Floor Statements

Mr. President, I ask unanimous consent that the Senate immediately proceed to executive session to consider the following nominations on today's Executive Calendar:

Calendar Nos. 46, 89, 93, 94, 95, 96, 97, and all nominations on the Secretary's desk.

I further ask unanimous consent that the nominations be confirmed en bloc, the motions to reconsider be laid upon the table, the President be immediately notified of the Senate's action, and the Senate then return to legislative session.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9 a.m. Tuesday, April 1; I further ask that following the prayer and the pledge, the morning hour be deemed to have expired, the Journal of the proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and that notwithstanding the previous order, the Senate begin a period of morning business until 10 a.m., with the time equally divided between Senator Hutchison and the minority leader or his designee; provided that at 10 a.m. the Senate proceed to executive session to consider the nomination of Timothy Tymkovich to be a circuit judge for the Tenth Circuit as provided under the previous order. I further ask consent that the Senate stand in recess from 12:30 p.m. to 2:15 p.m. for the weekly party meetings.

Mr. President, for the information of all Senators, the Senate will be in a period of morning business tomorrow until 10 a.m. Members who wish to make statements in support of our troops are encouraged to do so during that time.

At 10 a.m., the Senate will proceed to executive session to consider the nomination of Timothy Tymkovich, to be a circuit judge for the Tenth Circuit.

Under the previous order, there will be up to 6 hours for debate on the nomination. Following the use or yielding back of that time, the Senate will proceed to vote on the confirmation.

For the remainder of the week, the Senate is expected to complete action on several important issues, including the supplemental appropriations bill. Therefore, on behalf of the leader, I notify all Senators to expect a very busy week with rollcall votes each day.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order.

Reserving the right to object, I want to accommodate my friend and more senior colleague, but I had understood that the time was equally divided between the two sides; the Republicans would have 11 to 11:30, and the Democrats from 10:30 to 11. If that were not done, I would be more than happy to split the time available, after the Senator from Virginia is finished, with the Senator from Maryland.

Mr. President, we have heard on this floor and in the popular media that the main reason we are at war is because ``diplomacy has failed,'' and there are those who have attacked the President for his ``failure'' in diplomacy. We also hear that polls are running heavily against the war.

My mind goes back to a somewhat similar situation in Great Britain when Neville Chamberlain returned from Munich and said, ``We have established peace in our time.'' He referred to the Czechs, whose country he gave to Adolf Hitler in this fashion:

Why should we consider people who live in a land far away

and with whom we have little or nothing to do?

Winston Churchill opposed the treaty that Neville Chamberlain brought home from Munich. He offered stirring rhetoric, saying, ``We have suffered a defeat of the first magnitude.'' That stirred my soul as a young schoolchild reading about it. What I didn't realize until I became an adult is that Winston Churchill got only three votes, as Parliament overwhelmingly endorsed Chamberlain. And the popular polls, as I say, made Chamberlain the most popular politician in Great Britain, and maybe in all of Europe. Of course, within 2 years, we found that Winston Churchill was right and Chamberlain went off to historical disgrace.

The Munich example is not exactly analogous to this situation. No historical situation is exactly analogous to a current circumstance, but it is one we should keep in mind as we hear rhetoric saying that diplomacy has failed. Diplomacy in Munich is what failed and the war followed.

The Senator from North Carolina has a resolution she wishes to offer with respect to the current British Prime Minister. I yield to her the remainder of my time.

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

Mr. President, I have just heard the saddening news that our former colleague, Senator Moynihan of New York, has passed away. This is a great loss for the State of New York, but it is also a great loss for the people of the United States. He was one of the truly outstanding public servants of his time and one of the intellectual towers of this body.

I first met Pat Moynihan when I served in the Nixon administration working at the Department of Transportation. I can say with some accuracy that the name Pat Moynihan filled us all with dread and fear because he was the President's counselor on domestic issues. We were afraid he would come to the Department of Transportation and expose all of our weaknesses; that with his intellect he could discover very quickly where we were doing things wrong.

I met him at the White House as we would go over and discuss various transportation issues. On one occasion, Secretary Volpe invited Mr. Moynihan to come to the Department and address all of the Department's senior management. We had a program of management dinners where all of the senior officials of the Department would gather together and we would have a speaker come in and talk with us. Mr. Moynihan was the first of those speakers, along with Bryce Harlow, who came at my invitation, a little later. That was my moment in the sun with Secretary Volpe, that I was able to call Bryce Harlow and get him to come over and give the address. I still remember very clearly what Pat Moynihan said to us on that occasion and the lesson he gave us.

Being the student of history that he was, he went back to relatively recent history in describing pivotal events in America. He made this point: Political scientists assume that President Kennedy and President Johnson were activist Presidents, whereas President Eisenhower is always described as a passive President, or a pacifist kind of President. He said that particular characterization is given by their opponents, as well as their defenders, people defending Eisenhower's passive attitude toward Government, as well as those attacking it, and so on with Kennedy and Johnson.

However, he said, history will show that President Eisenhower affected life in the United States more than all of the things done by Kennedy and Johnson put together. Why? Because President Eisenhower was responsible for the creation of the interstate highway system.

Recognize again, he was addressing a group of officials at the Department of Transportation. He had done his homework and focused on a transportation issue. He outlined for us the changes in American life that came from the interstate highway system, how cities that were left off the system more or less withered and died and other cities that found themselves on the system had tremendous growth; how the system created efficiency for the transportation of goods and people all over the United States.

I remember one statistic, when I worked at the Department of Transportation, that said 95 percent of intercity trips took place on the interstate highway system. We focused on travel as being a competition in those days between air travel and rail travel, and indeed in the industrial age, going back to Abraham Lincoln's time and after the Civil War, almost all intercity trips were by rail. Then the airlines came in and we talked about the airlines cutting into the rail industry.

He pointed out it was not the airline industry that destroyed railroad passenger traffic; It was the interstate highway system and the convenience that came with the opportunity to take one's own automobile and go from one city to the other and then have local transportation while there. They did not have to catch a cab when they came out of the train station. They brought it with them.

It was this ability to see beyond the specifics of conventional wisdom, step back and see the overall picture that defined Pat Moynihan. He did it for us in that particular speech, but he did it throughout his entire career.

I remember as we became acquainted that he talked with me about the work he did with my father when my father was in the Senate and he was in the Nixon administration. They were talking about programs that the Nixon administration tried to put into place which, for one reason or another, the Congress did not accept. He said to me, if we had prevailed in that program that Wallace Bennett was for, we wouldn't have many of the urban problems that we have today.

I won't try to imitate his accent because it was distinctly his and was part of his charm.

One of the things that I had not understood but that I came to know while Pat Moynihan was in the Senate was the role he played in the rejuvenation of Washington, DC. The story is told and accepted as conventional wisdom that when John F. Kennedy went in his inaugural parade from the Capitol to the White House, he noticed how rundown Pennsylvania Avenue was--and it was. Those of us who remember Pennsylvania Avenue in the 1960s remember it as a place of rundown seedy shops and disreputable buildings that were badly in need of replacement. The conventional wisdom is that John F. Kennedy noticed that as he went by in his limousine and said, We have to do something about that. And the rejuvenation of Pennsylvania Avenue began in the Kennedy administration.

In fact, that is not true. It was not John F. Kennedy who noticed it; it was Pat Moynihan who noticed it and called it to the attention of John F. Kennedy, who, then, in the spirit of all of us in politics, took his staffer's advice and put it forward as his own.

Pat Moynihan, as chairman of what we used to call the Public Works Committee--now it is the Environment and Public Works Committee--Pat Moynihan, of what we used to call the Public Works Committee, presided over the public works that saw to it that Pennsylvania Avenue was turned into the kind of memorial avenue that the world's greatest power deserves; that it changed from what it had been to become the architectural delight that it is today.

I had not realized that until I read Pat Moynihan's memos. He shared them with me, in another circumstance, and going through the memos I realized he was personally the driving force behind that kind of an effort. That demonstrates how much of a renaissance man he was. He was interested in architecture. He was interested in art. He was one of those who helped create the National Endowment for the Arts.

Yes, as a legislator he was interested in public issues and public policy, but as a renaissance man he remained interested in just about everything else.

I can't think of any career covering a wider number of opportunities than his: Ambassador to the United Nations, Ambassador to India, serving Presidents regardless of party, regardless of ideology, with wisdom, clarity, and again the ability to see the big picture, the overall historical circumstance, and not just the issue directly in front of him.

I remember when he was chairman of the Finance Committee and we were locked in this Chamber in a bitter battle over health care. He did his duty. He was the good soldier. He did his best to carry the water for the administration. But in private conversations with him he would candidly share some of

the same concerns that the rest of us had. While he was the good soldier all the way to the end, I know he gave the administration Dutch uncle advice as to what they should be doing.

I remember sitting in the Cabinet Room of the White House when President Clinton had a group of us down to talk about what we needed to do to get trade authority, to get fast track. All of us were being appropriately respectful of the President, as you are in that kind of circumstance. All of us were trying to put forward our opinions in as tender and gingerly expressed a way as we could because we were with the President. Pat Moynihan sat at the President's left and the President said; ``What do we need to do to get trade authority passed?''

He said; ``Sir, you need to get more Democrats.''

That warmed my heart. The Republicans were in favor of fast track. We didn't want to say it. And Pat Moynihan summarized it: ``Sir, you need to get more Democrats.''

The President looked at him and said; ``Pat, you are absolutely right. How do we do that?''

Then they had a very candid discussion.

He was not overly awed by anyone, regardless--with respect to their position. But he was always awed by any human being who had something to tell him. His attitude was that he could learn from anyone.

His health was not the best. His passing is not unexpected. But this is a time for us to rejoice in the opportunity of having known him, having worked with him in this body and having been blessed by his intellect, his humor, his humility, and his great understanding. We shall miss him, and we express our great condolence to his wife Liz and to all of the members of his family.

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

Will the Senator yield?

How much time would be available on the amendment for those who are opposed to the amendment?

I ask unanimous consent that I be allowed to speak following the Senator from Montana in opposition.

Thank you, Mr. President. I yield myself such time as I may consume.

Mr. President, I have been very interested in the discussions we have had up until now. I think there are several things that need to be said. Even though they have been said before, they need to be stressed again.

With respect to the projections that are made about the future, and the numbers we are looking at, the one thing we can be sure about, with respect to the projections, is they are wrong. What we cannot be sure of is whether they are wrong on the high side or the low side. But we can be sure they are wrong.

We also can be sure they will be adjusted, revised, and issued with the same pronouncement of certainty a year from now. They will be different a year from now, but we will be told: These are the numbers.

The second thing I think we need to understand as we enter this debate is the nature of the recession we have just gone through. I have referred it to as the first recession of the information age.

The recession in 1990-1991, I believe, was the last recession of the industrial age. That is why this recession is so different from any others we have had.

I want to make it very clear, we are not currently in a recession. The press talks as if we are. I have heard speeches on the floor saying: This is the worst economy in 50 years. This is not the worst economy in 50 years. This is not close to the worst economy that we have had in this last half century, in any way.

It is different. It feels different. For some people, it feels terrible. For other people, these are booming times. If you are in the housing business right now, you say: What recession? Because housing has been booming all through the recession period.

If you look at the unemployment rate--when I went to school, I was taught in economics that 6 percent unemployment was full employment, that you could not get below 6 percent unemployment without causing strains in the economy. We proved that wrong in the 1990s. We got down to the point where we thought 3 percent unemployment was normal.

Well, we hit 6 percent unemployment as a result of the recent recession. We are now backing off from that number. The last number was 5.7 percent.

If we were to take the economic numbers that currently apply to the United States and transport them to Germany, the Germans would feel they were in the strongest recovery they could imagine, because unemployment there is double digits.

Last year--a sluggish year, a year that Alan Greenspan referred to as a ``soft patch''--we grew at 2.7 percent of GDP. The Germans are not growing. The Japanese are not growing. The French are not growing. They would be delighted to have our numbers. And they are clearly not nearly as bad as people are talking about them. But they are a soft patch. And the soft patch is too soft, and it is going on too long. And we need to address the question of what we do about it.

I have said, this is the first recession of the information age. It is not a recession driven by inventory imbalances which usually has signaled a recession in the industrial age. This recession was created by overinvestment, something that in the industrial age we never saw. And, indeed, as an investment recession, it has to be dealt with with an investment solution.

We saw the excitement, almost to the point of ``tulip time,'' that occurred in the late 1990s. I say ``tulip time'' to refer to the great tulip mania of the Dutch in the Middle Ages, where the price of a tulip bulb rose so high, as people thought tulips would always continue to increase in value, that families would mortgage their farms, sell everything they had, to buy a single bulb, in the hope they could sell that bulb to somebody else for more money later on. When the tulip mania burst, the economy of Holland was damaged for close to a century, as they had to deal with it.

Well, that is an overstatement of what we went through in the late 1990s, but we went through a fascination with dot-coms and with high- tech companies and IPOs, where we had an investment bubble. And the bubble burst. When it burst, we had a tremendous decrease in what economists refer to as ``the wealth effect,'' as Wall Street saw a correction to that overenthusiasm of the time. It was not brought about by a traditional business cycle. It was brought about by a new kind of overexuberance in the business cycle.

The Wall Street numbers were inflated improperly. They had to come down. But when they came down, the confidence was lost, the wealth effect was gone, and people who had overinvested then decided they were going to stop investing.

So we had an investment-led recession for the first time. As that recession was coming, but before it hit, we had the projection of a $5.6 trillion surplus over the next 10 years. That was given to us by the same models that now talk about deficits as far as the eye can see. They were not bad people who made those decisions. The models worked themselves out. The problem was, the assumptions that went into the models, seemingly logical at the time they were made, produced that kind of a situation.

What happened to the surplus? We have heard a lot of rhetoric about who is responsible for destroying the surplus. Some of the rhetoric has been quite political. Let's just look at the same numbers for the $5.6 trillion surplus and say, all right, as we feed in current numbers, what happened to the surplus?

This in dark blue is the Bush tax cut. Yes, that was done deliberately on the grounds that the surplus could afford it. The surplus said we should bring taxes down. I will talk about that in a moment.

The gray over here, light blue, depending on what you see it as, 45 percent of the loss of the $5.6 trillion surplus is the weak economy and changes in the estimates. In other words, these estimates were made before we realized where we were in the excesses of the 1990s. And as the economy contracted and people changed the estimates, obviously, while the tax cut represented 25 percent of the surplus, and that was done deliberately, this hit us because we didn't make the right calculations. To be sure and to be fair to the people who made the calculations, they did not anticipate September 11. They did not anticipate all of the shock waves that came out of that situation. They did not anticipate what would happen when the economy hit the investment recession to which I referred.

The red represents increased spending, increased spending at 28 percent. We have spent more than the tax cut. Some of that, again, we did not anticipate. We did not anticipate we would have to spend $40 billion to rebuild New York. We did not anticipate we were going to have to spend the amount of money that we have spent in homeland security. We did not anticipate all of the other. But a lot of that spending came out of the mentality that, gee, we have a $5.6 trillion surplus; we can spend a little more here and we can spend a little more there. And a little more here and a little more there turned out to be a lot more when added to the problems. And this is what we get.

Now let's put it in 2004 because we have had a lot of rhetoric about this particular fiscal year and the budget we are facing. Here are the same numbers with respect to the projections that were made for the surplus for fiscal year 2004. The Bush tax cut for that original projection of the surplus: 19 percent. It is a smaller percentage of the deficit for 2004 than it is for the 10-year. The weak economy: 51 percent. It is a bigger number affecting 2004 than it does the 10-year picture. Increased spending, 24 percent; and then other tax relief becomes a bigger issue.

I am happy to.

No. This is the tax increase that was enacted.

That is correct.

I happen to have another chart. I will get to that if the Senator will be patient. I appreciate his willingness to listen.

Back to 2004, we see once again the impact of the soft patch. We see that if we are going to look at this and say, what can we do to get this money back, the first thing we can do, the best thing we can do, is get rid of this. Fifty-one percent of the whole comes from the weak economy. Another good thing we can do is hold down this: 24 percent comes from increased spending.

For those who said, we will solve our deficit problem if we just repeal the tax cut--and we have heard that rhetoric on the floor--no, that is the least effective way to get this back where it belongs. I am glad people who have said let's repeal the tax cut are backing away from that position.

Here is another way of demonstrating how the projections went wrong and the impact of the spending. These were the revenues in that boom time. And then we began to see the revenues start to slack off just as outlays that were increasing at one level began to increase very sharply. Here again is the responsibility of where we are.

Here is the chart answering the question about the impact of the President's growth plan. This shows the total taxes that will be paid in the next 11 years, $29.3 trillion. And the President's growth plan says we will have $725 billion, or 2.4 percent of that amount, that will come out of the overall pie. If you add the $725 billion to the $29.3 trillion that will still be paid, you come up with $30 trillion. It is obvious that the $30 trillion is a nice round figure, which will be wrong. It will once again be wrong on the high side or wrong on the low side, but no one with any certainty can look out 11 years and add up the exact amount of tax revenue that will come in. It is simply not humanly possible.

The best estimate that can be made says: Well, it will be, and it is rounded off, at $30 trillion. So you take $30 trillion, and we are talking about 2.4 percent of that.

The net effect of this over the next 11 years is, if I might use a phrase we are all familiar with, within the margin of error. It is clear that the estimate of what this will be cannot be that close, to a 2.4 percent accuracy. It is within the margin of error. We are not talking about a major impact. Seven hundred twenty-four billion sounds like a huge amount of money, and of course it is. But when it is stretched out over 11 years and when it is compared to $30 trillion, then you put it in perspective.

Many people say: Why should we be cutting taxes at all? Let's err on the prudent side and get that money in.

The fact is, of course, that we cannot assume that if we set the tax burden at a certain level, the economy will yield that kind of tax revenue.

I was in Ireland with a group of my colleagues last summer, and the Irish economy was booming, growing more rapidly than any other economy in Europe. We said to the Prime Minister of Ireland: To what do you attribute your growth? He said: We attribute it to the fact we cut our corporate tax rate to 10 percent, and we immediately started booming.

I will concede immediately that is a simplistic answer and there must have been other reasons involved, but I will not concede that the decision to cut the corporate tax rate to 10 percent was a trivial one or that it did not have a major impact on seeing that the Irish economy became the strongest economy in Europe.

I think it is not an accident that they have the lowest tax rates and the highest rate of growth. I think there is some correlation between those two, while conceding that there are other aspects.

Let's look at the historic tax burden we have had in the United States measured in the only way that really makes any sense; that is, as a percentage of the economy. For those who say: Oh, no, that does not matter, let me repeat again a personal experience that I think demonstrates it does matter.

As I have said before, before I came to the Senate, I ran a business. When I was hired as the CEO of that business, the total debt of the business was $75,000. When I stepped down as the CEO of that business prior to running for the Senate, the total debt of that business was $7.5 million. If you are going to measure my stewardship by the size of the debt, you can say Bennett was a lousy steward and we are good to get rid of him because he took a little tiny debt of $75,000 and ran it up to $7.5 million, and now we have to pay off that debt and he left us in this terrible hole.

Let me add a few more facts. When I took over as the CEO of the company, they were doing about $300,000 a year in total business; $75,000 in debt represented 25 percent of the sales and, indeed, threatened the survival of the business because the business could not service a $75,000 debt on $300,000 in sales. Indeed, the business was losing money at $300,000 a year in sales and could not survive unless we did something.

When I stepped down as the CEO of the business, we were doing over $75 million in sales, and the $7.5 million in debt represented 10 percent of the sales instead of 25 percent of the sales. Furthermore, we were earning enough money, our margins were strong enough that we had over $7 million in the bank.

You say: Why didn't you pay off the debt? Because the debt represented primarily mortgages on real estate that had prepayment penalties on them. We had borrowed the money to build the facility. We needed to run the business, and it was cheaper for us to earn interest on the money in the bank than it was to pay the prepayment penalty on the mortgage.

I frankly think I did a pretty good job at that company. I think my stewardship was proper, if you measure it solely on the basis of the debt, though I took a $75,000 debt and ran it up to $7.5 million. If you take the total value of the company, it was failing, and at the point of extinction with a $75,000 debt, it had a market cap of $200 million or $300 million with the $7.5 million debt.

Applying that same principle, and I think it is legitimate to do so, we should look at our debt now not in terms of how big is it in numbers, but how big is it with respect to the size of the economy, and it is now at a level with respect to the size of the economy less than it was at the time of the Eisenhower administration.

The highest point of our debt as a percentage of gross national product was in 1945 at the end of the Second

World War. We were running a total debt of close to 1\1/2\ times the size of the economy. Adding in the Social Security trust funds and all of the rest of it, it is about 60 percent. We are way below a level that at one time in our history we demonstrated we could survive with.

Putting that same calculation to the issue of taxation, here is a demonstration of taxes as a percentage of GDP. We have drawn a line at 20 percent of GDP. When did taxes get higher than 20 percent in our history? Once back in 1945, again responding to the Second World War when we had a debt that was three times GDP, and we immediately brought the taxes down to 15 percent and started to see the economy growing in such a fashion that the debt started coming down in dramatic fashion as a percentage of GDP.

With the tremendous surge of tax revenue that came primarily as a function of the high-tech run up in the late nineties and the realization from capital gains when, in this Chamber, we cut the capital gains tax rate so people started cashing in their dot-com stocks and paying enormous capital gains revenues to the Treasury, even though the rate went down, the rate went down but the realizations went up. We saw, once again, for the first time since the Second World War the total tax take as a percentage of GDP go above 20 percent.

To me that was the more compelling argument than the one that even the President made when he said: We are taking too much of your money; we need to give it back to you. I said how does it fit overall in the economic pattern?

Historically, when the tax take begins to get up to this 20-percent line, it is a signal that you have too much burden on the economy and you need to bring the tax take down below 20 percent. That is why I supported the President's decision and supported the President's position in the Tax Code that said: OK, let's bring it down.

You always see tax revenues drop in a time of recession. We had the tax cut, and then it was followed by the recession. This is the estimate of what will happen under current law if we do not do something about making the tax cut permanent. We will be in a historic area until the tax cut expires and goes back up, at which point we will bounce back over 20 percent of GDP.

I want GDP to grow more rapidly than Government expenditures. If GDP grows more rapidly than Government expenditures, we have no need to worry about the future. But if it does not, we cannot tax our way to prosperity. We cannot tax our way to a balanced budget.

There have been a lot of quotations of Alan Greenspan around here. I happen to be a great Greenspan supporter. Sometimes I am a little surprised to think I can understand him. I have been in the Senate now 10 years and on the Banking Committee, and he has appeared before us every year. I am on the Joint Economic Committee, and he appears there every year. For the first few years, I did not break the code, but I think I am now beginning to understand Greenspan speak.

This is a point he made to a group of us that I think is essential to this debate: You can set expenditures at almost any level you want. You cannot set revenues at any level you want. Revenues are a function of the economy, and if you do something wrong in fiscal policy that causes the economy to fail, you are not going to get the revenues you may project.

One can, on the spending side, commit themselves to long-term, built- in obligations that they cannot then cover if the revenues are not there. This is the ominous number on this chart. If we can get the revenues back up by getting the economy back up, back to the first chart--get this part of it solved, the weakness in the economy--then we will be just fine.

Now we come to the amendment. After all of the presentation, we come to the question of how big should the growth package be? Should it cost $724 billion over 11 years or can we get rid of this part of the softness for only $350 billion over the next 11 years? I think that is the wrong question to ask because it is a mathematical question to which there is no correct answer.

As I said at the beginning, all of these projections are wrong. All of them will be revised. No one can, with certainty, make a prediction of what is going to happen in 11 years in this economy and be anywhere near close. So the question to ask is, Will the proposals the President has made actually produce a structural change within the economy that has a chance of dealing with the softness in the economy?

I go back to the other thing I said, which is this particular recession was an investment recession. So the fundamental question to ask is, Will the proposals the President has made address the investment side of the soft patch we are in?

Well, we had a tax cut. Part of it addressed the consumer side and we thought: that is going to stimulate the economy. We sent out checks, 300 bucks for everybody who had filed a tax return. We discovered that it was not stimulative. Why not? Because it was aimed at the consumer side. It was not aimed at the investment side. And it did not produce any major structural change to give us the kind of growth we needed. It did not even hit the consumer side to the point that we projected because many consumers we now know did not spend it. They used it to pay down personal debt, which is a very logical thing for many people to do. But it upset all of the projections we made of what would happen.

So as I see it, the President's proposal has two big groups. The first group is a collection of tax cuts: the marriage tax penalty, the elimination of the death tax, the child credit. That is about half of the $720 billion that we are talking about. I think those are all salutary. I think those will all help, and I am prepared to vote for them.

Then we come to the other half, which is the elimination of the double taxation on dividends. If we pass this amendment, the conventional wisdom is that the elimination of double taxation on dividends is dead, that it will never come out of the Finance Committee.

Let me focus on why the passage of the President's proposal with respect to the elimination of double taxation on dividends will go directly to the heart of the softness on this chart and why it is the investment solution to deal with an investment recession.

If we go back to the excesses of the late 1990s and look at them now historically, we find that one of the things that drove the excesses on the stock market, and indeed got us into trouble as far as corporate management is concerned, was the tremendous desire to drive up stock prices. Stock prices were driven up by driving up earnings estimates. Enron, WorldCom, and the rest of these companies did everything they could to create the notion that they had tremendous earnings. They drove it up partly by leverage. Leverage, by definition, means borrowing, and they were borrowing because they could deduct the interest. They could get the money, they could deduct the interest, they could produce the leverage, and in the case of Enron they could lie about it. Make no mistake, there was tremendous greed and chicanery going on, but the whole system was geared towards debt as the primary source of capital.

If you go to the equity market and try to entice people to give you sound equity investments, you have to say to them, we cannot pay you a return on your investment because dividends are taxed at an effective 60-percent rate, so your only return on investment will be if you can sell your shares to somebody else at a higher price than you bought them. Sound like tulips? Yes, there is some similarity. The greater fool theory--the bigger fool theory: I buy this stock hoping that there is a bigger fool than me out there who I can sell it to at a higher price.

That is not really the way the stock market works, but that is the way it seemed to work in the late 1990s. Remember when Alan Greenspan warned us against irrational exuberance in the stock market? The Dow was at 6,000. Today, it is over 8,000, and we are saying it is the worst economy in 50 years. It got to 12,000 before tulip time finally hit and it backed down.

If we change the situation so a company can go to the equity market and say, if you give us equity capital instead of going to the debt market to get debt capital, we can give you a return on your equity capital that will only be taxed once, we can give you a return that will make it logical for you to hang in with us over the long term,

even if the stock does not go up immediately in the short term, you can hold the investment because you are going to get your dividends and your dividends are only going to be taxed once. This is a structural change that the economy badly needs. This is a structural change, once again to quote the guru that has been talked about, that Alan Greenspan has endorsed as good for the economy. This is a structural change that can begin to address the question of the weaknesses in the economy that can have long-term consequences. And this is a structural change that will make us more competitive with the rest of the world because the rest of the world does not tax dividends at the same rate we do.

That is what this debate really should be about. It should not be about numbers: Is 350 too little or is 350 too much? Is 724 too big or is 724 too little? It should be about whether these proposals work. I believe they will.

If we have identified that they will work, then the question is, How much money do we need to put in the budget to allow them to go forward?

So the number comes after the decision of whether the program makes sense rather than the number driving the program. In my opinion, this is a gamble well worth taking.

Back to the total tax take that we are talking about, where the 2.4 percent of the estimate is within the margin of error, this is not a serious gamble. In my opinion, if one were to say, OK, we are going to cut this in half at 350 so the 2.4 percent goes down to 1.2 percent, that is really what we are talking about, 1.2 percent of a $30 trillion pie when the evidence is overwhelming, in my view, that the dividend thing will work.

How does it have to work in order to pay for itself? It has to make the economy 1.2-percent more efficient. The studies out of the business roundtable from the econometric model down at the University of Maryland say this will add 2 points to GDP growth. What will happen to this $30 trillion pie if it grows at 2 points higher than the present estimate? It is a gamble worth taking. That is why I oppose this amendment.

I just want to talk about your chart.

Mr. President, if the Senator will put back the one chart, I would like to address that chart. The one which the Senator quotes as coming from the President.

Under contract to the White House.

First, let me say, in another time and place, and I know others wish to speak, I think the Senator and I could explore this at some greater depth. I agree with him absolutely that the problem is ahead in the retirement years of the baby boomers. The place where we differ is whether this proposal the President has put before us will prepare us for a more efficient economy in that period and thereby give us the strength we need or whether it will do damage. The Senator obviously believes this proposal will damage the economy. I, obviously, believe it will better the economy.

As long as we are quoting economists back and forth, I once again say that Alan Greenspan has endorsed the dividend thing as a logical long- term structural change.

When Mr. Greenspan comes before the Joint Economic Committee, I will explore that with him in depth, so we can get it nailed down.

The point I want to make off the Senator's chart, where he has the black line demonstrating the impact of the President's policy and the green line representing the base, he shows the President's policy would indeed produce a significant beneficial change in 2004.

The question, of course, is whether or not the projections beyond that are reliable. Once again, my experience in this body is that everything gets changed year to year, as you go forward. To get us out of this soft patch we are in, it would be very nice to have that kind of a spike in 2004.

But even if we accept the chart exactly as it is presented, is it not true that the black line ends up, long-term, above the green line? That in the years out there, it shows the long-term impact of the President's proposed policy is a better economic result than the baseline, and that, if it is true, is the argument I am making that the long-term structural change of the President's proposal will give us, long term, a healthier economy, and long term is where the Senator and I both agree the problem lies.

With that, I do not want to prolong this. I have taken up too much of the Senate's time on it and I appreciate the indulgence of my colleagues as I have gone on. I appreciate the openness and candor and expertise of the Senator from North Dakota.

Mr. President, acting as the leader, I yield myself 7 minutes, with the understanding that following me, the Senator from Iowa will be recognized.

Mr. President, I have listened to the debate and wanted to make a few observations. I understand the Senator from Iowa is prepared to perhaps be a little more erudite than I. But I have heard personal references, and I must come share a few personal references, not specifically on this amendment but on the subject of Medicare.

The statement has been made that Medicare is a great success story. Medicare is a disaster. Everybody who deals with it understands that except the Congress. We have to understand that Medicare, in order to work properly, is going to have to be overhauled from top to bottom as quickly as possible. Taking the assumption that the present Medicare system is working well and all we need to do is add a little here and add a little there will further compound the disaster.

Let me give two examples that I hope will help illustrate this. The first is a town meeting where a woman came to me and said: Can you do something to fix Medicare?

I said: Well, tell me what the problem is.

She said: I am a professional woman. I am a college graduate. I think I am fairly intelligent. I handle my mother's affairs. My mother is in her eighties. She is on Medicare. I have finally figured out how to deal with Medicare. I throw away everything unopened, and at the end of the month I call the Salt Lake clinic and say: How much do I owe you for my mother? Trying to wade through the paperwork is so daunting, I can't even begin to understand anything they send to me. The assumption that my 85-year-old mother would be able to handle any of it is absurd. I tried. I struggled. I got the manuals. Finally, I discovered the way to deal with Medicare is to throw away everything unopened and once a month call the Salt Lake clinic and say: How much do I owe you for my mother?

This is a family and a circumstance where money is not a problem. Simply coping with the paperwork is overwhelming.

Second example: I have a daughter of whom I am enormously proud. She graduated with her master's degree from George Washington University after her bachelor's at Boston University. She got a job in a nursing home. She is a speech therapist. She is also a very enthusiastic young lady. She called me after about 4 days on the job.

Dad, she said--exploding over the telephone--you are a Senator. You have to fix Medicare.

I said: Now calm down. Tell me what your problem is.

She said: Medicare is a disaster. Medicare is terrible. Let me tell you my experiences.

And she began describing some of the problems she had in giving proper care to the people in this nursing home and always being told, no, you can't do that until you check to see whether or not Medicare will cover it.

She said: I thought that would be a fairly simple thing to find out. So I go down the hall and say: Will Medicare cover this procedure? It takes days to get an answer to that question.

Then she said: Dad, do you know who the highest paid person in this facility is--with a salary higher than the administrator, higher salary than the doctors, higher salary than the nurses, higher salary than any of the health professionals? It is the woman who understands Medicare. She gets paid more than anybody here because that skill is in greater demand and shorter supply than professional medical skills.

She called me back sometime later and said:

I have had patients die while we waited to get an answer as

to whether or not Medicare would cover it. Their family said,

``Don't touch my grandmother; don't do anything until we find

out whether Medicare would cover it.''

It was so arcane and difficult to work through all of the paperwork and come up with the answer--well, maybe they would have died anyway; they were old and in a nursing home. People die in nursing homes. But this was a very traumatic experience for my daughter, who was convinced that the kind of therapy she was trained to provide, she was prepared to provide, which could have extended the life of that particular patient.

So as we get carried away with the rhetoric around here about what we have to protect and not protect about Medicare, let us begin to understand the truth about Medicare. Medicare is the best Blue Cross/ Blue Shield fee-for-service indemnity plan of the 1960s--frozen in time. We don't practice medicine the way medicine was practiced in the 1960s when Medicare was created. We don't even come close anymore.

Yes, we need a prescription drug benefit because prescription drugs do things now that they had nothing to do with in the 1960s. But instead of pasting it on to the existing circumstance and creating a new set of forms and eligibilities and more demand for that highest paid person in the nursing home, let us as a Congress face the fact that we need to start from a clean sheet of paper, all over again, with all of the money we are putting into it--which is sizable--and say let's create a whole new system. This budget doesn't do that, but this amendment that is being offered will make things worse in that regard.

I only hope that somewhere along the line we can begin to face the fact that Medicare is 40 years old, whereas the practice of medicine is changing so constantly that we could say it is only 40 months old. Let's start with a clean sheet of paper. Let's not try this Band-Aid approach. Let's not just put this here, and put that there, and tell our constituents we are giving them something when, in fact, we are perpetuating an existing problem and ultimately making it worse.

Mr. President, I take this opportunity to pay tribute to Lloyd Ogilvie, our Chaplain. I have told him of the deep affection that I and my wife Joyce have for him and Mary Jane. I wish I could reach as deeply into the writings of Robert Burns as he is able to and come up with exactly the right epigram.

I will point out that he and I share the common experience of living in Scotland as young men. He, there while he was studying for the ministry, and I, there while I was serving as a missionary for my church. In that experience, each of us gained deep respect for the Scottish people and Scottish traditions.

That is why you find me today sporting the tartan of my family, the Wallace tartan. My father served in this body as Wallace Bennett, coming from a long line of Wallaces, including one William Wallace. Whether it was the William Wallace who morphed as Mel Gibson onto the silver screen or not, I am not sure.

Lloyd Ogilvie has made his mark here in a tremendous way, and he deserves all of the wonderful things everyone has said about him. I simply quote a hymn that we sing often in our church. I don't think it is unique to our church, but we sing at this time when young men go out in the circumstance I have just described--go off to a foreign land or to a foreign part of the world to preach the gospel. We sing to them:

God be with you till we meet again;

When life's perils thick confound you;

Put His arms unfailing round you;

God be with you till we meet again.

This is what I say to Mary Jane and Lloyd Ogilvie, from all of us. God be with you till we meet again.

Mr. President, I ask unanimous consent that the Senate proceed to a period for morning business.

Mr. President, I listened with interest to my friend from Montana. While I had not prepared a response, I feel, nonetheless, moved to make a response.

My colleague from Montana made the point that Saddam Hussein must be removed and then suggested that we need more time and we should be willing to grant more time. This is, indeed, the position of many people in the United Nations. They keep saying just another week, just another month if necessary. The Senator from Montana used that same timeframe.

In my opinion, we do not have that option. In my opinion, we have two options, not three. The two options are either to go ahead or to come home. The option of staying in place and allowing the inspections to go on for an indeterminate period of time is not a viable option.

The reason for that is that our troops are not where they are on anything like a permanent status. They are there at the indulgence of foreign governments that have allowed them to come in with the firm understanding that they will be there very briefly. In the countries where they are currently bivouacked, they are simply there, on the edge of moving forward.

If we now say to those countries, the host countries that are harboring our troops, we are going to leave them there for an indefinite period of time while the inspectors continue to poke around Iraq, I expect that country after country will say: No. We did not bargain for American troops in these numbers on our territory for an indefinite period of time.

If you are not moving ahead into Iraq, withdraw your forces and go home. And if we do withdraw our forces and go home, it is clear Saddam Hussein will not be removed until he dies. And he may very well die in his bed, because once the United States has sent the signal to the world that we are prepared to do whatever is necessary to remove this brutal dictator and then we back down and bring our troops home, we can never put them back in those places again. No host government currently allowing American forces on its soil will say OK, now that Saddam Hussein has nuclear weapons, you can come back and be on our soil and make us a target for those nuclear weapons. No. We have two choices. We can either move ahead or we can come home.

It is not the most sympathetic character in Shakespeare. A comment made by Lady Macbeth becomes appropriate here. ``If it were done when 'tis done, then 'twere well it were done quickly.''

If we are going to remove Saddam Hussein, we must do it quickly. And if we are not, we should not leave our troops in their present posture for an indefinite period of time while inspectors poke around on a scavenger hunt in Iraq.

Mr. President, I rise today to introduce the ``Glen Canyon National Recreation Area Boundary Revision Act.''

This legislation will revise the total acreage within the National Recreation Area's, NRA, boundary to reflect the actual acreage within the NRA, and it will also do much to protect the scenic view of Lake Powell as seen by those traveling along U.S. Highway Route 89.

As enacted into law, the enabling legislation for the Glen Canyon National Recreation Area, inaccurately reflected the acreage within the NRA boundary. This legislation would correct the acreage ceiling by estimating the acreage within the NRA to be 1,256,000 instead of 1,236,880.

Secondly, this bill would authorize the Secretary of the Interior, to exchange 320 NRA acres for 152 acres of privately owned land in Kane County, UT. Currently, Page One L.L.C. owns 152 acres between U.S. Highway 89 and the southwestern shore of Lake Powell. This private land provides a breathtaking view of Lake Powell from Highway 89, which is the main viewshed corridor between the highway and the lake. This land also encompasses three highway access rights-of-way and a developed culinary water well. In an effort to protect this viewshed and better manage its boundaries along its most visited entrance, the National Park

Service, NPS, has been negotiating with Page One to exchange 370 acres of NRA lands for these 152 acres. The approximate value of the NRA lands is $480,000 whereas the private land's appraised value is $856,000. Page One has agreed to donate the balance of appraised value to the NPS.

By authorizing this land exchange, this bill will allow the NPS to preserve and better manage the corridor between the park and Highway 89, which affords such a scenic view of Lake Powell. This boundary change would not add any facilities, increase operating costs, or require additional staff and as such, it will not add to the NPS maintenance backlog.

Because of the common interest in preserving this scenic corridor from development, this legislation has garnered the support of the administration, the Kane County Planning and Zoning Commission, the National Parks Conservation Association, and the Southern Utah Planning Advisory Council. In light of the benefits provided by and community support for this proposal, I look forward to working with my Senate colleagues and the administration to pass this legislation this year.

Mr. President, I rise today to introduce the ``Glen Canyon National Recreation Area Boundary Revision Act.''

This legislation will revise the total acreage within the National Recreation Area's, NRA, boundary to reflect the actual acreage within the NRA, and it will also do much to protect the scenic view of Lake Powell as seen by those traveling along U.S. Highway Route 89.

As enacted into law, the enabling legislation for the Glen Canyon National Recreation Area, inaccurately reflected the acreage within the NRA boundary. This legislation would correct the acreage ceiling by estimating the acreage within the NRA to be 1,256,000 instead of 1,236,880.

Secondly, this bill would authorize the Secretary of the Interior, to exchange 320 NRA acres for 152 acres of privately owned land in Kane County, UT. Currently, Page One L.L.C. owns 152 acres between U.S. Highway 89 and the southwestern shore of Lake Powell. This private land provides a breathtaking view of Lake Powell from Highway 89, which is the main viewshed corridor between the highway and the lake. This land also encompasses three highway access rights-of-way and a developed culinary water well. In an effort to protect this viewshed and better manage its boundaries along its most visited entrance, the National Park

Service, NPS, has been negotiating with Page One to exchange 370 acres of NRA lands for these 152 acres. The approximate value of the NRA lands is $480,000 whereas the private land's appraised value is $856,000. Page One has agreed to donate the balance of appraised value to the NPS.

By authorizing this land exchange, this bill will allow the NPS to preserve and better manage the corridor between the park and Highway 89, which affords such a scenic view of Lake Powell. This boundary change would not add any facilities, increase operating costs, or require additional staff and as such, it will not add to the NPS maintenance backlog.

Because of the common interest in preserving this scenic corridor from development, this legislation has garnered the support of the administration, the Kane County Planning and Zoning Commission, the National Parks Conservation Association, and the Southern Utah Planning Advisory Council. In light of the benefits provided by and community support for this proposal, I look forward to working with my Senate colleagues and the administration to pass this legislation this year.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar Item No. 30, S. 162.

Mr. President, I ask unanimous consent that the bill be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements relating to this bill be printed in the Record.