Will the Senator yield for a question? If you count in the additional interest costs which would have to be incurred to do this tax cut because of the borrowing that would be necessary to fill the deficit gap created by the loss of…
Will the Senator yield for a question?
If you count in the additional interest costs which would have to be incurred to do this tax cut because of the borrowing that would be necessary to fill the deficit gap created by the loss of revenues from the tax cut, what would the cost of this tax cut be?
It seems to me eminently reasonable that one also ought to factor in the interest costs associated because you have to borrow money in order to do the tax cut. Am I correct that we would have to borrow money in order to do the tax cut?
May I ask the Senator one more question about his chart before he puts it down?
There is all this focus about this $550 billion figure being the amount of the tax cut. But as I understand it, the $550 billion figure is only part of the tax cut that is in the budget resolution. This is the part that would proceed under the special procedures, the so-called reconciliation, which prevents extended debate in order to address the issue. The budget resolution provides $550 billion there, but it also provides an additional $725 billion in additional tax cuts. Now, they would have to go through the regular procedure, but, nevertheless, that is $1.3 trillion. And then you add the interest, and you are talking about $1.6 trillion tax cuts, at a time when we are in budget deficit.
I understand. In fact, I understand that the budget deficit for this year is now projected to be twice as much as it has ever been before--an absolute record budget deficit.
Will the Senator yield for a question on that chart?
In January of 2001, when this administration first came in, we were projecting out, over the 10-year time period, a surplus of $5.6 trillion. At the time, President Bush, and his Republican supporters, said: Well, we are going to run this huge surplus. We should do a tax cut because we don't want to be taking taxes just to build up a surplus.
Well, a lot of people said: Don't be so sure about that. Let's not rush into it. Why don't we pay down the debt some more? We are finally doing that.
No, no, they wanted to do this big tax cut because we had a projected surplus. Well, they did their tax cut. They rammed that through here.
Now we are projecting big deficits, and they want to do another big tax cut, even though they are projecting big deficits.
Whatever the fiscal situation is--big surpluses or big deficits--it makes no difference; they are bound and determined to do tax cuts for very wealthy people.
As I understand it, analysis of the President's tax proposal shows that almost 50 percent of the benefits of that tax cut go to the top 1 percent of the population. Almost 75 percent of it goes to the top 5 percent of the population.
So there is this absolutely zealous drive for big tax cuts for very wealthy people regardless of the Nation's fiscal situation and regardless of the fact that this proposal is going to drive us deeper into deficit and deeper into debt. Isn't that the situation?
Will the Senator yield for a further point?
The Senator made reference to the context in which we find ourselves. I am frank to tell you, I think this is a reckless budget resolution. I think the President's budget proposal was reckless. I think this resolution is reckless. As the very able Senator from North Dakota has pointed out, we are in a war, and we have not only the war costs but the reconstruction costs. We are about to do a supplemental of about $80 billion, most of it devoted to that purpose. And there is no one who contends that is anything other than the initial downpayment on the cost.
But, furthermore, we still have the worldwide battle against al-Qaida and
international terrorism. We have to confront the challenge of providing for homeland security. We have other threats around the world, to mention but one, North Korea.
No prudent person would give away their fiscal ability to deal with those situations the way this budget resolution does. It is extraordinary what this budget resolution is doing.
I ask my friend from North Dakota, isn't this an abject failure to reserve fiscal strength to deal with these pressing problems which we know are right there in front of us?
Will the Senator from North Dakota yield for a question about one of his charts?
I would like to go back to the previous chart. As I understand it, because of the tax cut and also because we are constrained to do these programs for the war and for homeland security, over this 10-year period we are going to be using $2.7 trillion from the Social Security trust fund to cover those costs; is that correct?
As I understand it, if we didn't do that, that $2.7 trillion would be in the Social Security trust fund to help us take care of the extra stress on the system that will come from the retirement of the baby boomers, this upsurge in people taking retirement, so that one needs to understand if you didn't do the tax cut or if you constrained some of these other programs, you wouldn't then be drawing down the Social Security trust fund and, therefore, it would be in a better position to address the extra stress that will come when the baby boom generation retires. Is that the connection one should be making here?
Will the Senator yield?
This budget conference report is seeking an increase in the debt limit of just under $1 trillion; is that correct?
If the Senator will yield further, until when is this additional $1 trillion increase in the debt limit supposed to last? Will they not come back at any point, or are they going to come back again and again seeking increases?
Oh, my.
Would the Senator yield on that point?
Mr. President, I would like to put a question to the Senator from North Dakota.
Mr. President, when this administration came into office, it was my recollection that the Federal budget was running a surplus. Therefore, there was not only no increase in Federal interest costs, but we were, in fact, year to year, reducing Federal interest costs and had done so for 2 or 3 years prior to President Bush coming into office; is that correct?
Will the Senator yield for a question on that chart?
As I understand it, this chart shows the deficit as a percentage of the gross domestic product and it is almost 14 percent at this point out here; is that correct?
The European Union, when they made the economic agreement with respect to all the European Union countries, set as a requirement that the deficit that a country was running could not be greater than 3 percent of GDP; and countries had to go through a rigorous effort to get below the 3 percent of GDP figure as a deficit.
Yet what the President has given us, and what is reflected in this budget resolution as a first significant step in that direction, is a policy that is going to put the deficit as a percentage of GDP in the double figures. It will well exceed 10 percent.
I am struck in looking at that chart by the extent to which the cost of these tax cuts explodes, as the Senator says, in future years.
For instance, take the year 2023, this is all deficit. But all of this part of that deficit is from the explosion of the tax cut. The balance is from what happens in the trust funds for Medicare and Social Security. But this chart so clearly demonstrates that these tax cuts that are being talked about have built into them a tremendous expanded cost in future years.
It is extraordinarily dramatic because all of that is exploding tax cuts. We are being set on a path that is dooming us to large deficits and large debt.
Mr. President, will the Senator yield on that point?
My understanding is that the unemployment rate in the course of this administration has gone from 4 percent to almost 6 percent, and that the number of long-term unemployed, people out of work for more than 26 weeks, is now at almost 2 million people. Consumer confidence in the latest survey is at a 10-year low. So we are facing serious economic challenges.
Of course, the Senator suggested, as did the quote from our former colleagues, that you could do some effort to boost the economy this year and next year to try to bring us out of this situation, but the President's proposal does very little of that.
What the President's proposal does is put into place these exploding tax cuts out into future years that will significantly boost the deficit and the debt problem, rather than addressing the immediate challenge we have of trying to give a boost to the economy now. So not only does this budget proposal commit the Nation to a serious long-term fiscal problem, but it fails to do what needs to be done in the short term, in terms of trying to restore jobs and economic growth. I ask my colleague, is that not correct?
Mr. President, I thank the very able Senator from North Dakota, the former chairman of the Senate Budget Committee and now ranking member, for an extraordinarily perceptive opening statement with respect to this budget resolution.
The Senator from North Dakota has taken a long-term view of where the American economy is going and the challenges we face. He has assumed that role repeatedly, and I think it is extremely important that we not simply live for the moment and that someone point out the direction in which we are going and what the consequences will be.
The vote we are about to cast has consequences. It has consequences for today, tomorrow, and many years into the future. Members of the Senate need to fully appreciate the import of this decision.
I will speak a few minutes about equities in this budget resolution. What needs to be understood is that the whole driving thrust of this budget resolution is to put in place a large tax cut which, under the President's proposal, will go overwhelmingly to people at the very top of our income and wealth scale in this country.
The drive to do that is carried so far that my colleagues on the other side of the aisle are prepared to twist the procedures of this institution like a pretzel in order to push through their large tax cuts because they are encountering considerable resistance to them by people who are stopping and looking at them and saying this is not the responsible thing to do. Indeed, it is a reckless thing to do.
One of my colleagues looking at what they are trying to do said: It never occurred to me, I never thought I would see the day when they would be using these kinds of gimmicks in order to push their agenda.
This is no proper process. This is simply a twisting of process in order to try to get to this tax cut result.
Let's look at what the tax cut does and its implications. The budget, of course, sets all our national priorities. We make fundamental decisions within the budget: How much support we will provide for particular programs, what we will do on the tax side. Of course, the aggregate amount of the budget can have a profound effect upon our overall economy, not only this year but extending well into the future. The Senator from North Dakota very carefully and lucidly spelled out those large budget consequences, as is, of course, the responsibility of the leader on the Budget Committee to do.
We know the fiscal situation has deteriorated drastically since this administration took office. In January of 2001, when President Bush took office, the Congressional Budget Office was projecting a budget surplus over 10 years of $5.6 trillion. The President pointed to that surplus as a rationale for doing the 2001 tax cuts. Now, over that same period, the Congressional Budget Office is projecting a $2.1 trillion deficit, assuming that the President's tax proposals are adopted. This is a swing of $7.7 trillion in our fiscal position, a swing from a projected surplus of $5.6 trillion to a projected deficit of $2.1 trillion.
Yet facing this, the whole focus of this budget resolution has been whether to create room within it for another very large tax cut which the President is seeking. This is not going to be a growth package. In fact, there is hardly any stimulus in the President's proposal for this year or next year. Instead, this budget is going to drive us deeper into the deficit and debt hole. It is going to leave us with deficits projected out into the indefinite future. We are really mortgaging away our economic future. This is very bad macroeconomic policy.
In addition, within this budget our urgent national priorities are not being adequately addressed. There is not enough for homeland defense. We have a pressing health care problem in this country with regard to both the uninsured and prescription drug benefits for our senior citizens. We have an affordable housing crisis in which millions of working families cannot afford even a modest apartment in many high- cost cities. The mayors across the country are saying they are getting inadequate support to meet their responsibilities. Our first responders also have very large demands placed upon them. And instead of providing fully for education to give meaning to the Leave No Child Behind educational policy, we are focused on a tax cut proposal seeking to make sure no millionaire is left behind.
It must be understood that if you do these large tax cuts that benefit primarily wealthy people, you will not be able to support a number of programs which people all across the country are crying out for, and you will be boosting the deficit in a completely unreasonable fashion. There is no magic formula; it is all a question of balance. My own view is that a more sensible balance would be not to do these large tax cuts, and instead to strengthen some of these programs, and then to use the balance--most of the money--to hold down the deficit and not boost the debt and not commit the Nation down that path.
Let me talk about one other issue of fairness and equity. I want to note that in almost every previous instance when the Nation went to war, not only did we not cut taxes, we raised taxes in order to help pay for the war and meet its costs. There is a conference committee meeting at this very moment on the supplemental appropriations bill. We expect it to be somewhere in the vicinity of $80 billion, most of that directed to the Department of Defense for the costs of the war and some for reconstruction. It is obvious to everyone this is but a downpayment. No one is asserting this is anywhere near meeting what the full costs will be. So we know there is more to come.
That raises the question of whether this is the appropriate time to commit away significant resources for a tax cut to benefit wealthy Americans. As I said, analysis indicates that almost half of the benefits of the President's proposal would go to the top 1 percent, almost three-quarters to the top 5 percent. Is this the fair and equitable thing to do at the very time when the Nation is being rallied, as it should be, to support our men and women in the Armed Forces?
This is the time when we are talking about sacrifice, and it is appropriate we should be talking about sacrifice at a time like this because one cannot follow the events taking place now in Iraq without a deep appreciation of the sacrifice our fighting men and women are making and the risks they are taking every minute.
Let me ask this question: What sacrifice are those who are most favored in our society in terms of their economic position making at this critical juncture in our Nation's history? Not only are they not making a sacrifice, but indeed they are getting a very large tax cut which will place our economy in a more difficult position as we move into the future. What a sad commentary that these excessive tax cuts, which will contribute to deficits, which will build up the debt and the burden of paying the interest on that debt and, indeed, paying down that debt, will fall upon the fighting men and women when they return home and undertake their economic activities moving out into the future.
They are now being called upon to make a double sacrifice, the sacrifice of serving in the Middle East and the sacrifice when they return home of helping to pay off this debt that has arisen in large part because of these enormous tax cuts that are being given to those at the very top of our income
scale. Where is the fairness and the equity in this approach?
The Nation faces serious challenges. We have our men and women at this very moment in danger abroad. It is a time for all to sacrifice. What sacrifice here at home will the beneficiaries of the tax cut be making? This is such a sharp contrast with previous occasions when the Nation has gone into war. In most instances, not only did we not give a tax cut, recognizing we had to pay for the war, we, in fact, increased taxes in order to meet that burden.
At the beginning of World War II when Winston Churchill became Prime Minister, he told his nation, ``I have nothing to offer but blood, toil, tears and sweat.'' Our young men and women positioned in the Middle East are called upon to sacrifice even as we debate this budget resolution. There will be sweat, there will be tears, there will be toil, and there will be blood on their part. What sacrifice will be made by those who are the most well off in our society under this budget resolution? None whatsoever. In fact, not only are they making no sacrifice, but they are programmed to reap benefits, extensive benefits, at a time when the Nation is facing critical challenges. Should not those most advantaged be making their own sacrifice instead of seeking to reap a large economic benefit?
I urge the defeat of this budget resolution. I yield the floor.
Mr. President, will the Senator yield on that point?
I just note, the kids they are sticking it to are the ones who are fighting now in the Middle East. They are out there making a sacrifice now, and they are going to come home and be called upon to make a further sacrifice in order to carry this deficit and this increased debt.
And why are we having the deficit and the increased debt? In order to give a large, excessive tax break to very wealthy people. Where is the equity in that or the fairness in that? None whatever. None whatever.
But when you connect it all together, that is exactly what is happening. In order to give these large, excessive tax cuts, we are going to run these deficits and debt. And the burden on these young men and women who are there fighting, will be greatly increased, and they will have to pay it off over the rest of their lifetimes when they come home, having made that sacrifice.
Where is the sacrifice, in this budget resolution, on the part of those most advantaged in our society? Where is their sacrifice at this critical juncture in our Nation's history?
Not only is there no sacrifice, but they are reaping excessive benefits. This budget resolution ought to be defeated.
I thank the Senator for yielding.
Mr. President, as this presentation draws to a close, I ask unanimous consent to print in the Record a column by David Broder from March 23 entitled ``Cutbacks To Our Children.''
I want to quote a couple of paragraphs from the column:
Under the shadow of war with Iraq, the House and the Senate
last week fought a series of skirmishes over the federal
budget for next year. One big, overriding question was at
stake: Would President Bush and the Republican majorities in
Congress step up to the costs of battle, of homeland defense
and of national obligations at home, or would they pass the
costs on to future generations?
The answer, sadly, is that youngsters yet to be born will
see their choices limited and their prospects blighted by the
decision of today's politicians to press ahead with an
unaffordable tax cut even while the costs of war and
reconstruction make earlier spending estimates wildly
unrealistic.
The possible doubling of the national debt in the next
decade will drive up interest costs that must be paid every
year--billions of dollars that will not be available for
Social Security, Medicare or any of the myriad
responsibilities of the government here and abroad.
But the squeeze is not all prospective. Some dangerous
economies are being forced this year--cutbacks that will have
long-term damaging consequences for American society.
He then cites conversations he had with a number of attorneys general of the States, pointing out that cutting back on programs for young people will have disastrous consequences.
Once again, that is the connection that has to be made to giving these large tax cuts. I listened to my colleague from North Dakota as he talked about the procedure. I put a question to him. It strikes me as all a charade, is it not? As I understand it, we are going to pass a budget resolution that is going to have a tax cut figure in it. The Finance Committee in the Senate will be told they cannot reach that tax figure. They have to have the lower tax figure, as I understand it. But then when they go to conference to reconcile their tax figure with the higher House tax figure, let's say they settle at the higher tax figure, the House tax figure, the full amount, then they can bring it back to the Senate and that is protected under the special reconciliation procedures. Is that how it will work?