget'' because last year the same amendment was offered. Actually, after that budget was adopted, none of those taxes cuts were extended. So now we are doing it again. It is sort of like the gift that keeps giving, reoffering this amendment when it has no actual impact or nothing comes from it. We are for it because it reduces some of the tax burdens in this bill, but it still leaves in place, by our calculation, hundreds of billions of dollars of new taxes on working Americans, which will lead to significant tax increases for working Americans because this doesn't relieve all of the tax burdens in this bill.

I look forward to the Senator's opposition.

Mr. President, I move to reconsider the vote.

Mr. President, I believe it is the practice of the Senate, under the 2-minute rule, that one person speaks for their time, the other person speaks for their time, and there isn't a tradition that you reserve 10 seconds or 15 seconds. If that is going to be the situation, we are going to go back and forth and everybody has to have a last word, we are going to be here for a long time.

I object. I object to laying it on the table.

I ask for the yeas and nays.

Parliamentary inquiry, Mr. President: Where actually do we stand right now?

Mr. President, what is the effect of agreeing to the motion to reconsider?

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

We have about 40 votes left.

Mr. President, it is important to note this is a reprioritization within the budget. I happen to agree with this reprioritization, but it comes out of what is known as the 920 account, which means in order to pay for this, it is an across-the-board cut to all other accounts. I think the Senator is correct that if we are going to prioritize spending, I am willing to do an across-the-board cut to all accounts to put more money into NIH and more money into LIHEAP. I suggest we take it on a voice vote, unless the Senator wants a recorded vote.

Mr. President, the Senator from North Dakota has made an exceptional case regarding the failure of the Indian health program, especially as it relates to his citizenry and other citizenry throughout this country. He has pointed out that it involves rationing, poor medical care, and that it involves inconsistent and spotty medical care. I think he has probably made one of the best cases you could possibly make for why we do not want the Federal Government running health care. The Indian health care system is a Federal system.

So however people vote on this amendment, I think we should understand that this vote is a condemnation of the idea of nationalizing our health care system.

Madam President, as I understand it, Senator Sununu and Senator Kerry are discussing this amendment. I suggest we move to the next regular order item, if there is no objection, which is Senator Lincoln's amendment.

Madam President, I believe we are back to the Sununu amendment. We have a side-by-side, I understand, with Senator Kerry.

Amendment No. 4221

I ask unanimous consent that the Sununu amendment pass.

We are agreeable to a voice vote on the Kennedy amendment.

I ask for the yeas and nays.

I ask for the yeas and nays.

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

Mr. President, I ask unanimous consent that the amendment be agreed to.

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

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

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

Mr. President, I believe the next amendment was my amendment, but we have agreed to pass over it.

I urge adoption of the amendment and ask unanimous consent that it be agreed to.

Mr. President, I understand we are going to Senator DeMint next.

Amendment No. 4328

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I ask unanimous consent that the Senator from Kansas be recognized to change a vote.

I ask unanimous consent that the amendment be agreed to.

Mr. President, I believe the Senator from North Dakota, the chairman of the committee, is going to make a request as to schedule. But I will simply say we are trying to develop a final finite list, and anybody on our side who has an amendment who has not contacted us--I believe everybody has; I believe we know what all the amendments are that people want--it is very important they tell us about them because we are developing a final finite list. And we will even accept amendments from your side if you want to tell us about them. That is OK too.

As a practical matter, I would encourage people on the Republican side to tell us what they want so we can pull up this final finite list.

I stress, Mr. President, when we come out of this break, we hope to have a finite list and hope to lock it in, so we need to hear from folks. We are, as the Senator from--the junior or senior Senator, I never know--from North Dakota suggested, Senator Dorgan, we will be working on a group of amendments that everyone can agree to and doing those as just a package.

I believe Senator Vitter is the next speaker in order.

Amendment No. 4309

I ask unanimous consent that the managers' package be agreed to.

Mr. President, I understand we are now proceeding to the Boxer amendment.

Senator Kyl.

Mr. President, as I understand it, the next two amendments will first be Kyl, and then we will go to the DeMint amendment, which has been anxiously awaited by large numbers of people.

In between we agree to have a finite list, and we will read them and that will be it.

I ask unanimous consent that the Senator be given 30 seconds to discuss this very important amendment.

I ask unanimous consent that Senator DeMint get an additional 30 seconds so he can be heard.

I object.

No, not necessarily.

Why don't we just keep going?

We have an answer.

We need a vote.

Mr. President. I rise today to recognize the senior Senator from Colorado, Mr. Allard, for his service as a valued member of the Senate Budget Committee. Senator Allard and I have served through eight budget cycles together on the Budget Committee. This will be his last budget season as he has decided to retire when his term expires at the end of this Congress.

Since he joined the Budget Committee, Senator Allard has been an advocate for fiscal responsibility and a good steward of the taxpayers' money. I think this was made clear through his contributions this year, especially in the constructive amendments he has offered both in committee and on the Senator floor. Senator Allard will be missed as an important voice for fiscal discipline in this body and most notably as a member of the Budget Committee.

I also wish to pay tribute to Senator Domenici, who essentially defined what it means and how to be chairman of the Senate Committee on the Budget. The Senator has announced that he is not seeking to be reelected for the sixth time. That means that last week he participated in his last markup of a Budget resolution. This week is the last vote he will take on the Senate floor on a committee-reported budget resolution.

At the start of the 108th Congress, Senator Pete V. Domenici stepped down as the longest serving chairman, and the only Republican chairman, in the history of the Senate Budget Committee. Senator Domenici has either been the chairman or ranking member of the Budget Committee for nearly two-thirds of the committee's 34-year existence.

A member of the committee from 1975, one year after its formation, Senator Domenici held the chairmanship for 12\1/2\ years, and was the ranking member for 9\1/2\ years. During his time on the committee, Senator Domenici served with its first chairman, Edmund Muskie, and Muskie's brief successor, Senator Hollings in 1980. Domenici first became the Committee's Chairman in 1981, remaining in that position through 1986. After serving as ranking member from 1987 to 1994, he returned as chairman in 1995 and served in that role through May 2001. Over the years, he has served as the committee's ranking member to three Democratic chairmen: Senators Chiles, Sasser, and Conrad.

Looking back over his distinguished career on the committee, Senator

Domenici has been at the center of Federal budgeting. This year he is participating in his 34th congressional budget cycle. In 1981, he led the effort in the first major use of reconciliation as part of the budget process. He joined Senators Gramm, Rudman, and Hollings in 1985 to offer the first major reforms to the 1974 Budget Act. He was in the forefront guiding fiscal policy through the dark days of the stock market crash in the fall of 1987 that led to a major budget summit agreement in November 1987. Later he directed and guided the Senate in the budget summit of 1990 that resulted in the Budget Enforcement Act of 1990, which remained the basis of fiscal discipline through its expiration at the end of 2002. The pinnacle of his budget leadership occurred in 1997 with the historic bipartisan balanced budget agreement. Along the way, he helped craft the Credit Reform Act of 1990 and the Unfunded Mandates Reform Act of 1995.

For his successors as chairman--first Senator Nickles, and then myself--Senator Domenici's intimate knowledge of the budget process, much of which he helped invent along the way, and wise counsel have been tremendously valuable in helping us try to fill his big shoes. Senator Domenici will remain a legend whenever people talk about the congressional budget process, and I thank him for his service to the Senate and to the country.

Mr. President, a little more than a year ago, offices were being relocated, staffs were being reorganized, and Capitol Hill was readying itself for the change in majority in the House and Senate. The new majority's leadership and Budget Committee membership immediately set out to put in place pay-as-you-go rules that would fulfill Democrats' promise to return to ``tough, old-fashioned pay-go.'' What does ``old- fashioned'' or ``traditional'' pay-go mean?

In November 2005, during debate on a reconciliation bill that became the Deficit Reduction Act of 2005, the now Chairman of the Senate Budget Committee offered an amendment to change the Senate's pay-go point of order and stated, ``Our proposal is to go back to what has worked in the past. It is traditional pay-go.'' In March 2006, during debate on the FY 2007 budget resolution, the same Senator again offered an amendment to change the Senate's pay-go point of order and stated, ``This amendment would reestablish the budget discipline that worked so well in previous years, a rule that has been allowed to lapse by our colleagues on the other side of the aisle.''

These are just two examples. In fact, Democratic Senators have offered amendments to reinstate in the Senate ``tough, old-fashioned pay-go'' to every Republican budget resolution debated since 2004. They also proposed pay-go amendments to the 2005 tax reconciliation bill and during the Senate Budget Committee markup of the Stop Over Spending Act of 2006.

The Senate pay-go point of order amendments offered by Democrats when they were in the minority were remarkable in their consistency.

Every time Senate Democrats offered a proposal to reinstate the ``tough, old-fashioned pay-go'' point of order, the proposal required deficit neutrality in the first year of the budget, over the sum of years 1 to 5 and over the sum of years 6 to 10. For example, if such a point of order were in place for the 2008 budget resolution, it would require direct spending and revenue legislation to be deficit-neutral in 2008, 2008 to 2012, and 2013 to 2017.

Every instance of their proposal also included a cumulative pay-as- you-go scorecard, so that any net savings recorded from an enacted piece of legislation could be used to offset the cost of a future piece of legislation.

Why did Senate Democrats keep returning to the same version of the pay-go point of order? Because the Senate pay-go point of order was based on the original pay-go law, enacted in 1990 in the Budget Enforcement Act. That law put in place a 5-year pay-go scorecard that kept track of any accumulated deficit increases from enacted legislation. If, at the end of each year, the net effect of all enacted laws affecting revenues and mandatory spending was to increase the deficit, then the Office of Management and Budget was supposed to issue a sequestration order--an across-the-board cut of certain mandatory spending.

Statutory pay-go, in effect, was the original ``first-year'' test, enforced by sequestration. In 1993, Senate Democrats created a 5-year pay-go point of order, for the Senate only, that was based on and paralleled the pay-go law but relied on the sanction of a point of order instead of sequestration to encourage compliance.

But some Members sought to increase spending after the 5-year pay-go window so they would not run afoul of the initial 5-year pay-go point of order. So in a 1994 revision to this initial point of order, the Senate added a second 5-year test, which covered years 6 through 10 of the ``budget window,'' to have the point of order cover a 10-year period instead of just 5 years. Given all this activity on pay-go in the 1990s, some assert that the pay-go concept--without being specific about whether it was the pay-go law, the pay-go point of order, or both--was responsible for reducing the deficit in the 1990s.

No question about it--Democrats are on record in support of traditional pay-go, and that support was carried through as a major theme of many 2006 Democratic candidates' campaigns. We have heard again on the floor this week the familiar refrain: ``If you want to increase spending you have to pay for it. If you want to cut taxes you have to pay for it.'' And when Democrats returned to power in the Senate in 2007, their efforts appeared true to their past pay-go efforts and campaign promises--at first.

As one of their ``top 10'' legislative priorities for the 110th Congress, the new majority leader along with the new Budget Committee chairman introduced S. 10, the Restoring Fiscal Discipline Act of 2007.

S. 10 included a provision to install in the Senate the exact same ``old-fashioned'' pay-go point of order offered so many times over the previous 3 years, as summarized in Table 1. S. 10 was referred to the Budget Committee on January 4, 2007, but the chairman has scheduled no further action.

Following the pay-go promise set out in S. 10, the 2008 Senate-passed budget resolution did include the same ``old-fashioned'' pay-go point of order requiring deficit neutrality in each of the periods covering year 1, years 1 to 5 and years 6 to 10.

In contrast, the 2008 House-passed budget resolution did not include pay-go budget enforcement because a House pay-go rule had already been put in place. The House had never before had any kind of pay-go point of order--not until January 5, 2007, when the House agreed to its rules package in H. Res. 6 for the 110th Congress. Title IV of that package included the first-time-ever pay-go point of order that applies in the House.

The House pay-go rule makes it out of order to consider direct spending or revenue legislation that increases the deficit or reduces the surplus over years 1 to 6 or over years 1 to 11. So in the case of legislation considered during 2007, the relevant periods were 2007 to 2012 and 2007 to 2017; for 2008, the relevant periods in the House are now 2008 to 2013 and 2008 to 2018. Each measure is considered on a bill-by-bill basis; savings from one bill cannot be ``banked'' and used to satisfy the pay-go requirement for future legislation.

When it came time to arrive at a conference agreement on the 2008 budget resolution, there were two good reasons to think that the agreement would include the Senate pay-go point of order in the exact same form as was included in the Senate-passed budget resolution, which was the old-fashioned pay-go they advocated for years.

First, the pay-go point of order in the Senate-passed 2008 budget resolution applied only in the Senate. The House-passed budget resolution did not include any pay-go point of order for the Senate or the House because the House already had adopted one. So there was no reason for the conference agreement to compromise or deviate from the version in the Senate-passed budget resolution.

Further, Senate supporters of ``old-fashioned'' pay-go had repeatedly insisted over recent years and throughout the 2006 campaign on the same version of pay-go contained in the Senate-passed 2008 budget resolution and had pledged to return to it if they were in the majority.

Apparently, 15 years of Senate Democrats' support for ``old- fashioned'' pay-go was expendable when their conferees

on the 2008 budget resolution decided that the new, less-stringent time periods for deficit neutrality in the House rule weren't so bad after all. Currently, in the Senate's enforcement under the conference agreement on the 2008 budget resolution, the relevant time periods for measuring pay-go compliance are 2008 to 2012, the first 5 years, and 2008 to 2017, the 10-year period. The year 2007 is no longer included in the sum because 2007 is over.

But there is no test for the first year, which currently is 2008, and there is no test for just the ``second'' 5 years, which are 2013 to 2017, aka the 5 years after the first 5 years.

The rationale or excuse of the chairman of the Senate Budget Committee for this divergence from the pay-go rule that he had long promised was that the Senate wanted to be the same as the House. Of course that is nonsense.

Why does the House get to dictate the form of a point of order for the Senate? The Senate had a pay-go point of order for 13 years when the House never had one. If the Senate wanted to be like the House for all those years, the Senate never would have had a pay-go point of order in the first place.

The Senate has had, and currently has, plenty of points of order that the House does not have or that are different from the House's version of the point of order. If the Senate wanted to retain its old, tough first year test that it had from 1994-2006, it simply could have kept it, and all legislation would have had to clear that hurdle before it could be enacted, even if it was tougher than the House rule. This dynamic essentially describes the difference between the House and Senate anyway, where things can pass the House by simple majority and things almost always need 60 votes to pass the Senate.

And if the Senate really wanted to be the same as the House on the pay-go rule, then why does the Senate point of order not include some of the tougher features the House included in the House's new pay-go rule as shown in table 2.

For example, the pay-go point of order that applies only in the Senate as adopted via the 2008 budget resolution conference agreement measures any deficit effect of each bill against a pay-go scorecard. If the scorecard has a zero or negative balance on it, the legislation would have a pay-go point of order against it, unless the deficit increases are offset in the same measure. If the Senate pay-go scorecard has a sufficient positive balance on it, which represents a projected on-budget surplus or net decreases in the deficit accumulated from previously enacted legislation, then no pay-go point of order would apply against the measure.

In the House, there is no pay-go scorecard. Instead, each bill is independently evaluated by whether it increases the deficit, on net, over 6 and 11 years.

In addition, the House pay-go rule prohibits legislation that increases the on-budget deficit or reduces the surplus; the Senate rule only prohibits legislation that increases the on-budget deficit.

Despite their rhetoric about returning to good, old-fashioned pay-go enforcement, the Democrats' 2008 budget resolution changed their promised, long-sought Senate pay-go point of order to a much easier test that is now in place. Legislation cannot increase the deficit over the sum of 5 years or over 10 years. But for the first time since pay- go began back in 1990, legislation no longer has to be deficit neutral in the first year.

By throwing the first-year test overboard and swapping the old test for years 6 to 10 for a new 10-year sum, the Democrats' new pay-go point of order has encouraged timing shifts to make legislation look like it is paid for over the near-term, even if it isn't.

Consider a simple example starting with table 3A to see how this has worked. Under good, old-fashioned pay-go, let's say you wanted to increase spending or cut taxes by $9 billion in 2008 with no budgetary effect thereafter. To avoid an old-fashioned, traditional pay-go point of order, you would have had to come up with a $9 billion offset in 2008 so that there would be no net increase in the deficit, which would satisfy the first-5-year test and the first-5-years test.

But let's face it--under old pay-go, coming up with an immediate reduction in spending of $9 billion this year or increasing taxes by $9 billion this year would be supremely tough. So maybe you defer your spending to 2009 instead. Then you don't need an offset in 2008, and you could come up with an offset that reduces the deficit by $9 billion over the next 4 years--say by $2.25 billion in each of the years 2009 to 2012--and still not have a pay-go point of order, as shown in table 3B.

But maybe you don't even have an offset that is palatable over the next several years. Maybe the only offset you can come up with is to extend customs user fees past 2015, when they are currently slated to expire. For this example, table 3C shows that doing so would yield about $3 billion in customs fees in each year 2015 to 2017, for a total of $9 billion. Customs user fees have been around since 1985 and will likely continue to be extended forever since they are a favorite offset.

So under tough old pay-go, customs user fees would not save you from a pay-go point of order because extending them does not provide an offset when you need it--in the first 5 years. Good thing that Senate Democrats threw out old pay-go for a new version that would allow them to skip a first-year test and use offsets far in the future, like customs user fees, to pay for near-term spending as shown in table 3D. While this example shows the increase in spending in 2009, note that, because there is no first-year test, this approach would work just as well if you want to do your spending in 2008 instead of 2009.

But the trick of using customs user fees--which won't be collected until 7 years from now--to pay for spending today requires one more tweak. While customs user fees will satisfy the 10-year test of deficit neutrality, extending these in 2015 still would not satisfy the first 5-years test, as shown in table 3D.

So what to do? Do what many bills have already done in the 110th Congress do a timing shift as shown in table 3E. Specifically, tell corporations with assets of at least $1 billion to increase their corporate estimated tax payment due in the last quarter of fiscal year 2012 by a certain percentage. Also tell corporations that their first payment due in fiscal year 2013 should be decreased by the same percentage.

This progression of examples demonstrates that new pay-go is essentially only a 10-year test of deficit neutrality. The stricter tests of deficit neutrality in the first year and over the first 5- years have been dropped or emasculated, respectively. The corporate tax timing shift is the linchpin for meeting new pay-go's significantly weakened tests in the 110th Congress because it makes it possible to satisfy the first 5-year test when the only real offsets occur near the end of the 10-year period.

Table 4 shows that in the first session of the 110th Congress, six bills were enacted that include the corporate estimated tax shift. The Internal Revenue Code now says that corporations must send in $6.8 billion more to the Federal Treasury in 2012. Congress apparently thinks that corporations are OK with that, since corporations will send in $6.8 billion less in 2013.

In addition, there is $8 billion more in corporate tax shifts still in the wind, depending on the conference outcomes of the farm bill and energy tax provisions. Is there a point at which corporations say ``Whoa!''? Perhaps. If the House-passed ``paid for'' AMT patch for 2007 had become law, corporations may have had a hard time shifting nearly $32 billion in tax payments from 2013 into 2012.

In the past, these timing gimmicks have been occasionally used to fill in budget enforcement holes here and there by both Republicans and Democrats. However, in the 110th Congress, it seems like the corporate estimated tax payment shift is a required element in every direct spending or revenue measure.

I am surprised that timing shifts have become so prevalent, especially considering the criticism that the current chairmen of the Budget and Finance Committees have both raised in the past.

The Senator from North Dakota has argued that timing shifts don't pay for anything. During Senate floor debate on the 2004 highway bill he said: ``I believe that the spending in this bill, which occurs over six years, should be fully paid for over the same six year period. However, I do not believe that

the shift in corporate estimated tax payments is the most appropriate way to achieve the goal of fully funding this bill over six years. The provision proposed by the Chairman shifts a hole in general revenues from one year to another.'' He continued: ``I am counting on them [the Finance Committee Chairman and Ranking Member] to keep that commitment that in this Chamber, before this bill leaves the floor, that it will be paid for--and not by any timing changes; not by moving corporate receipts from 2010 to 2009, or any funny-money financing, but really paid for.''

The Senator from Montana levied similar criticism. During Senate Finance Committee debate on the 2004 highway bill, he said: ``The shift in corporate income in one year actually has moved forward, and then it is canceled out the next year. This is something that we can work [on]. To be honest, it is not something I am very comfortable with.''

Indeed, isn't pay-go supposed to be about ``paying'' for something? How does moving money 3 months forward pay for anything?

Supporters of the new pay-go who have bragged on its success throughout 2007 neglect to tell you about an important feature of their new, though not improved, rule. As the examples above demonstrate, because it no longer has a first-year test, new pay-go allows Congress to spend new money immediately, or cut taxes immediately, without an immediate offset.

Everything else being equal under our current Federal budget deficits, where does the Treasury go to get the money to pay for the new spending? To the credit markets, of course. Treasury has to go out and borrow the money to pay for the new spending or tax cuts today for as long as it takes for the offsets to kick in.

In the case of the example in table 3E, the offsets for the $9 billion in spending in 2008 do not start coming in until 2015 to 2017. The corporate tax timing shift only moves corporate payments forward by 1 month, which does not significantly affect Treasury's borrowing needs over the next 10 years. The Treasury won't be able to pay off all the principal amount of $9 billion until the end of 2017. By then, however, it will have cost Treasury $4 billion in interest to borrow that $9 billion for 8 to 10 years.

Does the new pay-go require that the $4 billion in interest costs be offset to satisfy the point of order? No.

Pay-go pretends that the Treasury does not have to borrow money in the near-term. But in fact, Treasury has no choice but to add to the debt, at least for many years, to provide for the new spending. If the ``debt is the threat,'' then why is it so virtuous that new pay-go requires the Treasury to borrow the $9 billion today and pay $4 billion in interest financing costs? This adds to the national debt forever the $4 billion in interest costs, which will never be offset under new pay- go.

By throwing away the discipline of a first-year test that had characterized all previous versions of pay-go from 1991-2006, the Democrats' current pay-go is now Wimpy's pay-go: ``I'll gladly pay you Tuesday for a hamburger today.'' What is a first-year test?--any spending increase or revenue reduction in the first year of a budget period had to be deficit neutral and therefore matched in that same year with an offsetting spending cut or revenue increase. But instead of a hamburger, Congress wants more spending today.

And instead of next Tuesday, Congress has decided to wait at least 5 or 6 years before starting to pay for the spending today.

Here are some specific examples from the first session of the 110th Congress to use in evaluating the actual experience with pay-go.

The U.S.-Peru Free Trade Promotion Agreement Implementation Act was signed into law on December 14, 2007. Over the next 5 years, the free- trade agreement part of the legislation increased outlays by exempting certain goods from customs merchandise processing fees by $27 million and reduced revenues through tariff phaseouts by $173 million, for a total 5-year deficit increase of $200 million. How was the deficit increase paid for? It wasn't paid for in 2008 or 2009 or 2010 or even 2011 and $465 million of corporate taxes were shifted into 2012 from 2013. Is it paid for yet? Well, the test for deficit neutrality in the first 5 years was satisfied, but the shift created a hole in the second 5 years. How was this hole filled? By our old friend, of course-- customs user fees.

Under the law that existed at the beginning of the 110th Congress, customs user fees were set to expire on September 30, 2014. So far this Congress, five bills have been enacted that have extended these fees for 1 week, 2 weeks, and 2 months. The U.S.-Peru Free Trade Agreement increased the fees for 2 months through December 13, 2014, resulting in $485 million additional fee collections in 2015. Subsequently, the Andean Trade Preference Extension Act extended the fees through December 27, 2014.

Table 5 illustrates that the only real offset for the new spending that happens in years 2008 through 2015 is the customs user fee extension in 2015.

The Senator from North Dakota is fond of saying that prior to enactment of the 2007 AMT patch in December 2007, there was a ``surplus'' on the pay-as-you-go scorecard.

Consider in table 6 all of the bills with pay-go effects, except the AMT patch, that were enacted during the 1st session of the 110th Congress. The first line summarizes the pay-go effects of the six enacted bills that used the corporate tax timing shift. You can see that bills with the shift increased the deficit in each and every year until 2012. In 2012, the six bills reduced the deficit on net by $8.7 billion, then increased the deficit by $5.3 billion in 2013.

The second line of table 6 summarizes the pay-go effects of all the other bills enacted during the first session. You can see that these bills increased the deficit in 2008, 2009, and 2010, and only begin to reduce the deficit in 2010.

The total line shows that in 2007 to 2010, all of these bills increased the deficit by a total of $10.7 billion. Then how can there be a ``surplus'' on the pay-go scorecard? Because of the big, bumpy deficit reduction that takes place in 2012, thanks mostly to the corporate tax payment shifts. If the interest impacts of spend now, pay later were taken into account, there would be only a very small surplus on the scorecard in the first 6 years and a deficit of $1.5 billion over 11 years.

Nonetheless, the chairman of the Senate Budget Committee is fond of saying, as he did during Senate floor debate on the Food and Energy Security Act of 2007 on November 16, 2007, that ``pay-go is not full of holes . . .[but] don't take my word for it. We can look to the nonpartisan Congressional Budget Office.''

Actually, when you look at the cost estimates that the nonpartisan Congressional Budget Office has prepared during the 110th Congress, you will not find one word about pay-go. CBO's job is straightforward: it prepares estimates of the budgetary effects of legislation and displays them in each year for a 10-year period. A CBO cost estimate has never ever evaluated whether a House or Senate point of order applies against legislation or determined whether a piece of legislation complies with the budget resolution. That is the job of the chairmen of the House and Senate Budget Committees, most often using CBO estimates to inform those determinations, but sometimes using alternate estimates.

For example, last year, the House Budget Committee chairman overrode a scorekeeping rule and directed CBO to score savings for a particular provision in the House farm bill--without this directed scoring, the House farm bill would have violated pay-go. It was the House Budget chairman who decided whether the House pay-go point of order applied against the House farm bill. CBO did not decide. In addition, it was CBO's estimate of the farm bill that let Congress know that some of the cost of the Senate farm bill was deferred to after the period of pay-go enforcement. So the Senate was dodging pay-go by hiding new spending from the enforcement period. CBO did not say that the Senate complied with pay-go, nor did it say that the Senate dodged pay-go. But any user of CBO's estimates would come to the conclusion that pushing spending outside the enforcement window is avoiding pay-go.

In addition, CBO does not evaluate the merits of ``policy'' in its cost estimates. CBO estimates the budgetary incidence of early sunsets and payment shifts exactly as written in legislation, gimmicks though they are. CBO's job is

to simply provide the estimates of budgetary effects year by year. It is the budget chairmen who then say ``CBO estimates this bill reduces the deficit'' while abdicating themselves from responsibility for the gimmicks.

Finally, the Senate Budget Committee chairman likes to point to the bottom line of table 6 to illustrate how well pay-go has worked because there was a pay-go scorecard surplus for a brief period in the fall. But was there really a surplus? Over the 2008 to 2012 and 2008 to 2017 periods, respectively, the pay-go surplus was $1.988 billion and $1.311 billion.

But what the scorecard omits is a cost of spending now and paying later that the Treasury does not have the luxury of ignoring. Because of enactment of all of these bills, the deficit is now increasing by $10.7 billion over 2007 to 2010. The Treasury has no choice but to go out right now to the credit markets and borrow $10.7 billion, and will have to pay $2.8 billion in interest costs over the next 10 years until all the offsets in these bills finally come in and allow the Treasury to pay off that borrowing. Not only does that unrecognized interest cost get added permanently to the debt, but it is also so large that it more than wipes out the supposed and ephemeral pay-go scorecard surplus of just over $1 billion.

But another bill wiped out the surplus on the pay-go scorecard first. The enacted AMT patch increased the deficit by $50.6 billion in 2008 because it was not offset and it did not comply with pay-go. Before it passed both the Senate and the House without an offset, the House passed a ``paid for'' AMT patch with the deficit increase in 2008 and actual offsets in later years. The House bill only satisfied the 2008 to 2012 deficit-neutrality test for pay-go by using a corporate estimated tax shift of $32 billion from 2013 into 2013.

Finally, let me address some of the protestations of the Budget Committee chairman about my criticisms about the spotty enforcement of his vaunted pay-go rule after this past year.

For example, I have criticized the gimmick of enacting a one-month extension of MILC in the 2007 supplemental in order to get mandatory MILC spending in the baseline and avoid pay-go enforcement to the tune of $2.4 billion over 10 years. My summary of this gimmick is as follows:

The story starts with confusion about how budget rules work. Consider a recent example, fueled by misinformation from congressional sources, from a daily Capitol Hill publication dealing with a provision to extend subsidies to certain dairy farmers--known as the Milk Income Loss Contract Program, or MILC--in the House- and Senate-passed versions of the 2007 supplemental:

CBO has not included MILC in the baseline for the new farm

bill because [MILC] was scheduled to [expire at the end of

August 2007], but [Senator] Kohl said in a release that the

extension to the end of . . . fiscal year [2007] ``will also

build the cost of the dairy program into the baseline budget

for the next farm bill.'' The [House-passed] version [of the

2007 supplemental] . . . extends the MILC program for 13

months at a cost of $283 million, but the extension is as a

discretionary program, which means CBO would not include it

in the baseline. A Democratic House aide said the House did

not include it as a mandatory program because under budget

rules the bill had to account for the full 10-year cost of

the program, which CBO estimated at $4.2 billion. But the

Senate did not have that problem because it does not have

similar budget rules.

To understand why this is a confused statement requires minitutorials on several facets of budget enforcement history and rules.

The Budget Enforcement Act of 1990 established a two-sided budget enforcement system designed to measure the budgetary effects of every piece of legislation enacted by Congress and compare those effects against a standard of enforcement.

One ``side'' of enforcement was defined as discretionary spending-- that is, spending provided in annual appropriation bills. The enforcement standard was discretionary caps or limits set out in law for a period of 5 years. If appropriations for a year exceeded the discretionary cap for that year, then the Office of Management and Budget would order a sequester--an across-the-board reduction of appropriations of a sufficient magnitude so that the remaining appropriations could fit within the cap.

The other ``side'' of enforcement was pay-as-you-go, or pay-go, which covered all spending provided in all legislation that is not an appropriation bill, aka mandatory spending, and all legislated changes in Federal revenues. If, at the end of a year, all the mandatory spending and revenue legislation enacted by Congress cumulatively increased the deficit relative to the OMB baseline, then OMB would order a sequester of mandatory spending. All mandatory spending that was not exempted would be cut across-the-board to achieve savings corresponding to the amount of deficit increase enacted by Congress that year.

That sounds easy since there are only two kinds of enforcement discipline to worry about. To make things even easier, the joint explanatory statement of managers in the conference report on BEA included a list of all accounts at that time that were to be considered mandatory. Of course, the universe of spending accounts in the budget never remains static. So to anticipate future changes, as well as the likelihood that Congress may occasionally decide to make changes in mandatory spending programs in appropriation bills, or vice-versa, the statement of managers also included the following scorekeeping rule number 3 in a larger set of scorekeeping guidelines:

Entitlements and other mandatory programs, including

offsetting receipts, will be scored at current law levels as

defined in section 257 of the Balanced Budget and Emergency

Deficit Control Act, unless Congressional action modifies the

authorization legislation. Substantive changes to or

restrictions on entitlement law or other mandatory spending

law in appropriations laws will be scored against the

Appropriations Committee section 302(b) allocations in the

House and the Senate.

Put another way, rule number 3 means that if an appropriation bill makes a change in what has in the past been a mandatory program, then the appropriation bill is the bill that gets charged with the cost or gets credit for the savings. That change is counted against the bill's discretionary limit, aka the 302(b) allocation.

If an authorization bill, which is any bill that is not an appropriation bill, makes a change to mandatory spending or previously enacted discretionary appropriations, then that authorization bill is scored with the cost or credit and that bill is measured under pay-go. Scorekeeping rule 3 has often been colloquially paraphrased in the following way: ``He who does the deed gets charged with the cost or the credit.''

So how did this work in practice? Consider in the following table some stylized discretionary caps roughly equivalent to the levels enacted for the last 5 years for which BEA discretionary caps and pay- go were in effect. Those statutory enforcement mechanisms expired at the end of fiscal year 2002; similar, but not equivalent, mechanisms for discretionary caps and pay-go that are enforced by points of order rather than sequesters have continued in the Senate since then. Last year the House adopted a pay-go point of order for the first time.

Assume all the appropriation bills for 1998 provided in aggregate the exact level of discretionary spending allowed for that year--$530 billion. Since the enacted level for all appropriation bills did not exceed the cap, there would be no sequester.

Out of this total, what if the Agriculture appropriation bill for 1998 included a $2 billion annual increase in a mandatory program that had been created by the agriculture authorizing committee in the 1996 farm bill? Budget experts will recognize this concept as a CHIMP, or Change In Mandatory Program. For purposes of scoring the 1998 Agriculture appropriations bill, the $2 billion increase would be considered discretionary spending in every year, even though it was for an existing mandatory program, because it was enacted in an appropriations bill, not an authorizing bill. This $2 billion increase in a mandatory program would not count against pay-go.

So where would it count? For 1998, the answer is straightforward--the $2 billion cost of increasing the mandatory program in 1998 would count against the discretionary cap of $530 billion for that year.

But what about subsequent years? Since the appropriation bill for 1998 is only measured against the 1998 discretionary cap, how would the ``do-er'' get charged for the ``deed'' of increasing

the cost of a mandatory program by $2 billion in 1999 and each year thereafter? By reducing the amount that the appropriations committee would be able to spend in future years under their discretionary caps.

OMB would simply reduce the discretionary cap in each of those subsequent years by $2 billion. In 1999, the $2 billion in higher spending on farm bill programs would appear back on the mandatory side of the budget, which is known as ``re-basing'' in budget-speak, but its effects would not have escaped enforcement because the 1999 discretionary cap would be reduced from $535 billion to $533 billion and so on for as many subsequent years as there are statutory caps. Under this system, no one could get away with free mandatory spending by hiding it in a different legislative vehicle to avoid pay-go.

When BEA and some supermajority budget points of order in the Senate were about to expire late in 2002, many Senators were concerned that there would no longer be any budget enforcement, especially since there was no budget resolution for 2003.

After several failed attempts to extend the statutory enforcement of BEA, the Senate settled for adopting S. Res. 304 by unanimous consent on October 16, 2002. For a 6-month period, until the next budget resolution could be agreed to, S. Res. 304 extended the 60-vote requirement for waiving certain points of order, extended the Senate's pay-go point of order, and applied the pay-go point of order to appropriation bills.

Why suddenly apply pay-go to spending in appropriation bills? Because there was no budget resolution or deemer for 2003, the chairman of the Senate Appropriations Committee did not have a discretionary allocation for 2003 and was concerned that members would want to load up new mandatory-type, permanent, automatic spending programs or increases in existing mandatory programs on his appropriation bills to avoid pay-go.

If those mandatory programs were enacted in authorizing bills, they would have continued to face a pay-go point of order because S. Res. 304 also extended the expiration date for the pay-go point of order. But since there was no discretionary allocation for appropriation bills for 2003, there was no budget enforcement for appropriation bills. Mandatory spending programs attached to appropriation bills would not have to be counted against anything. There would have been no 60-vote point of order to thwart them.

In addition to persuading the Senate to adopt S. Res. 304 to discourage such behavior, the chairmen of the Appropriations Committee and the Budget Committee went so far as to issue a warning to members: If a provision to increase a mandatory program for later years was somehow enacted on an appropriation bill, those two chairmen promised to see to it that whatever allocation that would have occurred for future years would be reduced by the amount of the mandatory spending added to the appropriation bills. But remember, there were no longer discretionary caps set out in law in advance for future years; instead, discretionary allocations were set on a year to year basis. This saber rattling seemed to do the trick, but only temporarily since S. Res. 304 expired on April 15, 2003.

For the next 4 years, 2003 to 2006, the only supermajority point-of- order tool available to prevent increases in mandatory spending programs from hitching a ride on appropriation bills was the advance appropriation point of order. Remember that until very recently, since enactment of BEA in 1990, when changes to a mandatory spending program are added to an appropriation bill, even if the changes seem mandatory- like, they have been considered as discretionary spending for purposes of budget enforcement on that bill.

Therefore, budget authority for mandatory spending activities provided for future years in an appropriation bill is considered a discretionary appropriation. The advance appropriation point of order in section 401 of the 2006 budget resolution, H. Con. Res. 95, 109th Congress, has included a definition of the term that captures this scoring practice: ``the term `advance appropriation' means any new budget authority provided in a bill . . . making general appropriations . . . for fiscal year 2007, that first becomes available for any fiscal year after 2007.''

With the advent of the 110th Congress and a new chairman of the Senate Budget Committee, however, the Senate Parliamentarians--contrary to precedent in the 108th and 109th Congresses--have decided that this definition of advance appropriation somehow no longer applies to budget authority in appropriation bills when that budget authority results from changes in mandatory programs. As a result, folks in the Senate have flocked to the 2007 supplemental appropriations bill to augment their favorite mandatory programs for free.

For example, the Senate-passed version of the supplemental included the Wyden amendment, adopted on the Senate floor, that would extend ``county payments'' under the Secure Rural Schools and Community Self Determination Act from 2008 to 2012 at a cost of $2.2 billion. Proponents of this program, which was initially enacted as a temporary, transitional program in 2000, have fretted for the past several years about the imminent expiration of the program and how they could find sufficient offsets to pay for its extension.

The proponents were not able to convince the authors of the 2008 budget resolution to include a sufficient allocation to the Energy Committee to cover authorizing legislation to extend the program. But adding the extension to the supplemental means they did not have to pay for it under pay-go. The sponsors of the county-payments amendment claimed that they ``offset'' the cost by increasing various revenues, but the revenue provisions add up to only $0.2 billion over 2008 to 2012, which is $2.0 billion short of offsetting the cost of the amendment.

The amendment did include other provisions that pretended to raise revenues, but those provisions--amounting to $1.4 billion over 2008 to 2012--had already been incorporated by unanimous consent into the supplemental through the minimum wage amendment, and you cannot use the same offsets twice in one piece of legislation. Regardless of the amount of the supposed revenue offsets, any revenue increases enacted in the supplemental will go on the Senate's pay-go scorecard to be available to be spent on some other authorizing legislation in the future. Revenues cannot be used to offset spending in an appropriation bill.

Finally, also consider the confusing tale of MILC. MILC is a farm- bill program that makes payments to certain dairy farmers. MILC was intentionally scheduled to expire on August 31, 2007, unlike most of the other farm bill programs that were scheduled to expire on September 30, 2007, with some variation depending on the type of crop. When Congress first enacted the MILC Program, it designed it that way on purpose so MILC would not be continued in the CBO baseline; consequently, MILC was not continued in the CBO baseline for 2008 to 2017, while the rest of the farm bill was by and large continued in the baseline.

In an authorization bill reported from the Agriculture Committee, an extension of MILC for 1 month--making it expire at the same time as the rest of the farm bill--would have allowed the program to receive the same continuing-in-the-baseline treatment as the rest of the farm bill. But then that authorization bill and the Agriculture Committee would have had to pay for the extension with an offset for the last month of 2007 as well as for the subsequent 10 years or else be subject to the 60-vote scrutiny of the pay-go point of order. Proponents of MILC were not able to convince the authors of the 2008 budget resolution to include a sufficient allocation to the Agriculture Committee to cover authorizing legislation to extend the MILC Program. But with the option of the 2007 supplemental, it appears they did not need to.

While a 1-month extension of MILC was added to the Senate supplemental, it is not automatic--contrary to the suggestion in Senator Kohl's press release cited earlier--that CBO will ``build the cost of the dairy program into the baseline budget for the next farm bill.''

What happens instead is that CBO consults the chairman of the Senate Budget Committee on whether the Budget Committee wants CBO to continue an expiring mandatory program in the baseline. Note that in the case of

county payments mentioned above, the current Budget chairman had advised CBO not to extend the payments in the baseline after they would have expired under the supplemental at the end of 2012.

But in the case of the 1-month extension of MILC in the Senate-passed supplemental, the current chairman of the Senate Budget Committee has instructed CBO to parlay that 1-month extension, which cost $31 million, into a $1.2 billion increase in the 5-year allocation to the Agriculture Committee, or $2.4 billion over the 10-year enforcement period under pay-go, all without any offset or any 60-vote budget enforcement opportunity.

The chairman could have just as easily directed CBO not to assume continuation of MILC in the baseline, which is what Budget Committee chairmen have advised CBO to do about MILC in the past and what the current chairman did in the case of county payments. That would have prevented a $2.4 billion dodge around pay-go. Instead, the chairman chose to exempt MILC from the pay-go discipline.

The House-passed supplemental also included an extension of MILC, although it did so without amending the existing MILC law. In contrast to the Senate, the House supplemental simply appropriated money to USDA to make MILC-like payments to dairy farmers as if MILC were still in effect for the 13 months after August 31, 2007.

Even so, the distinction made in the news article cited earlier about the House extending MILC as a discretionary program and the Senate extending it as a mandatory program is misleading. MILC is by definition a mandatory program because it was created by an authorizing committee. However, any changes made to the MILC Program in an appropriation bill are considered discretionary for purposes of evaluating that appropriation bill for budget enforcement, regardless of whether MILC is extended by tweaking language in existing law or by creating parallel new language.

Further, the Democratic House aide cited in that article is not correct that ``under [House] budget rules that [House supplemental] bill had to account [with an offset] for the full 10-year cost of the [MILC] Program'' if the MILC program were going to be extended for that long. Note that the House supplemental did not ``pay for'' the $283 million cost of extending MILC through 2008; it just designated it as an emergency to avoid budget enforcement.

Why was the House aide incorrect? Because the House pay-go point of order does not apply to appropriation bills in the House. After the House adopted its pay-go rule in January 2007, there was some initial confusion and unsettledness about which legislation its pay-go rule would apply to. But now it is clear that the House pay-go rule applies to authorization bills only.

The House appropriators, however, do not want their bills to become the vehicle of choice to carry increases in mandatory spending programs that cannot find offsets in authorization bills to fit under the House pay-go rule. So, it is only the persuasive jawboning by interested parties, such as the chairman of the House Appropriations Committee, that has thus far been able to keep House appropriation bills nearly free and clear of multiyear changes in mandatory spending.

At least the House seems committed as a matter of practice, even if not as a result of its rules, to preventing its appropriation bills from becoming a huge loophole for avoiding pay-go enforcement. However, the Senate has shown no such restraint since it added $4.6 billion in mandatory spending increases over the next 10 years for county payments and MILC alone to its version of the 2007 supplemental.

There is a way to close this pay-go loophole. One way would be to reinstate the enforcement of pay-go for appropriation bills that the chairman of the Appropriations Committee succeeded in providing for six months in 2002 to 2003 through S. Res. 304. The Appropriations chairman, however, now opposes that approach.

Another way would be if the conference report on the 2008 budget resolution had included an amendment offered by the chairman of the Budget Committee and myself, which was adopted by UC during Senate debate on that budget resolution. The amendment would have created a 60-vote point of order against net increases in spending for mandatory spending programs on an appropriation bill.

In fact, the conference report did include a weakened version of the Gregg-Conrad point of order that the Senate passed. But that weakened point of order exempted the 2007 supplemental. So there was no 60-vote point of order available to strip the MILC provision out of the supplemental. The Budget Committee chairman's excuse is that he did not want to change the rules in the middle of the game while the supplemental was being considered at the same time as the 2008 budget resolution.

But this is nonsense. If the MILC provision had instead been in an authorizing bill at that time, the pay-go point of order that was already in place in the Senate would have made it possible to subject the MILC provision to 60-vote scrutiny. That was the rule already in place at the time. By hiding the MILC provision in the supplemental and getting the Parliamentarian to change the precedent on what constituted an advance appropriation, that was changing the rules in the middle of the game in order to protect the MILC provision and, even more importantly, to stock the farm bill baseline with $2.4 billion more in spending that would never be subject to pay-go.

Some other things that the Budget chairman has wrong about pay-go are as follows.

He said this week that pay-go matters only when bills are enacted. This is exactly the opposite of the truth. Pay-go is a point of order. A Senator cannot raise a point of order after a bill has been enacted into law. The pay-go point of order is only worth anything when the Senate considers a bill before sending it on to conference; seldom do conference reports get blown up by a point of order.

The chairman also said pay-go has been defended nine times since the 2008 budget resolution was put in place and that it was never waived, so that is an indication of how successful and wonderful it has been. But I count only eight times that a pay-go point of order was raised since adoption of the 2008 budget resolution conference report, and in each and every instance it was raised against amendments offered to bills brought to the floor. The pay-go point of order has not yet been raised in its current incarnation against any of the several bills brought to the floor that by themselves violated pay-go.

The Budget chairman is defensive about pay-go. He should be. The pay- go he defends is not the pay-go that he promised for years that we would have if only his party were in charge. Now that he is in charge, pay-go is watered down and incredibly easy to gimmick or avoid.

I ask unanimous consent that the tables to which I have referred be printed in the Record.

Mr. President, I know everybody wants to head off quickly, but I have to take a minute to first thank Senator Conrad for his professionalism in leading this bill. Although we disagree, I greatly admire the way he managed this bill. He did an extraordinary job.

I also thank his staff, led by Mary Naylor. They are extremely professional. Everybody's staff around here spends extraordinary time, a lot of time away from family. We thank them for everything they have done.

In particular, I wish to thank all my staff, first and foremost, Denzel McGuire, who wears many hats for me. In addition, the rest of my Budget Committee staff have worked tirelessly:

Cheri Reidy, Allison Parent, Jim Carter, David Fisher, Jay

Khosla, Melissa Pfaff, Liz Wroe, Amy Tenhouse, Matt Giroux,

Nancy Perkins, Kevin Bargo, Greg McNeil, Mike Lofgren, Betsy

Holahan, Emma Post, David Myers, Jim Hearn, Giovanni

Gutierrez, Winnie Chang, and David Pappone.

I wish to acknowledge that this is the last budget in which Pete Domenici--regrettably, he is not here right now--will participate. He is, obviously, the father of the budget process, along with Senator Byrd. His commitment to this budget process is extraordinary, and his impact on this Congress is extraordinary. I wanted to acknowledge that.

Mr. President, I rise this morning to say this is a big, big, big day for the chairman of the committee, and I know he would not want this day to go unacknowledged after having made such an eloquent statement. But it is the chairman's 60th birthday today. So I congratulate him and say, on his 60th birthday, we appreciate all he has done for the last 60 years, and we hope he will be here for another 60 years.

I yield the floor.

Mr. President, I ask unanimous consent that after Senator Bingaman has spoken on his amendment, and to the extent Senator Alexander wishes to speak, that we then, after that, go to our side for the next amendment.

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

Mr. President, I ask unanimous consent that the present amendment be set aside, and on behalf of Senator Specter, I send an amendment to the desk.

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

Mr. President, Senator Specter will talk about this amendment. Essentially, this amendment would repeal the AMT permanently, as it relates to middle-income Americans. It is currently wrong that we have this tax. It was never intended to be a tax that would cover 20 million Americans. It was supposed to hit high-income individuals who were avoiding taxes, using legal tax vehicles but basically avoiding paying any income tax. It has turned into a monster where literally 20 million Americans would be subject to the tax unless it is adjusted.

This budget presumes that it will be abated for this year. There is no reason to keep these revenues in the baseline because we know we will do this again next year and the year after that. It is time to correct this permanently and stop having these illusory revenues, which we turn around and spend, and it creates inappropriate expectations and leads to less fiscal discipline here.

This is an attempt to address the issue by essentially repealing the AMT and addressing the fact that if we don't do this, 20 million Americans will be hit with this tax, and that was never the intention of the Federal Government, to get revenues from them. It is wrong to have it on the books.

The Senator from Pennsylvania will come over to speak to this around 11:30 or so. The Democratic side may have another amendment relative to this issue.

I did.

Amendment No. 4190

I don't see why we cannot put the Kyl amendment in there also.

Mr. President, just to clarify this, other Members may come in and talk during this time. The concept is that this hour is fluid. If other Senators show up and talk, it will not be off of these amendments.

Mr. President, the understanding is that these are the amendments that are actually in line: Specter and Conrad, and Kyl and Conrad. Those are the amendments actually in the queue.

Mr. President, the regular order would not be that they would be--we understood that you could offer them as second degrees if you put them in that position.

I believe so. We don't know when he will be available. I would like the Bunning amendment to be after these. So the next amendment would be the Bunning amendment.

Correct.

I have not spoken to Senator Bunning yet, so we will reserve on that.

Would the Senator yield for a question?

Is it my understanding you are telling us how many people are

going to die in 2009 in this part of the Democratic budget; that you are projecting deaths in 2009 to be 7,000?

If the Senator would yield further, I wanted to clarify where the number came from. I did not know if the Senator, as chairman of the Budget Committee, was calling on this number of people to die during 2009 for the chart?

Will the Senator yield?

I wish to note the Senator from Illinois described these people as the lucky 7,000. They are dead. I guess only if you are from Chicago do you consider it lucky to be dead. They can still vote.

I understand the Senator from Arizona feels these numbers are inaccurate. I know they are inaccurate. I wish to comment further on the Senator's amendments.

Will the Senator yield?

As I understand your proposal, which, if I recall correctly, got 56 votes in this body last year

I wish to ask the Senator further, through the Chair: As I understand the proposal, estates over $10 million would continue to be subject to full estate tax obligation; is that correct?

So we aren't talking about the wealthiest Americans. We are talking about people with significant wealth, up to $10 million. But a family farm can easily be valued at $10 million. A small business, a restaurant could easily be valued at $10 million. A small software company could easily be valued at $10 million. So we are talking about continuing, without major tax consequences, small businesses and farms that otherwise would be subjected to a very onerous tax which might put them out of business; is that not correct?

If I may ask a further question, I think the Senator's anecdotal story is one everybody has seen innumerable times in their home States: Small businesses put out of business or put under distress as a result of the death of a principal in the small business due to the estate tax, the death tax. After finishing law school, I went back for 3 years and got a master's degree in taxation, which was one of the most foolish things I ever did. It only proved to me the tax law is totally inane. But I don't believe in the tax law there is any other place where there is such a penalty of tax assessment for an act which has occurred without any economic event. In other words, the only thing that generates this tax is not that you sold a business or built a business or that you were involved in some transaction. It is that you got hit by a truck crossing the street, which is not an economic act. Isn't that why this tax makes no sense on the face of it, especially for smaller estates that involve small businesses? It is a noneconomic event. It is a ``comes out of the blue'' type of an event. You die, unfortunately. If you get hit by a truck, you get sick, any number of events can cause that event to occur, but it is not something you have control over and, therefore, you can't create economic activity around it which is going to give you the wherewithal to pay the tax. Is that not true?

It is called casualty loss.

I ask unanimous consent that the Senator be allowed to continue and the time come off the resolution.

The Senator was pointing out that there are three elements of casualty loss. Two of them you are not taxed on and this one you are. And it is the ultimate casualty, dying.

As a final question--I think it needs to be emphasized--is it not true that this doesn't exempt all estates? This exempts estates up to $10 million, which are probably going to be small businesses or small farms?

Well, Mr. President, Senator Conrad, I think, was going to straighten this out. But I think the plan now is to go to Senator DeMint. He needs approximately 20 minutes. Then there would be whatever time the Senator from North Dakota plans to respond. Then we will go to Senator Bunning.

I see Senator Specter who also has an amendment. Maybe he wants to speak.

Senator Bunning is going to be offering an amendment, so we can do his off his amendment.

Mr. President, I ask that the unanimous consent request be modified as recognized for the purpose of speaking but not for the purpose of offering an amendment.

Mr. President, I ask that the amendment for Senator Specter be called up. It is at the desk.

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

I ask unanimous consent that after Senator Dorgan sends his amendment to the desk, that then Senator Alexander will be recognized to offer an amendment.

Then the next amendment would be Senator Alexander.

Mr. President, as I understand it, the sequence would be, of the amendments just offered, that the side by side for Senator Bunning of Senator Conrad, followed by Senator Specter, followed by Senator Dorgan, followed by Senator Alexander, who has not yet sent his to the desk.

In the intervening period, I understand the chairman wishes to take some time. That is my understanding.

Then we will call up Senator Lincoln's amendment?

Then we are supposed to go to Senator Alexander.

If the Senator will yield, then we will be out of order.

Senator Sununu tells me he only needs 5 to 10 minutes.

Mr. President, the game plan, as the Presiding Officer laid out, is to go to Senator Alexander and then come back. We will go to the Sanders amendment and then come back. I am not sure which is next, but there will be another amendment from our side.

I wanted to respond briefly to Senator Sanders. I respect Senator Sanders because he believes fervently in his view of the way Government should work, which is, we should keep making it bigger and keep raising taxes to accomplish that. I have to disagree with the basic philosophy that the present tax law isn't effectively raising taxes from high- income Americans. The simple fact is, over the last 4 years especially, we have seen a higher growth in revenues than we have ever seen before. That growth in revenues has come from wealthy, high-income Americans.

Today under this tax law, we have a more progressive tax system than was in place under President Clinton. The lowest 40 percent of wage earners who don't pay income taxes, for all intents and purposes--some pay, but the majority do not; they actually get money back under the earned income tax credit--are getting about twice as much back today under our tax laws than they got back under President Clinton's term. The highest percentage income earners, the top 20 percent, are paying more into the Federal Government than they were paying into the Federal Government under the Clinton years. I think it was 82 percent of Federal revenues came from the top 20 percent of income tax payers under President Clinton. Today almost 85 percent of revenues come from the top 20 percent of income earners. That is a progressive system-- lower income people getting more back; higher income people paying more of the burden.

The reason it works this way under our tax laws is that we have created a fair and level playing field where people are willing to do taxable investment. Somebody who has income of significant levels has two options. They can take action to invest in a way which takes risks and generates jobs and also is taxable, or they can take action which takes risks, hopefully generates jobs, and probably isn't taxable because they use our tax laws in order to legally position their money so they don't have to pay the tax burden. It is only human nature, as has been proven over and over again, that if you get the tax rates up too high, higher income people start to use legal means to reduce their tax burden. But if you get the tax burden set correctly, then higher income people take the risk, pursue entrepreneurship, and create jobs, all of which generates income to the Federal Government. That is what is happening today.

I will yield after I finish making my comment.

The point is, what is the right tax burden. If you have a progressive system where 85 percent of your revenue is coming from one group, the high-income people, and the bottom income folks are getting much more back than they got back historically, you have a progressive system. If you are generating more revenue than you have ever historically generated over a 4-year period, and you are well above the average amount the Federal Government receives, then you have a pretty reasonable tax structure which is giving a fair amount of revenue to the Federal Government. In fact, as a percent, we are well over what is the norm over the last 20 years.

I argue that the tax structure which we presently have in place is working to the benefit of the Federal Government in getting more revenue which is being spent rather aggressively by the other side of the aisle. The Senator from Vermont says: Let's just raise it some more. Raise that tax some more, and we will get even more revenue. I would argue that when you start to jump those rates back up, you will probably not get more revenue. You will dampen economic activity. You will cause people to take action which causes them to invest in a way which reduces their tax liability. You will probably end up reducing revenues with that type of action. It is human nature, and human nature in a capitalist system tends to produce revenues when you have fair taxes and tends to reduce revenues when you have an overly burdened tax system.

I am happy to yield.

My answer to the Senator from Vermont is, we get two things from Vermont and New Hampshire: bad weather and bad economics.

At this point, I will yield the floor and allow the Senator from Tennessee to pursue his amendment.

Madam President, if the Senator has time, I will be happy to try to respond to a question.

Madam President, if the Senator will yield, it is the Senator's time, so let me put it in the form of a question to ask him back.

It is my understanding--and I believe the Senator would agree with this--at the time it was supposed to be the top 1 percent of taxpayers. It turned out it exploded over the years. It was supposed to apply to 1 million people. It has ended up applying to potentially 20 million people.

Madam President, if I could ask a question of the Senator from Nebraska, this is $3.5 billion in spending which would occur in this budget year, not over the 5 years; is that correct?

This is not offset in any way, so it would just be added to the deficit; is that correct?

So if I could ask the Senator another question, the Senator from Nebraska is saying that his amendment simply reallocates the $35 billion----

But there was $35 billion put in the mark that was available for stimulus. Is the Senator reallocating those dollars or is the Senator putting $3.5 billion on top of those dollars?

And if I could ask further, where is the Senator taking the money from?

So this is not a 920--this is not offset with a cut in the 920?

I am not sure I understand how this is paid for, to be honest. Maybe the chairman can help.

Madam President, if I could reclaim my time, I think the explanation is that this is a reallocation within the $35 billion which was in the original budget, which basically was added to the deficit.

Thank you. I think Senator Sessions is ready to proceed.

I think the key to what the Senator from Alabama said is that we alternate chairmanships, and it is my turn.

We wish to see the amendment.

I am not sure the Senator from Texas heard that discussion.

If I could interject, what has happened is the Parliamentarian desires a few minutes to look at the amendment of the Senator from Texas. We thought we could grant him that and then during that period have Senator Reed speak for 5 minutes and then come back to the amendment of the Senator from Texas, which would remain pending.

I was wondering if we could set the order here before we go back to the Cornyn amendment.

If the order is now, the Cornyn amendment is the regular order, that would be followed by the Pryor amendment in the voting sequence, followed by the Allard amendment, followed by a side-by-side to the Allard amendment.

And then after this discussion, we would turn to Senator Biden.

Madam President, I ask if the chairman would be agreeable to recognizing Senator Allard around 5:15 and that debate on his amendment and any substitute to his amendment be for 1 hour, up to an hour equally divided.

Absolutely.

Mr. President, I simply ask--we have an order to go through. We will protect the rights of the Senator from Colorado to have it voted on and he is actually in the queue to come after Senator Pryor at this point. So I don't think the Senator from Colorado needs to ask for the yeas and nays right now.

Mr. President, how is the time being charged now?

Then I ask that the time I am on the floor and the time going forward be charged against the bill.

Mr. President, if I might have the floor, there are a number of folks who wish to speak to this bill and have amendments relative to the bill. I strongly urge them to wander over here in the next few hours and give their talks and talk about their amendments. It is possible that we will start the vote-arama tomorrow. Once we start, there is not going to be any discussion. There will be one vote after another, with a very brief time period in between equally divided. If people want a substantive discussion on their amendments, now is the time to come over and make their presentation.

Taking my own advice, I will mention an amendment I intend to offer which deals with the H-1B issue. H-1Bs are visas which go to people who can contribute immensely to our economy. We have an economy that depends on value added--smart people creating ideas which create jobs. A lot of those smart people come from overseas, and we should take advantage of them wanting to come to the United States. One of our great strengths as a nation is people want to come here, and we should take advantage of that strength and convert it to an economic engine.

The way to do that, of course, is to encourage people who want to come here and who are going to contribute to the economy by being job creators--rather than taking jobs, they will be actually job creators-- to come to the United States. So I will have an amendment to expand the H-1B program. This is critical to the high-technology industry especially.

I expect that this amendment will be strongly supported by those who wish to expand our economy, especially by advancing our leadership in the area of technology, and I know it will be strongly supported by everybody----

I am happy to yield to the Senator from Illinois for a question. There will be no dead people brought over to the United States.

Well, I know the Senator from Illinois doesn't like the H- 1B visa program, doesn't desire it to be expanded. I appreciate that and I understand we have a difference of opinion on that, and when he wants time, I will be happy to listen to his views again. But the fact is I happen to think, even though there may have been abuses in the program, I don't think they were at the core of the problem; that the primary energy of this program has been to create jobs in the United States by bringing smart people here.

We should be going across the world and saying to the best and the brightest----

I will in a second--and saying to the best and the brightest in the world, if you want to come to the United States and be a job center that adds to the value of our economy, we would like to have you come. We would like to consider you as being a participant under an H-1B visa program.

Yes.

Well, I would say to the Senator from Illinois that when you bring a person here who has the capacity to add to the strength of a Microsoft, for example, which is probably our single biggest international producer of economic activity for us as a nation, after maybe, I don't know, Wal-Mart, but it is a value-added company of the first level, and that when you bring somebody here who Microsoft feels adds to their ability to be more competitive, if that person decides to go back to India or back to China, well, that will be a choice they make.

But I suspect the odds are pretty good if that person has the opportunity to stay here under an H-1B visa program, they will probably end up staying here, or at least a large enough percentage of them will stay to add to our economy.

Now, what my amendment does----

I will in a second. What my amendment does, to make it clear, is it recaptures visas that are unused and it uses those visas now. It also specifically targets bringing in high-skilled nursing, people who are trained in the nursing facility area, which is very much in demand right now.

Certainly. Of course.

I happen to believe the H-1B program is one of those programs that expands jobs in the United States, and by getting people here, you actually create jobs and you will create more jobs for Americans rather than lose jobs.

So, no, I don't happen to think you create a uniform rule that says nobody can come here if somebody else can take the job because then you are going to get the bureaucracy behind that which would basically bar those people from ever getting here. That becomes then a bureaucratic nightmare for building those jobs. It makes much more sense to bring these smart, intelligent people here, have them create jobs here, rather than leave them creating jobs in China and India.

Bill Gates speaks to this far more eloquently than I do. He speaks to most things more eloquently than I can because he can pronounce the words. But as a practical matter, he says these people are centers for the energy that creates the ideas, that creates the jobs that drive the economy. And if you leave them in China, if you leave them in India, as those types of individuals creating jobs, they become huge competitors to the entrepreneurship of America. If you bring them here, they become adjuncts to our economy.

I think the proposal makes a lot of sense from the standpoint of job creation and from the standpoint of making our economy stronger, so I will be offering it later in the day.

I yield the floor.

I take it the Senator from North Dakota is suggesting we will continue this evening, but in debate only, unless the chairman and the ranking member of the committee agree to put an amendment in order.

I agree. I wished to make certain.

Mr. President, I understand that Senator Dodd is going to speak for 20 minutes. At the end of Senator Dodd's presentation, I ask unanimous consent that Senator Ensign be recognized.

If the Senator will yield.

I think you can file one, but it can't be called up.

Senator Grassley is here.

And that Senator Grassley be recognized at 8:05.

Madam President, I ask unanimous consent that after Senator Menendez speaks, Senator Enzi be recognized for 10 minutes, then Senator Casey for 15 minutes, and then if Senator Cardin seeks time, he be recognized for up to 10 minutes.

Madam President, I know Senator Corker is next. I ask unanimous consent that Senator Voinovich be recognized for up to 10 minutes at the conclusion of Senator Cardin's remarks and that Senator Barrasso be recognized at 8:45 for 15 minutes and that after Senator Voinovich, Senator Brown be recognized for 10 minutes.

So the order, as it presently stands, is: Senator Corker, Senator Menendez, Senator Enzi, Senator Casey, Senator Cardin, Senator Voinovich, Senator Brown, then Senator Grassley, who would like his time to be expanded to 20 minutes, and then Senator Barrasso at 8:45. Senator Grassley is recognized at 8:05.

Mr. President, the next speaker in order is in the chair. When somebody replaces him, I will yield the floor. I rise to say a couple of words about what I consider to be a very dangerous precedent that appears about to be reset through the House resolution on the budget. There is something called reconciliation, which is the true hammer in the budget resolution. It allows changes in things such as Medicare, Medicaid, entitlement programs, or tax policy to be passed under an expedited procedure here in the Senate with only 51 votes. It is at the essence of the Budget Act.

Its whole purpose, and the reason it was created, was in order to discipline the rate of growth of entitlement programs as its primary cause and to address tax policy.

Last year, there was a token reconciliation instruction given of $750 million. I say that because reconciliations passed always have been used to save considerable sums of money, or reduce the rate of growth of programs by considerable sums.

When I chaired this committee, we reconciled primarily Medicare, but other spending accounts, including agriculture, to the tune of almost $40 billion. In 1996, reconciliation was used for, I believe, $96 billion of savings and reductions in the rate of growth of programs. So this $750 million alleged savings put in the House vehicle last year was essentially a fig leaf to cover up not a use of reconciliation for the purpose it was originally designed, which is to control the rate of growth of spending, but to actually use it as a stalkinghorse to radically expand programmatic activity, with the protection of a 51- vote procedure that is basically not amendable.

What happened last year was that under that $750 million of savings, almost $19.2 billion of new spending occurred--new spending, new programs, expanded programs.

As a result of that, the Government grew by $19.2 billion in the long run. Yes, there were savings taken from other accounts, basically reducing the reimbursement to student lenders, but those savings pale compared to the outyear costs of what the programmatic activity that was added under reconciliation will be in last year's bill. Now we see this game being played again.

This is a cynical game, because reconciliation applies only to the Senate. The House doesn't need reconciliation protection. They have a House Rules Committee. No bill in the House can come to the floor without a rule, and the Rules Committee has the ability to enforce the will of the majority--without the filibuster.

In the Senate, of course, there is the filibuster. Reconciliation was designed for the sole purpose of addressing these very significant programmatic activities, and trying to control their rate of growth in a way that would not have the filibuster applied, because these programs were so significant and because making progress on controlling the rate of growth is always a challenge.

So reconciliation is a vehicle that only disciplines the Senate activity. It doesn't discipline House activity. What it does in the Senate is denies the minority rights, because it basically eliminates the filibuster, as things are put under reconciliation.

Why would the House of Representatives include reconciliation instructions? The Senate bill doesn't have any reconciliation instructions--none. Well, there is a game going on. As I said, it is cynical, and it is a game that undermines the basic purpose of the Budget Act. This is a direct attack on the rights of the Budget Act and the rights given under that act. When the House puts in that reconciliation instruction for a token amount of money--it is a lot of money, but under the terms of this budget, it is a fig leaf event--$750 million. What happens is when they go to conference, they will claim they have the right to pursue reconciliation instructions, which will not affect the House's ability to pass a bill, but it will affect the Senate's bill and how the Senate proceeds. We may see that reconciliation instruction--in fact, I almost guarantee we will see it in conference balloon into a massive programmatic expansion of some nature, and it could be two or three different programs, protected by reconciliation, and then passed in the Senate under a procedure of reconciliation; and while the savings may be a token amount that is put forward in the House bill, the expansion in the size of the Government will be extraordinary.

The whole purpose of the Budget Act, which is to discipline the rate of growth of the Federal Government and put some discipline into the process of budgeting, will have been made a farce by this procedure. It truly damages and destroys the Budget Act, in my humble opinion, for this process to go forward. It is also an incredibly cynical act.

If the Senate leadership wants to expand programs in the Senate with reconciliation protection, have the courage to bring the language to the floor of the Senate and let us vote on it during the budget process. Don't use this backdoor procedure of having the House Budget Committee do your dirty work, which is what is happening in this situation.

So this, regrettably, appears to be the game that is about to be played. I happen to think it violates the privilege of the budget resolution. I think when something like this happens, which is such a clear and obvious affront to the process of the budget and is so outside the scope of what was

originally considered as the purpose of reconciliation, that basically undermines the privilege of the budget resolution. Clearly, if it does not do it from a standpoint of a parliamentary situation, it does it from a standpoint of what is fair play around here and what is a proper procedure and the proper way to budget.

Mr. President, I yield the floor, and whoever is in order next I guess will be recognized.

Mr. President, I appreciate the fact that the Presiding Officer has the right to the floor as soon as someone comes over and helps him out. Pending him being relieved of his duties as the Presiding Officer, I ask unanimous consent that we yield to Senator Collins 10 minutes.

Mr. President, I ask unanimous consent that at the close of business tonight, all statutory time be yielded back, except for 30 minutes to be equally divided and controlled between the chair and the ranking member for their use when the Senate resumes consideration of the concurrent resolution on Thursday, March 13.

Mr. President, I rise to speak about the budget.

First, I express my respect for the people who have worked on this budget, my staff especially but also the Democratic staff, and the chairman of the Budget Committee, Senator Conrad.

We are, however, in an extraordinarily difficult time as a nation. We confront major issues. We confront international issues involving the threat of Islamic terrorism. We confront domestic issues of even more or equal significance--not equal significance; nothing is more significant than the threat of a terrorist attack with some sort of weapons of mass destruction, but we confront huge domestic issues such as the projected bankruptcy of the Nation. That is a pretty big issue, that is an undeniable fact that is going to occur unless we take some action because of the fact that the baby boom generation is beginning to retire, and the cost they will put on the Federal Government and, therefore, on our children who support them through taxes is going to be extraordinary. We also confront the extremely difficult issue of energy policy and the cost of gasoline. A barrel of gasoline went over $107. It is not projected to come down. The effect on the economy is devastating. We confront the fact that we have a Federal Government which is spending and continues to spend significantly more than it is taking in and, as a result, is spending the Social Security surplus and is significantly adding to the debt of the Nation.

One would hope that in light of these very large issues--the threat of terrorism, the issue of the retirement of the baby boom generation and the fiscal devastation that is going to bring to our children's ability to have an affordable lifestyle, the issue of the cost of energy, the issue of the size of the Federal Government and its growth at a pace which it cannot sustain, the tax on the American people, which gasoline now represents, which is undermining the economy, and the general tax policy of the proposed budget which will undermine it even further--that the Democratic leadership of Congress would have come forward with a budget that showed some imagination, some creativity, some initiative in the area of addressing some of these crucial problems.

Regrettably, what we got was the same old-same old--a budget filled with taxes; a budget filled with spending on this special interest program and that special interest program, a budget which underfunds the national defense, a budget which dramatically increases taxes on working Americans, a budget which dramatically increases the debt of the Federal Government and therefore the debt passed on to our children, a budget which raids the Social Security trust fund, a budget which has no creativity in the area of trying to address entitlement reform, a budget which uses gimmick after gimmick after gimmick and even gimmicks its own gimmicks in the area of pay-go, in the area of discipline, in the area of revenues. To say the least, it should be an embarrassment because it is such a mediocre presentation. It passes the problems on to the next generation. It doesn't confront them. It doesn't even try to confront them and simply aggravates those problems for the next generation.

That is unfortunate because we are running out of time here. We are the generation of leadership, the baby boom generation. We have some obligation to fix the problems we are going to pass on to our children. I believe we have a significant obligation to do that. But this budget doesn't accomplish anything in that area. This budget has one thought in mind. It is not jobs, jobs, jobs, as the majority leader said; it is reelect, reelect, reelect--win the next election rather than trying to solve the problems which we are passing on to the next generation.

The horizon of this budget is somewhere this July, this August, as we move into the full-scale election cycle, when they can go to this interest group and say, we have given you this money, and this interest group and say, we have given you this money, and then deny that they are taxing people because the taxes for those costs won't hit people until after the election and deny that they are fudging the numbers through using gimmicks because those events won't occur until after the election.

It is truly a budget that fails on all counts to take on what is the real issues facing our Nation--how we fight

terrorism, how we support our troops in the field, how we deal with this looming, massive, unfunded liability of the retirement of the baby boom generation which will put unsustainable costs on our children and make their lives essentially less viable in the way of affluence than ours has been, a budget that dramatically increases taxes on working Americans in the name of raising taxes on high-income Americans, a budget that dramatically grows the debt and raids Social Security funds.

This list, as shown here, is what it does. I think I pretty much outlined it. It raises taxes by $1.2 trillion. It dramatically increases spending. I will get into that a little bit. It dramatically grows the debt. It gimmicks its own enforcement mechanisms--pay-go and all the other enforcement mechanisms it allegedly has in place. Then it does nothing to address the $66 trillion unfunded liability, which is such a huge number nobody can understand it. So to try to put it in context, it means, I think, that every American today has a $120,000 debt. This budget adds $24,000 to that debt. This budget does nothing to try to improve that situation.

The chairman of the committee said:

We need to be tough on spending.

The number of spending cuts in the Democratic budget: zero. The number of spending increases: $22 billion over this baseline this year stated on the discretionary side. On the entitlement side: $466 billion--increases in spending. They allege it is $18 billion, but they play another one of their games, another one of their budget games. They take $4 billion in what is known as advanced appropriations--that means they take it out of next year and spend it this year--$4 billion additional doing that.

It has been done in the past. I have opposed it in the past. But this time they plus up the number a little bit so their numbers can work so they can say to their different constituencies: We are going to spend money on you. You can have this money. We got it for you. We are going to borrow it from next year's budget--$4 billion.

Mr. President, $22 billion in new spending. That is a pretty big number: $22 billion. That would literally run the State of New Hampshire for 3 or 4 years. But that is not the whole number because you have to put it in a 5-year context. It is actually over $200 billion of new discretionary spending because once you spend that $22 billion this year, it does not come out of the budget next year, it goes into what is known as the baseline. It becomes the floor, and we build on that.

Last year, they wanted to spend $22 billion more too, so over 2 years they have bumped things up--or tried to bump things up--$44 billion. Plus last year they put in a supplemental for another $21 billion. I know these numbers are starting to be thrown around like crazy here, but the simple fact here is, it is big money--big money--being spent on constituencies that vote for them.

The chairman of the Budget Committee said: I am prepared to get savings out of long-term entitlement programs. How many savings are there out of long-term entitlement programs in this budget? Zero net savings; zero. While the deficit in the long-term accounts goes up dramatically--$66 trillion is owed to those accounts we cannot pay for--this budget adds $466 billion into those accounts. It is a staggering amount of money. There is no attempt to adjust that at all.

Now, it is interesting, we will hear from our colleagues on the other side of the aisle--let me go to this one first, and then I will get into that. The national debt goes up over $2 trillion under this budget. Mr. President, $2 trillion is added to the national debt. My colleagues on the other side: ``I really believe increasing the debt is the threat.'' That is one of Senator Conrad's great phrases: The debt is the threat. I agree with him. The problem is, he is aggravating the threat with this budget. Now, he does not have too much choice because he is spending so much money we don't have that he is aggravating the debt.

And now, the famous wall of debt chart. It goes up, and goes up dramatically, under this budget. We will hear from the other side of the aisle: But the President's budget does the same thing, or it is even worse. That is a canard. That is a straw dog. The President does not sign the budget. The President is not part of the budget process other than he has an obligation to send a budget up here for the purposes of our review, which is, depending on the President, uniformly rejected by the party in power.

He sends up the budget. He announces what his priorities are. But, uniquely, the budget instrument--and this is an important point--is a child of the Congress. It is a child of the Congress. Congress produces the budget. The Senate produces a budget. The House produces a budget. It goes to conference committee. It comes back to the Senate and comes back to the House. But do you know what it does not do, as with most laws? It does not go to the President to be signed. He cannot veto a budget. He cannot sign a budget. He simply gets a budget in the form the Congress wants. It is a resolution. It is not a bill.

Why is that? Because the Founding Fathers, in their wisdom, and the people who put together the Budget Act--some of whom are still here, Senator Byrd and Senator Domenici being two of the key players in that in 1976, I think--knew the power of the purse, which is what the budget is all about, lies with the Congress. The Congress has the first and primary responsibility on the budget.

So when you throw out: Well, but the President did this and the President did that, you are trying to hide in the weeds. Congress has the responsibility for the budget. It is the Congress which passes the resolution that creates the budget, and the President does not sign it at all. So it is the Congress you should turn to and say: You are the responsible party here. Are you being responsible? That is the issue: Are you being responsible as a Congress? This Congress is not being responsible because the big issues we face as a nation are either being finessed, gamed, ignored, or aggravated under this budget.

As I said before, this budget adds $27,000--$27,000--to the debt that each child born today has to pay. So if you are having a child or you just had a child--I just had a niece this year. She is a wonderful little girl. She came into the world. She got a $27,000 bill from the Democratic leadership of this Congress--a pretty stiff bill to stick her with, a pretty stiff bill to stick any American with who is just getting started. It is not fair at all.

Let's get into some specifics about this budget.

First is the allegation that there is some sort of disciplining mechanisms around here. I take this on first because it is such a fraud that it has to be taken on first. I have heard more Senators on the other side of the aisle saying: We are going to use pay-go to discipline the budget, darn it. When we use pay-go, we limit spending around here.

``Pay-go'' is a motherhood term, regrettably. It is a title that has been put on supposedly a procedure which requires you to pay for new spending and to pay when you cut taxes. Well, time and time again, our colleagues on the other side of the aisle, when they were confronted with a choice of actually having to use pay-go--which would have caused them to have to cut spending somewhere in order to increase spending somewhere else--gamed the system. They moved a year here or a year there so they would not be subject to pay-go.

They cut programs from reasonable funding levels such as SCHIP by 85 percent in 1 year, so they would not be confronted--knowing it was never going to happen--so they would not be confronted with pay-go enforcement mechanisms. They took the MILC Program and put it in a supplemental bill so they could build it into the base and not be subject to pay-go.

Time after time after time--15 different times--they gamed pay-go to the tune of $143 billion. I call it ``Swiss cheese-go.'' I think that is a much more truth-in-labeling act. There is no reason we should ever call this thing pay-go again. Let's just call it ``Swiss cheese-go'' because that is what it is. Whenever it is inconvenient for the Democratic leadership to have to subject themselves to their own discipline rules, they waive them, game them, or ignore them.

The first obligation of a national government is national defense. The most important thing about national defense is to make sure your soldiers

who are in the field have the resources they need to do the job we have asked them to do. Whether you agree with what they are doing, you should never send a soldier into the field and not support that soldier with everything he or she needs.

I understand there is a huge debate, especially on the other side of the aisle, as to whether we should cut the legs out from underneath our troops in Iraq. We all understand that. We voted on it here 43 times in this Congress. But there should be no question that those soldiers need the support as long as they are in the field. It is totally inappropriate and a total abrogation of responsibility of the Congress not to support those soldiers in the field.

Now, in this exercise, the White House does not come with clean hands. I was fairly aggressive in complaining about their decision to send up a request for only $70 billion--which is a lot of money, but that is nowhere near what it is going to cost to keep our soldiers in the field over the next year. To their credit, at least, the people at the Pentagon--Secretary Gates, when confronted with that number, said: No, that is wrong. Even though OMB may have sent it up here in the President's presentation, it is wrong. We are going to need something like $150 billion to $170 billion, somewhere between $80 billion and $100 billion more than they have in the budget.

The chairman of the Budget Committee agreed. He said:

And we know, I think with great certainty, $70 billion is

not the right answer for 2009, zero is not the right answer

for 2010.

Those are the two numbers the White House had. And Secretary Gates said: No, it is not the right answer, when he was asked. He said: It has to be a higher number.

So the documentation is pretty clear, even if the White House did not send up the right number, by the time we acted--and remember, once again, it is the Congress that does the budget, not the White House--by the time we acted, we should have put a number in here that adequately reflects what our soldiers are going to need to remain safe.

Now, even if you oppose this war vehemently, as some do on the other side of the aisle--to the point where they are willing to take soldiers out next week, which you cannot physically do; we all know it will take 6 months to a year to get the soldiers out of there--with this number, you cannot get the soldiers back with $70 billion, literally. This number does not allow you to get the soldiers back.

What happens with this number is you are going to have our soldiers in the field without ammunition, without resupply, without the facilities they need, and without the equipment they need. This number assumes we are going to leave our soldiers in the field unprotected-- unprotected. It is an inexcusable, irresponsible number to put in the budget simply to make your budget look better. This number should have been at least $70 billion to $100 billion higher to have an accurate budget.

Then the budget moves on. We have heard more about how there are uncollected taxes, and if we collect the uncollected taxes, we will solve all our problems. I call it the ``Wizard of Oz'' approach to budgeting. There is somebody behind a curtain somewhere who owes us a lot of money. We are going to find that person. We are going to get the money. That is going to take care of everything. We will all be happy.

Last year, they suggested we do this to the tune of $300 billion. Last year, they were given the benefit of the doubt. They had never done a budget before, so you have to give them some benefit of the doubt. OK. Let's see how much they got. The chairman of the committee again:

If we just collect 15 percent of the [tax gap]--

That is what is referred to--

that would be over $300 billion. That alone would come close

to meeting the revenues needed under our budget resolution.

That was last year. Do you remember how much they collected last year from the tax gap? Zero. In fact, they cut in their budget the collection capabilities of the IRS. Not only was the IRS not able to go out and collect more money that was owed, they were having trouble collecting what they did get which was owed because their collection process has been cut.

So you would think after such a pathetic performance they would presume not to do this again. It would take incredible--I don't know-- verve to claim one more time that you are going to generate these types of revenues. But they do. They do: $300 billion. They are going to get it from out there in the virtual land of tax policy. What they got was zero--zero.

This budget at its essence is a massive tax increase. That is essentially what it is. It is a massive tax increase, the purpose of which is to expand the size of the Federal Government--grow the Federal Government--and, in my humble opinion, as a result, make it much more difficult for us as a government to produce a positive and strong economy and to give people an opportunity to live lives that are as affluent and, hopefully, as successful as prior generations.

The amount of tax increase in the bill is $1.2 trillion--the largest tax increase in history: $1.2 trillion. Under the assumptions of this budget, every tax goes up to rates which were fairly high and which the Congress agreed were too high back in the early 2000s. The marriage penalty goes up. The child tax credit goes up. Rates go up. Capital gains go up. Dividends go up. The estate tax goes up. They are all assumed to go up. AMT is assumed to be continued for every year but this year.

We have a new chart called the ``Wall of Taxes'' because that is what this budget does. It generates a wall of tax increases, climbing every year as a percentage of GDP. It is important to know it has historically been the case that we have presumed the Federal Government would take something akin to 18.2 percent of Gross National Product in tax revenues. That has been the case since the end of World War II. This budget blows through that number. But equally important, it should be noted that in blowing through that number and adding $1.2 trillion in new taxes, it doesn't address the outyear issues which are going to cause taxes to go up even higher. The failure to do anything on entitlement reform and then use up all the revenues to fund this group and that group that you happen to be happy about giving money to for the next election puts you in an even worse position when, hopefully, the Congress gets around someday to addressing the biggest fiscal policy issue, which is entitlement reform.

In addition, it needs to be noted this tax increase of $1.2 trillion is the beginning. It is the beginning of the Democratic proposals. Because if we listen to their two national candidates for President, in the case of one, they have already offered and put in place over $300 billion--$300 billion of new programs in 1 year. That adds up to something like $1.2 trillion of additional programs over 5 years. That is on top of this number.

Now, when Senator Obama makes that representation: I am going to add $300 billion of new programs every year, the practical effect is he has to pay for it somehow. His claim is he is going to pay for it by taxing the rich. He is going to tax the rich and pay for his--he actually, ironically, has the same number here: $1.2 trillion of additional spending over that 5-year period. Well, if you tax the rich, which would mean you raise the top bracket from 35 percent to 39.6 percent, which was the bracket under President Clinton, you generate how much income to the Federal Government? Twenty-five billion dollars. Multiply that by 5 years, which is what this number is--the $1.2 trillion Senator Obama has suggested we spend in new programs--and you have $225 billion. So he is about $1 trillion short in order to pay for what he is suggesting in new programs.

But there is another irony. This tax number already assumes that $225 billion. This tax number assumes the rates have been increased to 39.6 percent for the top income brackets, with the practical effect of that being it has already been spent. This budget already spends the money and the tax revenues candidate Senator Obama has suggested he is going to spend on his new programs. So he doesn't have any money available to him.

So now we have a Democratic budget which increases taxes by $1.2 trillion, increases spending dramatically, as I have gone through already, and then you have layered on top of that a national candidate--two national candidates, because Senator Clinton is

not far behind Senator Obama in suggesting new programs--who is going to add another $1.2 trillion on top. The numbers become staggering. But what does it all translate into? Huge tax increases on working Americans--huge, absolutely staggering.

To try to put this in context, without the Obama tax increases or the Clinton tax increases, 27 million small businesses in this country, under the Democratic budget, will see their taxes go up $4,100 each per year. Now, you can double that if Senator Obama were to put in all his programs. Eighteen million seniors will see their taxes jump $2,200 each because of this budget--$2,200 each. That is a lot of money.

Let's try to put that in context. That basically buys groceries for most Americans for, I think it is half a year. It certainly buys a fair amount of gas, although not as much as we would like because the price of gas is so outrageous. It certainly helps with a mortgage payment or maybe a child going to school or helping a grandchild go to school in the case of a senior. But serious money: $2,200. That is what this budget in new taxes is going to cost average seniors in this country.

Something else should be pointed out. This budget assumes the capital gains and dividend rates are going to go up, and the primary benefit of capital gains and dividend rates flows through senior citizens. As a percentage, seniors take more advantage of dividend rates and more advantage of capital gains than any other demographic group. So it is directly targeted on the tax increase.

All of this works out to--for the average American family, there is a $2,300 tax increase in this bill, and that doesn't include how much it would be increased if you were to put the Obama or Clinton programmatic initiatives on top of that. It would almost double this number. The appetite to raise taxes on the other side of the aisle is unquenchable. It is huge. Let's put it that way. It is unstoppable, it appears. When this budget passes, John Q. Public is going to have to write Uncle Sam a check for $2,300. That is a pretty expensive experience for the American people.

What do they get for it? What do they get for it? Let's come back to what they get for it. Not a lot. Do they get the troops properly supported when they are fighting for us overseas? No. No, they are $100 billion short on that. Do they get entitlement reform that helps us down the road with the pressure that is going to be put on our children by the cost of the expansion of the entitlement programs due to the retirement of the baby boom generation? No. No, they don't get that. Do they get health care reform? No. There is no health care reform in here. Do they get tax reform? No. There is no tax reform in here. Do they get programmatic initiatives which make sense and which are presented in a coherent and orderly manner? Are there programs eliminated that have maybe been around too long in exchange for adding programs? We have study after study that tells us about programs we can eliminate. No, not one program is eliminated in this budget--just an expansion. Just add to the base; bump it up another $200 billion over the next 5 years and pass that bill on to our children.

Passing the problem on, that is what this budget is. Courageous? Creative? Imaginative? Addressing the core issues which we confront as a nation and which do threaten us, whether it is terrorism, the cost of energy, the cost of the Government, the retirement of the baby boom generation? These issues are not going away, but you wouldn't know they even existed if you looked at this budget. It is a regrettable missed opportunity in a very difficult time. It is unfortunate that all it has become is your classic liberal tax-and-spend initiative.

I yield the floor.

Mr. President, this amendment is a game. Last year, we saw the same game. Last year, the Democratic Congress was in its first year of having the majority in both the House and the Senate, so people gave it the benefit of the doubt. They said: OK, you claim you are going to do something, we certainly hope you will.

So last year they once again set up a false surplus and then they cut taxes and then they brought forward the Baucus amendment to pick up all that surplus as part of the tax cut, claiming both a surplus and a tax cut, which was good talking but a little inconsistent.

Their tax cut last year, the Baucus amendment had in it the extension of the 10-percent bracket, the extension of the $1,000-per-child tax credit, and the extension of the marriage penalty. I believe it had some estate tax language in it. It might have. But I know it didn't have this property tax itemizer in it. It had those four items in it for sure. So all the Members voted for it and took credit: Oh, we are for these tax extenders because we think they help middle Americans, which they do, obviously, which is why President Bush proposed them originally, and that is why it passed under a Republican Congress.

So what happened after this amendment was voted for and everybody sent out their press releases from the other side of the aisle saying: My goodness, we are for these tax cuts, we are going to vote for them right here on the floor of the Senate--even though they could have put them in the original Senate bill, which they didn't do because they wanted to have a bill reported out of committee with a big surplus so they could talk about that, knowing when they got to the floor they were going to eliminate these surpluses for the tax cuts--what happened after they put out all their press releases? Where are these tax-cut extenders they claimed they were going to pass last year? They don't exist. They never marked them up. They never voted on them. The real action of extending these tax cuts never occurred, even though they took credit for them last year.

They said: My goodness, that is a great idea, we get a press release out saying we are for cutting taxes; let's do it again. They did not cut the taxes because the taxes are still there, so they say let's do it again. So we see the same cynical action brought forward in this amendment. They are offering this amendment to cut the same taxes they cut last year--at least they took credit for cutting last year but they actually didn't cut.

It is to say the least a game--a game. That is why I call this the ``fudge it'' budget because so much of it is built around this gamesmanship in language and setting up false hopes and then proceeding with the press releases and then proceeding with not following through on what they claim they were going to do.

It also should be noted that left out of the Baucus amendment are a lot of fairly important issues of tax policy. For example, the present rate on capital gains and dividends is not in the Baucus amendment. So they are presuming it will go back up. That is a pretty stiff hit for a lot of Americans, especially senior citizens. Ironically, senior citizens benefit uniquely from capital gains rates being at their present level. Senior citizens benefit uniquely from dividend rates being at their present level because much of a senior citizen's retired individual income is capital gains income or dividend income to the extent they have some income beyond their basic pension, and many of their pensions are, of course, based off capital gains and dividends. So they are going to raise those rates. They are going to double the capital gains rate, essentially. The dividend rate will not only double, it goes up by 2\1/2\ times for some Americans under their proposal.

The deduction for qualified education expenses is not extended. Small business expensing--that is a pretty important item, especially in an economic slowdown that should be extended--is not extended in this bill.

Other extenders that are left out of the Baucus amendment include the research and development tax credit, that is pretty important; the energy tax credit, that is pretty important; State and local tax deduction, some people think that is important. AMT relief is left out.

The practical effect is even though they make this representation they are going to reduce taxes, the exact same representation they made last year on these ``motherhood'' tax extenders, let's call them, which they never followed through on last year, they leave on the table massive increases in taxes--massive increases in taxes--which will fall on working Americans.

We hear all this gobbledygook from the other side of the aisle that they are just going to tax the rich, we are taxing the rich, we are taxing the rich. I bet I heard their Presidential candidate, Senator Obama, use that term to justify his spending policies probably 15 times in the last debate I listened to in which he participated. We are just going to tax the rich, the wealthy Americans. Well, fine, OK. The only problem is they cannot raise enough money to pay for their budget by just taxing the rich. If you take the basic rates and you move them back to the Clinton days, when we had high tax rates in this country, you take the top rate on the high-income individual, 35 percent, and you raise it back to 39.6 percent, what do you generate in income in an annual year? About $25 billion.

What do they plan to spend? Senator Obama plans to spend $300 billion under his plan. In order to reach the numbers they want to spend in this bill, there is a lot of spending in this bill. There is $200-plus billion in discretionary spending increases.

There are $400-plus billion entitlement increases in this budget. There are big holes that we know are going to have to be filled, or at least we hope they will be filled, because otherwise you are going to end up with our troops stuck overseas without being able to get home, because their budget does not fund the cost of bringing them home, much less supporting them while they are in the field.

We know these expenditures are going to occur, and those expenditures have to be paid for, and the way they are paying for them is by increasing taxes, not on the wealthy--they do on the wealthy too, but on every American. The average American's taxes will go up about $2,400 under this bill. Senior citizens' taxes will go up about $2,100; small business taxes will go up about $4,700; $2,400 for an individual family with $50,000 of income. That is what their tax increase goes to: for seniors, about $2,100; for small businesses, about $4,700.

That is a lot of money. You can buy a lot of groceries and at least get some relief from the cost of energy if you get to keep that money rather than have it taxed away as is proposed in this bill. It should not come as a surprise to people that they are doing this in their budget, because that is what they do well; they like to spend money and they love to raise taxes.

Then they claim, well, we are going to tax the rich. It turns out they are not only taxing the rich, they are taxing senior citizens, working Americans, small business Americans, Americans who get their income from small businesses, they are taxing R&D, they are taxing energy, the production of energy.

In addition, there is a little game being played here on their own rules. We hear the sanctimonious discussion about how they are going to use pay-go to discipline the budget. They are going to use pay-go to make sure we stay within our spending priorities, and that we do not raise taxes without offsetting these taxes.

Well, this amendment is set up to game pay-go. Pay-go is not going to apply when this amendment is passed or, if it does apply, it is going to be structured in a way that it can be waived. There is no expectation that there will be any pay-go applied to the Baucus amendment, should it ever actually be brought to the floor.

It is a game. It is, of course, one of the reasons why I think the American people get a little cynical about their Government. Here is the second year in a row that we are going to have press releases flying out of the Democratic Senatorial Committee claiming that they voted for these tax cuts. And then what happens? The tax cut never gets passed. This is a nice charade; that is

all it is. We wish they were sincere when it came to cutting taxes.

I yield the floor.

First, let me thank the Senator from North Dakota for his kind comments relative to our efforts to make sure that the unfortunate situation with one of our members did not inappropriately impact the majority position on the committee. We were happy to do that as a courtesy, because it is part of the proper comity of the Senate, quite honestly.

To move on to the substance of his comments, his actual praise of me was not inconsistent; I thought it was brilliant. But there is such inconsistency in the substance of what he said that I am amazed. I mean, first, the argument is made: Well, the reason the Baucus amendment did not have to be actually executed is because we did not need the money or we did not need to extend those tax cuts because they do not lapse until 2011 or 2012.

Well, why did you offer the amendment then? To put out the press release? It appears that is the only purpose of the amendment. Why are you offering the amendment this year? To put out the press release again? It appears that is the only purpose of the amendment.

What he is basically saying, if you read between the lines, is last year we did not execute on that, we did an amendment here, we got a press release--in fact, I have the press release here from last year: March 10, 2007. Baucus budget amendment funds children's health, tax relief for America's working families. That is the title of the release that was put out last year when this amendment was offered.

Of course, it never happened because the tax relief never occurred because the amendment was never passed.

This year, I guess we will get another press release from Members on their side saying: Senator so-and-so voted for tax relief for American families and for health care for American families by voting for the Baucus amendment which will not ever be executed on. It is a touch inconsistent, to be kind, to first claim that you didn't need to do the extensions until the year 2010 or 2011 or 2012, and therefore, last year, when you passed the amendment, it didn't mean anything, and then to bring the amendment forward again and take credit for cutting taxes. At what point does the American public simply shake their heads and walk away?

I will finish my statement, and then I will yield.

The second point the Senator makes is that there are no tax increases in this budget. That is true if you look at this year. But this is a 5-year budget. It assumes revenues over 5 years and takes credit for those revenues which exceed the President's number and which reflect an increase in taxes of about $400 billion. That is their number. I actually believe it is higher.

Giving them the benefit of the doubt, they have a $400 billion tax increase built into their budget. That tax increase is built in on the assumption made by OMB that the capital gains rate will go back up, that the dividend rate will go back up, that the basic rates will go back up, that other expiring tax provisions will go back up, R&D, energy, qualified education spending, that those tax extenders will go back up. So you won't see a dramatic increase in taxes as a result of this budget because they turn around and spend the money. It is not that they not only increase the taxes and presume those tax revenues will come in, they spend the money.

Then the argument is made: But we don't really have to do it by allowing those provisions to expire. We can raise it all from this infamous tax gap, which last year they also took credit for for $300 billion, or claimed they would, if they were successful. Then they ended up cutting the IRS accounts. So the IRS not only did not collect this additional money, they didn't even have the resources to collect what they were supposed to collect the first time around.

So the tax gap is mythical. It is virtual. It may exist. It does exist. But the collecting of it has been proven to be a lot more difficult than just putting it in a budget and claiming you will get it. In fact, the IRS Commissioner, when he testified before our committee, made it very clear that he felt the maximum amount, even with all the resources he asked for, which he never got, that we would be able to collect out of the tax gap was somewhere between $20 and $30 billion. That is over 5 years, as I recall.

So if the Senator's position is that we don't need to raise dividend taxes to get the $400 billion, we don't need to raise taxes on capital gains to get the $400 billion, we don't need to raise taxes on the estate and death tax to get the $400 billion, we don't need to raise the brackets back up in order to get the $400 billion, I know that in order to stand behind that position, he is going to want to vote for the amendment which Senator Cornyn or I will offer which will do exactly that. It will say: Don't raise the dividend rate. Don't raise the capital gains rate. Don't raise the brackets. Because the Senator from North Dakota said we don't need to do that, he will want to be with us on that.

I am happy to yield to the Senator for a question.

My question is, You will be with us on that amendment, won't you?

They didn't expire within the budget window.

Reclaiming my time, the point is, there is a 5-year budget window. They start to expire in 2010, not in 2007; therefore, your budget has to deal with that expiration. My budget didn't have to deal with that expiration because it was not within the 5-year window.

I would certainly hope I did, but I don't recall.

I would certainly like to have. But unfortunately, at the time, again, we were not within the budget window. But you are within the budget window, and you are taking credit for those tax extenders lapsing. Are you not taking credit for $400 billion under the baseline? That number is reached by CBO by presuming that the tax extenders on cap gains, dividends, and rates will expire? Are you not taking credit for that in your budget resolution?

Mr. President, reclaiming my time, there is a pretty significant difference. We are talking about 3 years, which is massive amounts of revenue. Secondly, you spend the money. The difference is pretty significant. We are talking about this budget at this time, and you can try to go back to other budgets, which I am happy to do. We can obviously debate old budgets. But the budget that is on the floor right now--and it appears the Senator is agreeing with my assessment--has a $400 billion tax increase, which tax increase CBO assumes will be accomplished by not extending the rates on dividends, capital gains, and the basic rates, along with research credit, energy credit, the qualified educational expenses, and the small business expensing. That is where you generate your revenue from. That is a tax increase. That translates into $2,400 per family. That is your budget. You are in charge of the budget. You brought the budget forward. You have a $2,400-per-family increase in here.

Mr. President, CBO scores zero in this budget for money coming from the tax gap that is represented by Senator Conrad as existing. The point being, of course, that you can talk about the tax gap all you want; it would be nice if we could generate some money from the tax gap. But IRS gives us no credit for generating money. They claim you can't generate the type of dollars the Senator has been talking about, and CBO doesn't give us any score for tax gap unless we significantly increase IRS funding, which we do not do.

Just a second. Furthermore, what you have to recognize is CBO does score the $400 billion, which the Senator refers to as revenue, I refer to it as a tax increase--I mean, it is a tax increase--and CBO gets that $400 billion number because they assume the tax rates on capital gains, dividends and the personal rates, along with the other items I have listed, will go back up when they expire. That is how the number comes about. It doesn't come about from the tax gap.

You can say: I am going to get money from Liechtenstein as a way to cover the American tax gap, and therefore no Americans are ever going to have to pay any more in taxes. You can make that statement, but that is not the way the budget works. CBO tells us how they are going to score it. We all work off of the CBO baseline. The CBO baseline assumes, under the Democratic budget, that taxes will go up above what the President asked for. That is clearly because they want to repeal the tax rates that are in place today and were put in place by President Bush. I don't know why they resist so aggressively admitting to this. Their Presidential candidates, that is all they talk about. So clearly, that is the game plan. Why try to obfuscate it with this tax gap debate?

In addition, we have this issue of what happened under our budget versus what happened under their budget. This is their budget. It is not our budget. They are responsible for this budget. The U.S. Congress has to pass a budget. The President doesn't sign it. Congress passes it. This is what they have brought forward. Their budget assumes, takes, and spends--and that is the important part--a tax increase which results from basically raising the tax rates on capital gains, raising tax rates on dividends significantly, which will dramatically impact all Americans, raising rates, raising a variety of other taxes such as R&D and energy. That is where they get the revenue which they then turn around and spend. We didn't do that in our budget. We accepted a higher deficit and didn't raise the tax rates. So there was a difference. It is substantive between the two. The core of it goes to the fact that they need revenue to spend, and to get that revenue, they are going to aggressively raise taxes $2,400 on working Americans.

The tax gap is a smokescreen for what is really going on. I don't even know why they put it up because there is no contention out there in the public arena about what the game plan is.

Senator Clinton and Senator Obama have said over and over and over again they intend to raise taxes. They claim it is just going to be on the wealthy, but they cannot get where they want to go by just raising taxes on the wealthy because, as I pointed out before, if you raise the marginal rates on the highest earners from 35 percent to 39.6 percent, you do not generate anywhere near the amount of money you would have to generate to cover all the spending that is proposed in this budget and has been proposed for new programs by Senator Obama and Senator Clinton, as they have been campaigning.

It will be, and this budget is, a general increase on the taxes of working Americans--to the tune of $2,400 for most families in the $50,000 range, to the tune of $2,100 for 18 million seniors, and to the tune of $4,700 for 24 million small businesses. There are no two ways around it. That is what is going to happen if this budget is extended throughout the 5-year experience it is planning to budget for.

Mr. President, we will go to the Senator from Texas.

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

I apologize for interrupting the Senator.

Mr. President, I ask unanimous consent that we proceed to the time on the resolution so the time during the debate will run against the resolution.

Mr. President, I thank the Senator from Texas for his courtesy.

And the time would be equally divided.

Mr. President, I appreciate the chairman outlining for the body the initiative which he and I have pursued in the area of entitlement reform. I appreciate his leadership on that and I look forward to continuing to work with him on it. I certainly hope we can pass it. It is one way to get at the fundamental fiscal imbalance our country is facing and the threat it represents to our children having an affordable government. But that should not mute or sideline legitimate efforts to try to begin the process of controlling entitlement costs in a way that is fair and does not unfairly impact beneficiaries.

The President did make suggestions in this area. The President's budget is not on the floor. I would note that the reason we don't offer a budget is for the same reasons the Senator from North Dakota didn't offer a budget when I was the chairman and the Republicans controlled the Senate. In fact, I will quote him. He said:

The chairman--

At that time he was referring to myself--

well knows the majority has the opportunity to offer a

budget, and our responsibility is to critique the budget.

That is the way the Senator from North Dakota viewed the budget process and it is the way I view this budget process. But independent of that, the President's budget, as he sent it up, at least had guidelines which I thought were very constructive in the area of trying to control our costs in Medicare specifically. He had three different proposals. The first suggested that people with high incomes should pay a larger burden of the cost of their drug benefit, Part D premium. Today, if you are Warren Buffett--we use Warren Buffett because he is nationally known, obviously, and is extraordinarily successful--if you are Warren Buffett, you qualify for the Part D drug program, but you don't have to pay the full cost of that program. You don't pay a full premium. You pay about 25 percent of the cost of that premium. That means that John and Mary Jones, working at a restaurant in Epping, NH, or Sally and Fred Upton, working in a real estate firm in Concord, NH, are paying 75 percent of the cost of the drug benefit which goes to wealthy Americans, and specifically the example I used would be Warren Buffett. That seems totally inappropriate to me.

So the President sent up a proposal which said if you make more than $80,000 as an individual--which is a good deal of income for an individual, a single individual, especially a retired individual--or if you make more than $160,000 jointly, you and your spouse, if you are retired and you qualify for the drug benefit, then you have to pay more. You don't have to pay the full cost even, you just have to pay more. It was a reasonable proposal and it would help with the imbalance of the Medicare accounts.

He also suggested we should improve our use of technology within the health care industry, making more information more available to more people so they can make better decisions. That scores, interestingly enough, as a savings, not surprisingly, because if more people have more information about, first, the cost of a medical procedure and, second, the outcomes of a medical procedure at A hospital versus B hospital or at an A group of family practitioners versus a B group of family practitioners, they can make a thoughtful, intelligent decision as to which group they use, especially if they are a corporation with a fair number of people they are insuring or self-insuring. So that proposal was a step in the right direction toward cost containment and scored in a very positive way.

The President sent up ideas--ideas that made sense--and they didn't impact ordinary beneficiaries. The only beneficiaries who were impacted under the President's proposals were high-income beneficiaries who would be asked to pay a fair share of the cost. I do think that type of reform should have been carried in this bill, and we will offer an amendment--I will offer it or Senator Ensign, I suspect, will offer it because he offered it last year, Senator Ensign from Nevada--asking that high-income individuals pay a fair share of

their drug benefit costs, and that is only right. Hopefully that will be approved and put into this budget.

So there are initiatives that can occur here which I think should occur and we should not simply leave this massive fiscal imbalance which we are facing in these entitlement accounts to be fixed by this task force which hopefully we will get in place, but we should start the process now. This budget unfortunately punts that issue and has zero--zero--savings in the area of Medicare--net savings in the area of Medicare. In fact, it ends up with an expansion in entitlement costs of about $466 billion.

Mr. President, at this point I yield the floor.

Mr. President, I appreciate that explanation on Warren Buffett because I think it confirms my prior representation, which is that this proposal increases capital gains and dividends. It is assumed by CBO that it does that. Language he has used relative to the view of the Senator from North Dakota would imply the same also. I think it is important to know--not important, but I think the record ought to show the charts that reflected the savings that were reflected in the President's proposals on Medicaid and Medicare were not reflective of the proposal that came up on Medicare in this budget. They were a prior proposal.

Second, I think the proposals that came from the President involve the Part D premium, IT, malpractice reform, all of which were reasonable, all of which could be accomplished, in my opinion, without having any significant impact on beneficiaries. Yes, they would impact providers because, as a practical matter, the IT improvements would put more pressure on providers to basically deliver good-quality services. Essentially what the administration proposed was to take savings that occur from significant improvements in IT and those savings which basically end up in the pockets of the providers and say to the providers that we will split the difference; you get half and we get half, but you are still going to get half of the savings you create out of IT. I don't think it affects the actual providers. It affects how much they save.

At this point, I see the Senator, the ranking member of the Finance Committee, the former chairman, so I will yield the floor.

In order to accomplish the goals the Senator wishes to accomplish and which have been subscribed to by the chairman of the committee, you wouldn't need reconciliation to accomplish that, would you?

That was my point. I think the Senator from Iowa has made an excellent case for why this reconciliation, I think he called it a stealth vehicle floating around here, should not be used. It is inappropriate and certainly undermines the integrity of the process to use reconciliation for this type of an issue.

Could we amend the unanimous consent to say that after Senator Stabenow speaks for 15 minutes we go to Senator Graham for 10 minutes and then to Senator Bunning for 10 minutes and the time that was supposed to start at 5:15 be moved to 5:20?

For 10 minutes, and then Senator Bunning for 10 minutes.

Then we will amend the agreement so the Humphrey Hawkins time will start at----

Mr. President, first, I would like to join with fellow Members of the Senate who have risen today to congratulate Senator McCain. He is a force for right in this country. He is a person whose personal history is extraordinary. As somebody said: What you see is what you get. And what you get is an extraordinary American hero who understands we need to defend ourselves around the world and we need to be fiscally responsible in the United States.

New Hampshire sort of brought him back in this campaign, and so we played a small role in that, although I was not necessarily a part of that role. But, in any event, I now join with my colleagues and look forward to supporting him aggressively as he goes forward in this campaign.

I think the Senator from Texas raised some excellent questions. The question is, what happened with the Democratic budget last year, as I understand it. Essentially, what happened was they produced a budget which they claimed was going to do one thing, and it ended up doing the exact opposite.

They claimed, for example, they were going to basically produce a budget which would produce a surplus. In fact, they produced a budget which produced a huge tax increase--a $900 billion tax increase. To try to put that in context, that means every American--or 47 million Americans who pay income taxes--will have their taxes go up $2,700 as a result of the Democratic budget. It means 18 million seniors will have their taxes go up $2,400 as a result of the Democratic budget. It means small businesses across this country--24 million small businesses--will have their taxes go up $4,700 because of this almost genetic factor within the Democratic Party which says they have to raise taxes and they have to spend your money.

So their budget was a huge tax increase, I would say to the Senator from Texas, through the Chair.

Mr. President, to respond the Senator from Texas, what happened was the Democratic leadership last year produced a budget which raised taxes by $900 billion on the American people. They said: Oh, but out of the generosity of our heart, we are going to offer an amendment which cuts back that tax increase by about $154 billion, I think it was--the Baucus amendment--because we are going to extend the child care tax credit, the 10-percent individual rates, the marriage penalty. We are going to do all these wonderful things, even though we are raising taxes, even after that, by $750 billion.

But lo and behold, once again, we saw their actions be a lot different than their words. Even though they passed that amendment, took credit for that amendment, they never actually extended any of those tax cuts. So those tax rates are still in place on the American people, and that was a total fraud that was exercised last year by the Baucus amendment because nothing came of it.

Well, Mr. President, I regret to inform the Senator from Texas, not surprisingly, he was not. In fact, they dramatically increased spending in last year's budget in the discretionary spending. They increased it well over what the President asked for--$250 billion of additional spending over what the President asked for over 5 years in their budget. Then, on top of that--that was not enough for them-- they stuck $21 billion into the supplemental, which translates into another $200 billion of spending increases. So they had a total of approximately $450 billion of new spending--almost $500 billion of new spending--over 5 years in their budget last year.

So they did not discipline the budget spending at all. So when Senator Conrad said on ``60 Minutes,'' ``We need to be tough on spending,'' they were not able to live up to that.

Well, Mr. President, again, regrettably, for the American people at least, the Democratic leadership said one thing last year on the budget and did the exact opposite. Not only did they not control any entitlement spending, entitlement spending expanded by $466 billion over their budget. This is similar to their claim they were going to not be raising taxes, when they raised taxes over $750 billion; similar to their claim they were going to be tough on spending, when they actually increased spending on the discretionary side by over $450 billion. This entitlement spending is another example of saying one thing and doing the opposite.

Yes, they definitely ``used'' it. In my view, the Democrats manipulated the reconciliation process to increase gross spending by $21 billion, while saving a paltry net $750 million over 6 years.

Actually, none. The Democratic Congress last year passed up an opportunity to close the tax gap, failing to fund IRS enforcement efforts, and passed bills that would actually expand the tax gap.

No, again, no action. The fiscal year 2008 budget allows the gross debt to grow dramatically, by $2.5 trillion over 5 years, and spends all of the Social Security surplus, which is more than $1 trillion.

It is important to remember that this debt will be paid back by our children, so that a $2.5 trillion increase basically adds another $34,000 to the amount already owed by every American child under the age of 18.

No, it is not true. Democrats have waived, gimmicked or ignored their own pay-go rules to the tune of $143 billion in deficit spending.

It started out that way, but took a left turn. Democrats in the Senate ended up with a watered-down version of pay-go: no first- year deficit-neutrality test; no deficit-neutrality test for the second 5 years--all about spending now, paying much later.

They did congratulate themselves. They even boasted about the ``pay-go surplus'' on the pay-go scorecard.

But they shouldn't congratulate themselves for hard choices--they should congratulate themselves for thinking up gimmicks and machinations to fool people into believing they made hard choices.

Can you believe that? They included a 1-month extension of the mandatory MILC program in the 2007 emergency supplemental. Then the chairmen of the Senate and House Budget Committees told CBO to put the spending into the baseline--which covers 10 years of the program--to the tune of $2.4 billion.

The topper: They included an enforcement mechanism in their budget resolution that prohibited this practice, but they exempted the 2007 supplemental.

In the SCHIP bill, the Democrats reduced funding from $14 billion per year to $3.5 billion in the last year, 2012. The gimmick hides $45 billion in spending.

The farm bill in the Senate also used this early sunset tactic to hide $18 billion in costs.

You bet. The student loan reconciliation bill phased down interest rates to 3.4 percent in 2011, then snap them back up again to 6.8 percent in 2012. This kept $17 billion in costs hidden.

The student loan bill turned off mandatory Pell Grant spending in 1 of the 10 years--hiding $9 billion in spending.

Mr. President, $10 billion in farm bill spending is pushed out beyond 2017--totally escaping pay-go enforcement.

I haven't even mentioned all of the corporate estimated tax shifts they have used, which move revenues from one fiscal year into another. Even Budget Chairman Conrad himself called this ``funny-money financing'' during debate on the last highway bill.

Mr. President, $143 billion--quite a chunk of change.

We can try and reinstitute a first-year deficit test, and we can try and reinstitute a second 5 years deficit test. We can adopt a scoring rule that prohibits shifts such as the corporate estimated tax shift from being used to satisfy pay-go.

But I am not confident they will accept such changes. They seem determined to keep up what the Wall Street Journal called ``a con game from the very start.''

Yes, in last year's budget, the Democrats failed to protect Social Security for seniors. Democrats, in their fiscal year 2008 budget, threw out both the bipartisan Social Security ``circuit breaker'' and the bipartisan ``save Social Security first'' budget point of order contained in the Senate-passed version, thus removing crucial tools to eliminate the practice of spending the Social Security surplus on other programs. Under the Democrats' fiscal year 2008 budget, every dollar of the Social Security surplus, or $1 trillion, was spent.

They failed to protect workers against tax increases. Democrats, in their fiscal year 2008 budget conference report, threw out a bipartisan budget point of order against raising income tax rates that had been included in the Senate-passed version.

They failed to protect the integrity of the reconciliation process. Democrats threw out a bipartisan point of order in the Senate-passed version that would have limited any new spending in response to reconciliation instructions to 20 percent. By converting reconciliation to a spending exercise, Democrats allowed new spending that was 2,900 percent larger than the savings instruction in their budget.

They failed to protect State and local governments from expensive mandates. Democrats threw out a Senate rule requiring a supermajority to waive the unfunded mandates budget point of order, thus making it much easier to burden State and local governments with costs from Federal Government requirements.

They failed to protect the firewall between mandatory and discretionary spending. Democrats weakened a budget point of order against mandatory spending in appropriations bills, and exempted the 2007 supplemental appropriations bill from the requirement altogether, thus allowing no enforcement protection against the $2.4 billion MILC program enacted last year.

I completely agree. As Republicans, our top priority is to pass on prosperity and a strong economy to the next generation. We need to keep spending in check, take the needed steps to address entitlement reform, and keep the economy growing with a fair, progrowth tax system in place. It is unconscionable to leave behind this kind of fiscal mess the majority is making.

Mr. President, what is the regular business? Are we in morning business? Do we have a half hour?

Mr. President, I am going to speak, and then I understand the Senator from Texas is going to speak a little bit about the coming events of the next 2 weeks which will be the issue of how we address the budget of the United States. This is an annual event, of course, and so what I am going to give is a little review of last year's budget and where we are going with this year's budget. I regret to say it is a review of what amounts to basically a horror movie because the budget which was produced last year by the Democratic Congress was a horrible thing for the American people in the way of increasing taxes and increasing spending and increasing debt on the American people.

Now, we will hear from the other side of the aisle: Well, the President's budget does this and the President's budget does that and the President's budget does this. However, I think the people who are listening to this discussion should understand the President has no legal responsibility in the area of the budget and producing the budget; that under the Budget Act, the President can send up a budget and that is where it stops. The actual budget is produced by the Congress of the United States, the House and the Senate. It is not--and this is important--it is not signed by the President of the United States. He cannot veto it. The budget of the United States is purely a child of and a product of the House and the Senate and the U.S. Government. So it is our responsibility--not the President's responsibility--to produce a budget that is responsible for the American people and especially for working Americans, so they are not overburdened by the Government, and for our children and our grandchildren, so we don't put too much debt on them as a government.

Last year was the first time the Democratic Congress produced a budget in 12 years. They had the benefit of the doubt. When they said they were going to control spending, people gave them the benefit of the doubt. When they said they were going to address the problems which we confront with entitlements because of the baby boom generation and the cost that is going to be put on our children, people gave them the benefit of the doubt. When they said they were going to use pay-go rules--this motherhood term--to discipline spending around here, people gave them the benefit of the doubt. When they said they weren't going to raise the national debt any more than the President was, people gave them the benefit of the doubt. When they said they weren't going to raise taxes on the American people, that they were going to find revenues by simply collecting taxes that were already owed, people gave them the benefit of the doubt.

Well, the shell game is over. The benefit of the doubt no longer applies. The record is in and the record is pretty dismal.

The budget from last year produced by the Democratic Congress increased taxes over a 5-year period by $736 billion. It dramatically increased spending. In the discretionary accounts, the Democratic budget last year, as it was finally executed, increased spending over what the President requested. The President requested a $60 billion increase in discretionary spending. It increased spending or proposed to increase spending when you combine the supplemental proposals and the actual budgeting proposals by over $40 billion. It added $2.5 trillion--trillion--to the Federal debt over the 5-year period. This term ``pay-go'' is the most abused term on the floor of the Senate and on the floor of the House in the area of fiscal discipline: ``Oh, we are going to use pay-go to discipline Federal spending.'' We hear that from every Democratic candidate starting with their Presidential candidates right down to their House Members.

Last year on 15 different occasions they either directly waived pay- go or they gamed it in the most cynical manner by changing dates, changing years, moving money here, moving money there, to the tune of $143 billion of new spending, which should have been subject to pay-go, which was not. It was simply added to the deficit and to the debt of our children, that our children will have to pay. They didn't do one thing about addressing the most significant fiscal issue we face as a country, which is the pending meltdown of our Nation's fiscal policy because of the $66 trillion of unfunded liability we have on the books as a result of obligations and commitments we have made to the baby boom generation which is beginning to retire right now--$66 trillion. The President at least sent up a package which proposed trying to discipline the rate of growth of entitlement spending--specifically Medicare--in very reasonable ways, by asking people such as Warren Buffett, for example, to pay a fair cost of their drug benefit--people over 65 who have a lot of money should pay some cost of their drug benefit; by using technology more aggressively, by limiting the number of lawsuits that are brought against doctors to something reasonable along what is known as the California or Texas models. The President's proposals would have limited this liability here as it related to health care by $8 trillion. It would have reduced it. They were reasonable proposals.

But the Democratic budget, as passed and as executed, not only didn't limit or reduce in any way this outyear liability, they actually aggravated it. They aggravated it dramatically, by $466 billion over a 5-year period. It was totally irresponsible.

On the tax side, this tax increase is real dollars--real dollars that Americans are going to have to pay. For 43 million Americans, under the Democratic budget as was passed last year, their taxes will go up by $2,300 a year--$2,300 a year beginning in 2011. For 18 million seniors, their taxes will go up by $2,200 a year--that is a lot of money for somebody--beginning in 2011. For low-income Americans, 7.8 million Americans who do not pay taxes today because the 10-percent bracket is in place, their taxes will go up. They will have to start paying taxes. For small businesspeople, 27 million small businesses that file what is known as a subchapter S, which means they basically are taxed as individuals, their taxes will go up on average $4,100. Those are real dollars people are going to have to pay in new taxes as a result of the Democratic budget.

Let's put it in another context. The Democratic budget, the nightmare budget, the shell budget, added $2.5 trillion to the debt: $736 billion in new taxes, $466 billion in new deficit spending in the area of mandatory increases, $205 billion over 5 years in discretionary increases over what the President suggested--huge increases, totally irresponsible.

Equally important, as I mentioned, here is the tax increase, discretionary increase, the debt increase under the Democratic budget and absolutely no mandatory savings, which is the biggest issue of concern for us as a nation as we look into the outyears from the standpoint of being able to pass on to our children affordable Government. If you give to your children the debts of today, this $2.5 trillion they added, and you put on top of that $66 trillion of debt as a result of Medicare and Medicaid and Social Security costs that we haven't figured out how we are going to pay for, you are essentially going to say to our children: I am sorry, you can't have as good a life as we have had as a generation. You are not going to be able to send your kids to college. You are not going to be able to buy your first house. You are not going to be able to live the quality of life Americans have been experiencing throughout the generation of the baby boom generation because we are going to put on you so much debt, so many costs, we are simply going to overwhelm you.

What did the Democratic budget do to address that? Nothing. A lot of lip service. In one of the most obscene--obscene is the only accurate term--actions of budgetary gimmickry, the Democratic budget claimed they were going to raise $300 billion in tax revenues from people who owe taxes but weren't paying them. This is how they are going to pay for all their new programs. They are going to raise $300 billion collected from people who owe taxes. Well, yes, those are the estimates. There is a huge amount of money out there that isn't being collected today and should be collected. But how much was collected under the Democratic budget of that owed and unpaid balance? Zero. Why was that? Why did they only get zero? Because they actually cut the dollars going to the Internal Revenue Service for enforcement. So not only could the Internal Revenue Service not collect the additional money--and they could never have gotten $30 billion anyway--the highest estimate the Internal Revenue Service gave us was something in the range of 20 billion to 30 billion was their best number. They plugged this number in that the Democrats said they were going to get, which is $300 billion, and why did they plug it in? Because they wanted to spend it. They wanted to spend $300 billion.

It is pretty interesting because, if you go back here, you will notice discretionary spending went up $205 billion, right here, and they claimed they were going to pay for that and have a little surplus with this empty number which they never got of $300 billion. Where did the $205 billion actually get paid for? How did it get paid for? It got paid for by putting debt--debt--on our children's shoulders.

Then, on top of that, of course, they are going to raise taxes by $336 billion, as I mentioned. For 34 million Americans, it means a $2,300 tax increase.

As if this isn't bad enough, their track record now is such a glaring example of fraud and misdeeds and misrepresentation of a shell game, of claiming one thing and doing the opposite in the area of tax policy and raising taxes when they said they would not, raising spending when they said they would not, not addressing entitlements when they said they would. As if that isn't bad enough, we now have the Presidential candidates out there campaigning. On top of the track record of total gross fiscal mismanagement, we have Presidential candidates on their side of the aisle making proposals to increase spending which dwarf what is already here, a dramatic rise in spending.

Senator Obama, for example, has proposed 158 new programs that we know of, that we can score--158--totaling annual increases in spending--annual--of $300 billion a year plus. Senator Obama and Senator Clinton say: Well, we are going to pay for this by taxing the rich; we will just tax the rich, tax the rich, tax the rich, tax the rich.

Let's look at the numbers. If we take the top rates in America, which are the rates the rich pay, back to the days of Bill Clinton, you take them from 35 percent--they pay 35 percent of their income to taxes now--take it back up to approximately 40 percent, 39.6 percent which is, I presume, what they are referring to--and, in fact, that is what they are specifically referring to--they say they are going back to the Clinton tax rates for the rich. You raise $25 billion in income taxes.

Senator Obama has already proposed spending $300 billion plus a year. So he is short $280 billion. From where is that going to come? That is going to come from raising taxes on all the other Americans who work and pay income taxes. He is talking about basically repealing all the Bush initiatives and, believe me, even if he does that, he cannot raise enough money to pay for what he is proposing. So he is talking about adding dramatically to the debt. It is a spend-arama, an Obama spend- arama, which is going to cause us huge problems with taxes.

So as we go into this next budget, there is no longer the benefit of the doubt out there for our colleagues on the other side of the aisle. They now have a track record of a budget that raised taxes $736 billion, a track record of a budget that increased discretionary spending by $205 billion, a track record of a budget that increased the debt by $2.5 trillion, a track record where they game their own pay-go rules--game them--so they spend $143 billion, which they should have had to offset, without any offsets, and a track record of not addressing the most significant issue we have today, which is how do we pay for the future costs of the retirement of the baby boom generation and not put that burden on our children.

I suspect the budget they are going to bring forward next week is going to look a lot like the one they passed last year. But when they claim this year they are going to get another $300 billion from some wizard behind the screen by collecting taxes that are owed but are not collected, I hope the press and the American people will say: But hold it. You already claimed that once. Are you going to do it again?

When they claim they are going to discipline spending around here by using pay-go, I hope people will say: Hold it. Last year you said you were going to do that, and you spent $143 billion subject to pay-go.

When they claim they are not going to raise taxes, somebody has to say: Hold it. The only way you can pay for your program is to repeal the tax laws as they presently exist and make the taxes go up dramatically on all Americans, not just on wealthy Americans.

And when they claim they are not going to increase discretionary spending, somebody needs to ask: Hold it. Last year you increased discretionary spending by $205 billion over what the President wanted in nondefense discretionary.

They have no credibility any longer. So I hope the American people and the press, and certainly I hope the Senate, will ask some serious questions of them as they bring forward their budget.

Mr. President, I yield the floor.

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

Mr. President, I understand we are in morning business.

Mr. President, I rise to speak briefly about one of the issues that has been debated over these 2 days, which is the reauthorization of the Foreign Intelligence Surveillance Act. This bill, which passed the Senate in a bipartisan way, is now sitting in the House. This bill is critical to our national security.

I know there are some who will argue that the bill represents a threat in some way to American civil liberties. From my standpoint, nothing is more important to me than protecting the rights of Americans under the terms of our Constitution.

One of the terms of our Constitution is that the Federal Government has the responsibility to protect the American citizens and America from attacks by enemies. That is what we swear an oath to, by the way, when we take this job, to protect and defend this Nation.

We know for a fact that the forces of Islamic fundamentalists, which are led by fanatical individuals, have committed themselves to attacking our Nation, destroying our culture, and killing Americans. We have already seen their actions take place in the 1990s when they attacked the warship USS Cole, when they attacked our Embassies in Africa, and, of course, on 9/11.

We also know for a fact that our best weapon of self-defense in this war is to be on the offense, to find them before they can harm us. That is one of the reasons we are in Iraq and in Afghanistan.

The great advantage we have in this war is the sophistication of our Nation. Obviously, the greatest advantage we have is we have the cause of right on our side--freedom, democracy, and liberty. But the great tactical advantage we have is the sophistication of our Nation and our capacity to use that sophistication in the area of our military

and in the area of our intelligence gathering to defeat these people before they attack us. At the essence of this, at the center of this is the ability to gather effective intelligence.

We cannot stop someone who wants to attack us if we wait until they commit the act. This is not like a criminal situation where somebody goes out and robs a bank and then we go and find them. This is a situation where people want to use every weapon at their disposal, and if they get a weapon of mass destruction, they will use it to try to kill hundreds, thousands, tens of thousands of innocent civilians, and Americans specifically, in order to carry out their perverse purpose of promoting what they see as their Islamic faith, as they interpret it.

We cannot be so naive as to believe these people are not out there and intending to pursue these courses of action when they have made it absolutely clear that is what they intend to do, when they have said innumerable times that is what they intend to do, and when they have actually done it by attacking us on 9/11.

To stop them, we have to find them before they can harm us. And the way we find them is we use, in part, our great advantage in the area of tracking them through electronic surveillance. And that is what the FISA bill is all about--giving the legal tools necessary to totally dedicated American citizens who man agencies, such as the National Security Agency, the Defense Department, the CIA, the State Department, and the FBI--to give those individuals who are totally dedicated to finding the people who want to attack us the tools necessary to do that, and to do that in a way that protects Americans' rights and civil liberties. This law does accomplish exactly that. No American can have their calls intercepted or overheard intentionally unless there has been a court review of that decision and a court order approving that action.

This law is directed not at Americans, it is directed at foreigners-- not Americans--whose purpose it is to do us harm, and they do not have the same rights as Americans. They should not. Their purpose is to destroy America. Why would we give them American rights? Yet for some reason the House of Representatives refuses to act on this critical issue in the area of giving our people who work for us, who work for the American people, and who are trying to protect America, the tools they need to accomplish that. It makes no sense to me at all.

Some argue the force behind denying this right and these authorities to the people who have responsibility to monitor these foreign activities and foreign individuals, these Islamic fundamentalists who wish to do us harm, the terrorists, the people who wish to limit that right wish to do so because they want to give the trial lawyers more capacity to bring lawsuits against the telephone companies, which are, obviously, an integral part of any electronic monitoring that is going to go on. I think that is unfortunate if that is the case.

We have asked these various groups, these corporations--remember, they are made up of American citizens. An American corporation is nothing more than a group of American citizens who have gotten together. Most of these corporations are pension funds which involve pensions of people who work at day-to-day jobs. Most Americans have some interest in stock through their pension funds, and these stocks are the companies that, basically, we are talking about, the telephone companies, in many instances.

These companies are being asked, and have been enlisted, and have been asked in the past to participate in protecting America. When the Government does something such as that, I think the Government also has a responsibility to say to those companies and their stockholders and their employees, many of whom are Americans, many of whom are working Americans, obviously, the ones who work for them and the stockholders who have pension funds who invest in them, that they should have protection from lawsuits which are basically inappropriately pursued because these companies are doing the bidding of the American Government as we try to protect the American people.

For some reason, the desire to energize those lawsuits has held up the ability to give the tools necessary to our intelligence community to pursue surveillance of very evil people who intend to do us harm.

It would be a great tragedy and a terrible outcome of this situation if America is attacked and that attack could have been thwarted or muted if we had the intelligence which would have been able to be gathered by electronic surveillance which would be made available through the authorities of FISA. It would be a true tragedy. I cannot imagine the recrimination that would occur in this country from the American people were we to be attacked and then discover that the information which might have thwarted that attack was unable to be obtained because the law which gave people the authority to pursue that type of information through electronic surveillance was being held up in the House of Representatives because the trial lawyers want a cause of action against the telephone companies.

It is incomprehensible to me that we have gotten to this point in the process of trying to develop our defense as a nation against people who clearly exist and who have expressed their intent so clearly and who have executed on that intent, as was shown on 9/11.

I cannot imagine that when a bill passes the Senate which has bipartisan support--this is not a partisan issue. It should not be a partisan issue. It has bipartisan support. It came out of the Senate, and it has been worked out between the leaders of the key committees in the Senate in a way that protects American civil liberties--that such a bill which gives the authority to those we ask to protect us, the authority they need to pursue the course of action they see is appropriate in electronic surveillance, that such a bill would be stopped in the House of Representatives out of what appears to be a tangential question of lawsuits--tangential in the sense that nothing is more critical to this whole exercise than protecting Americans from attack.

I join my colleagues who have risen over the last couple of days to express their frustration with the failure of the House of Representatives to act in this area. We need the House to act on the Senate bill, pass it, send it down to the President, and have it signed so that the people who we ask to protect us through electronic surveillance of terrorists who do not have the rights of Americans and who are not American, so that electronic surveillance can continue.

Mr. President, I yield the floor, and I suggest the absence of a quorum.

Madam President, I wanted to speak a little bit to the situation we find ourselves in. We have been here before. This is ``deja vu all over again,'' to quote Yogi Berra. We were under the same stricture when we were debating the agriculture bill a couple months ago. The Senate, by definition, is an institution that is supposed to work its will on legislation. The legislation doesn't come to the Senate under a closed rule as they have

in the House, where the House leadership says this amendment will be offered, and that amendment will be offered, and time will expire and we have to vote. The whole concept of the Senate is that you have an open and free-flowing debate, where people can bring their thoughts to the floor. You don't limit amendments and they can be on about anything. As a practical matter, the Senate then votes after it has fully digested the various ideas that have been put forward.

This approach the Senate has always taken was first defined and most effectively defined, ironically, by George Washington, when he said that the Senate is the saucer into which the hot coffee is poured--the coffee being the House ideas. Now, the majority leader seems to view the Senate as an adjunct of the House, that we should actually be a replication of the House, that the majority leader should have the unilateral right, first, to bring a bill to the floor, which he has done, but once he does that, he should not have the unilateral right to determine what the amendments will be, how many will occur, and how long the debate will be on those amendments.

This is not an autocratic institution. In fact, the Senate is about as far from an autocracy as you can get. Each Senator has the capacity to have a fairly strong impact around here. Each Senator has the right, under the rules of the Senate, to make their case. So the majority leader should not be surprised when he suggests he is going to immediately file cloture on a bill--which is fairly substantive-- stimulus II, as it is called--in order to shut off amendments from our side, our side is going to say, no, that is not the way the Senate works. We want to be heard. We want to be able to have the capacity to have our amendments.

The package they are talking about bringing forward may not be a stimulus at all. In fact, it may be the antistimulus package. What they are suggesting is a change in bankruptcy laws that will raise the cost of mortgage insurance--and it is estimated by 1 percentage point--for all Americans who try to get a mortgage after this, if this law were to become effective. It is populist politics, no question about that. You can beat the desk and say we are going to give relief to mortgages by allowing people to go into bankruptcy court and write their mortgages down. But the practical effect of that will be that the market will react and mortgage prices will go up, because people who lend money will have to anticipate that risk. That is what interest rates on mortgages account for--the risk of repayment of that money.

So it is a terrible idea, the practical implications of which will be not to stimulate the housing market but to undermine the housing market. There are initiatives here that might stimulate the economy; some have to do with housing. The Senator from Georgia has a superb idea. But some are tangential to the housing issue but would have a significant impact on our economy. For example, we could begin the process of straightening out our health care system. That would certainly help the economy. We could extend the dividend and capital gains rates. That would have a huge impact on our economy, if people knew they were going to have an extension of the capital gains rates. We could address the issue of employing and attracting to America more smart people to work in America, so they could be individual engines for economic activity, by extending the H-1B program.

There are a lot of good ideas that could stimulate this economy. There is absolutely no reason that the majority leader should try to use his position as majority leader to shut down the opportunity of the minority to bring those ideas and amendments forward. Let's vote on them. I can understand that the majority leader wants to move things along, and he does not want to have his Members make any difficult votes. That is his responsibility, I suppose to some degree, as leader. That is not the way the Senate works. The Senate is designed to be a place where you can put forward challenging ideas, debate them, and then vote on them.

We can deal with this bill in a fairly prompt way, but we cannot deal with it in a prompt way if those of us on our side of the aisle who believe we have some good ideas that maybe the majority leader does not like are not allowed to bring those ideas forward as to how to stimulate this economy.

We went through this exercise on the Agriculture bill, and it did not work. The leadership of the Senate and the majority leader finally decided we better get to the amendment process after 2 weeks of basically trying to shut down the amendment process.

There is no reason to go through this process again. Let's have an open amendment process where we in the minority agree to a certain number of amendments, but we certainly are not going to agree to preclear those amendments with the majority leader because he does not have that authority under the way the Senate works.

Madam President, I will have to oppose cloture on this bill at this time, although I would certainly like to see us get to this bill and do some serious consideration of how we stimulate this economy because I would like to see us extend the capital gains rates, extend the dividend rates, bring more smart people into this country to energize our economy, and address our health care needs to energize our economy. Those are issues I would like to see debated and voted on as we move forward.

Madam President, I yield the floor.

Mr. President, I wish to speak briefly about an important issue in my State that involves one of our country's great natural treasures, the White Mountain National Forest. Encompassing nearly 800,000 acres and drawing more than 6 million visitors each year, the White Mountain National Forest is not just a place for skiing, hiking, snowmobiling, or timber harvesting it is a source of pride for New Hampshire. And considering its relatively large footprint in our State, how this special place is managed by the U.S. Forest Service matters a lot.

Fortunately, the Forest Service especially Forest Supervisor Tom Wagner has done a great job in overseeing the White Mountain National Forest. Starting in 1997 when the new forest management plan was being developed, the agency made a concerted effort to reach out to the public, welcomed outside comments, and was sensitive to the sometimes competing views of interested parties. This planning process was not an easy task. Forest management is about addressing multiple uses and priorities, and ultimately it should be about compromise. The White Mountain National Forest has long been utilized for a variety of purposes, and any management plan should carefully strike a balance among them while also protecting the forest for future generations.

To come up with a balanced plan, Supervisor Wagner went out of his way to listen to public input and worked closely with government officials, environmental organizations, businesses, and recreation clubs. I met with him during the planning process and was encouraged by his outreach and evenhanded approach.

After years of hard work, Supervisor Wagner and the Forest Service arrived at a forest management plan that achieved general consensus among the major stakeholders and was well received across New Hampshire. I was pleased to support it when the final plan was released in 2005, including working with Senator Sununu on legislation implementing its wilderness recommendations. Signed into law in December 2006, this bill designated nearly 35,000 acres of new wilderness in the White Mountain National Forest and was applauded by environmental groups from across the State. I should also note that even our State's logging industry, represented by the New Hampshire Timberland Owners Association, supported the wilderness measure out of the spirit of compromise. Clearly, it was not in their business interest to support more wilderness designation, but they did it anyway since it was part of a balanced management plan that also included limited timber harvesting.

Unfortunately, this balance is now under attack, years after the plan was finalized and other elements have been implemented. A few environmental groups based outside New Hampshire have filed a lawsuit against two timber harvesting projects that were part of the 2005 Forest Management Plan. Encompassing less than 1,200 acres, the projects already have been subject to environmental review, would be very limited in scope, and would be carried out over existing road systems. By delaying these projects, this lawsuit is

not only blocking an economic boost for the State and additional revenues for local governments but also blocking the projects' environmental benefits since they would create habitats critical for wildlife management. Well respected environmental groups such as the Society for Protection of New Hampshire Forests, Appalachian Mountain Club, and Audubon Society have come out against this legal challenge, and I support their efforts to maintain the consensus approach underlying the 2005 Forest Management Plan.

The White Mountain National Forest can and should be accessible to a wide variety of users, and we have a carefully crafted plan to accommodate them. It is unfortunate that a few groups who had their chance to provide input during the planning process are resorting to litigation to take apart the 2005 Forest Management Plan. Of course, the Forest Service must follow the law and carry out certain environmental reviews, and I defer to the courts to resolve these legal questions. However, I strongly believe that this lawsuit runs counter to New Hampshire's interests and undermines the good will among our State's major stakeholders which has been critical for advancing sound environmental policies. I therefore hope that this legal challenge is resolved as soon as possible and that we can all support the Forest Service's management of the White Mountain National Forest, including its proposed timber harvesting projects.