Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, for the information of my colleagues, Senator Wyden is next. We have been told he is on his way. We hope he will appear shortly. Then we will have Senator Grassley at approximately 4 o'clock. He will go for 20 or 30 minutes, or something like that. At this point, maybe it is an appropriate time to try to sum up some of the arguments we have tried to make with respect to this budget. The matter before us reduces spending by $40 billion over a 5-year period. During that period, we will be spending $14.3 trillion. In the first year, this package saves $5 billion. The tax cuts the House wants to apply in that same period are $21 billion. That doesn't reduce the deficit. It increases the deficit. The thing that is I think most disturbing about this budget plan is, according to its advocates, the debt of the country increases by $600 billion or $700 billion a year, each and every year of the 5 years of this budget. That is unsustainable. We are not making any serious progress. In fact, this package makes things worse. I see Senator Wyden is here. I yield up to 15 minutes to Senator Wyden.

Mr. CONRAD

Mr. CONRAD. I am happy to.

Mr. CONRAD. Mr. President, on the question of foster care, the bill includes $343 million in net cuts in foster care funding, including two cuts that will make it harder for some States to provide federally funded foster care benefits to certain grandparents who are raising their grandchildren. That is not the right priority for the country. On the question of child support enforcement, the Congressional Budget Office estimates show the conference report includes $1.5 billion cut in Federal funding for child support enforcement efforts over the next 5 years. This is funding that States use to track down absent parents, establish legally enforceable child support orders and collect and distribute child support owed to families. CBO has estimated that this loss in Federal child support funding will result in $2.9 billion in child support going uncollected over the next 5 years. These cuts are smaller than in the House bill. It will nevertheless take billions of dollars out of the pockets of mothers and children who are owed child support. This report goes on to say the conference agreement also contains some modest improvements in child support but the cuts in Federal support for the program and the associated loss of child support collections far outweigh the very modest benefits that some families would see as a result of a few improvements. I ask unanimous consent that this report from the Center on Budget and Policy priorities be printed in the Record after my statement.

Mr. CONRAD. I reserve the right to object for another 30 seconds. On the Byrd antidumping proposal, the Senator is correct that the repeal is not immediate but the repeal is still in the bill. It is postponed by 2 years. So I say on these issues we have a difference of position. I think this goes in the wrong direction. I think it expresses the wrong priorities for the country. Most seriously to me the whole reconciliation package increases the deficit and increases the debt. We ought to be doing precisely the opposite. Exhibit 1 [From the Center on Budget and Policy Priorities, Dec. 18, 2005] Budget Conference Agreement Contains Substantial Cuts Aimed at Low- Income Families and Individuals (By Edwin Park, Sharon Parrott, and Robert Greenstein) Some are claiming that the conference agreement on the budget reconciliation bill is closer to the Senate-passed bill in the low-income area than to the House bill and does not harm low-income Americans to any significant degree. While some low-income cuts in the House bill have been dropped, the conference agreement contains numerous cuts in various low-income areas--including Medicaid--that are much closer to those in the House-passed bill than to the provisions of the Senate bill. Taken as a whole, the provisions in the conference agreement would cause considerable hardship among low-income families and people who are elderly or have disabilities. This is due in no small part to action by the conferees to shield certain powerful special interests--principally pharmaceutical companies and the managed care industry--and to extract deeper savings from low-income families instead.

Mr. CONRAD. Absolutely. The Senator is correct.

Mr. CONRAD. I say to my colleagues, it is not just in Medicaid. They are cutting foster care. They are cutting child support enforcement. You have to ask yourself: What can they be thinking? The President's 2006 budget cites the child support program as one of the highest rated block/formula grants of all reviewed programs government-wide. This is a program that epitomizes the value of parental responsibility--increasing family self-sufficiency, decreasing public assistance use, reducing out-of-wedlock births and discouraging divorces. That is what the Center for Law and Social Policy said on November 17 of this year. And we have a bill before us that cuts child support. One has to wonder, What are they thinking? What are the priorities that are contained here, priorities that cut the spending $40 billion by targeting those who are the least fortunate among us--$40 billion over 5 years. It is only $8 billion a year. The first year it is only $5 billion of savings in a $2.5 trillion budget. That is one five- hundredth of the budget, and then they cut the taxes, especially for the wealthiest among us, much more. So, when you put the two together, they have increased the deficit, not reduced it; they have increased the debt, not reduced it at the very time the debt is exploding before the baby boomers even retire, which will put even more pressure on our budget. This is a budget that makes no sense. It makes no sense. I have never seen this town more disconnected from reality than we are with this budget. This bill hurts companies, farmers, and workers, repeals the antidumping provision, eliminating assistance that benefits U.S. companies, farmers, and workers who have been targets of unfair and predatory trade practices. I conclude as I began. This package does not make sense. When you put together all of the elements of reconciliation, it increases the deficit, it increases the debt at the very time the debt has already been dramatically increased, at the very time we are borrowing more and more money from abroad to float this boat, and this budget and this budget plan pushes us down the road to more deficits and more debt, and they have labeled it deficit reduction, but nothing could be more misleading. This is a package, when you put it all together, that increases deficits and increases debt and at the worst possible time--before the baby boomers retire--and puts even further pressure on these fiscal imbalances that are leading us to borrow more and more money from all around the world. At some point, we have to stop and we have to get on a firmer fiscal course. We have to restore fiscal discipline to our country. I thank the Chair and yield the floor.

Mr. CONRAD. We do. I have in my hand a report from the Center on Budget Policy Priorities, a group the Senator knows well, a very well respected group in this town. This is the headline: ``Budget Conference Agreement Contains Substantial Cuts Aimed at Low-Income Families and Individuals.'' One of the points they make is that this budget agreement increases the copayment and premiums for those who are on Medicaid. Those are the least fortunate among us. They say: A large body of research has found that such cost-sharing increases are likely to lead many low-income Medicaid patients to forego various health care services and medications or not to enroll in Medicaid at all. Second, it provides for benefit reductions. They go on to report that the conference report retains about a third of the House-passed cuts that, for many Medicaid beneficiaries, would eliminate the Federal standards which assure that they receive comprehensive health care coverage. It goes on. Some of the cuts are for, stunningly enough, child support enforcement. So they are cutting funds for child support enforcement. The CBO estimates show the conference report includes a billion and a half in cuts in Federal funding for child support enforcement efforts. That is funding that States use to track down absent parents, for child support orders, and to collect and distribute child support. The Congressional Budget Office has estimated that this loss in Federal child support funding will result in child support going uncollected over the next 5 years of $2.9 billion. Some of those advocates for this say they are friendly to families. What is friendly about letting deadbeat dads escape their responsibilities to their kids and their families? That is part of what is done here. If this package were really reducing the deficit, that would be one thing. It doesn't reduce the deficit. This package, when you include the tax cuts, dramatically increases the deficit. When you look at this package, not only does it cut child support enforcement and Medicaid for those who are the lowest income among us, it also badly underfunds child care because also buried in the package is reform of welfare. The Congressional Budget Office estimates that it would cost $8.4 billion for the States to meet the new work requirements. Only a billion dollars is provided. So if we are going to have these people go to work, one of the things that happens is the cost of childcare goes up. The cost of childcare goes up by $8.4 billion, and they short- funded it by $7.4 billion. We all know who gets the benefit of the tax cut. The tax cuts on the House side go overwhelmingly to the wealthiest among us. The average tax cut just on the capital gains and dividend provisions in the House bill provides those earning over a million dollars a year a $35,000 tax cut. I don't find this in any religious teaching that I have been exposed to. But the message is very clear. We take from the least among us to give to those who have the most among us. That is what this bill does. On top of that, when you put the whole reconciliation package together, it increases the deficit, increases the debt, and in chapter 3 expands the debt of the United States in one fell swoop by $781 billion.

Mr. CONRAD. I spoke to the student council leaders of my State. There were 900 to 1,000 of them in the room. I pointed out this fact about more and more of our debt being held externally. I asked them: How many of you think this is a sign of strength and how many think it is a sign of weakness? Some people say this is a sign of strength that people will loan us this amount of money. And I would say 98.9 percent of the students said they saw it as a sign of weakness, not a sign of strength. Maybe one reason is they realize they are the ones who will have to pay this bill. Now we have this bill before us. Here is the total spending we are going to do over the next 5 years--$14.3 trillion. Our friends come here with $40 billion of spending cuts. That is one three- hundredth, less than one three-hundredth, in fact, one three-hundred- fiftieth of the spending that is going to occur over the next 5 years, one three-hundred-fiftieth of the spending. Of course, it is going to be completely topped by the tax cut that they are proposing, a tax cut of $70 billion that is going to occur. It is interesting. Why do we have this package before us? Here is what the chairman of the Ways and Means Committee said in the House. He told a group of lobbyists that the spending cuts are necessary to make room for tax cuts. The spending cuts are $40 billion over 5 years. The tax cuts in the Senate are $70 billion. In the House, the tax cuts are even bigger. In the House, the tax cuts over 5 years are $95 billion. Some people have said to us: Senator, who knows what is going to happen in 5 years? How about this next year? What is the comparison in this package between the spending cuts and the tax cuts? Here you have it. In the Senate package, the spending cuts are $5 billion for the year and a $2.5 trillion budget. That is one five-hundredth of the spending. And the tax cuts are $11 billion. So in the first year, they are $6 billion under water. They are adding to the deficit, adding to the debt by $6 billion, not cutting it as they claim here in their speeches. But when you put the whole package together, they are increasing the deficit. If you look at the House package and their proposed tax cuts, it's much worse. Five billion dollars of spending cuts, $21 billion in tax cuts in the first year. So they are adding to the deficit by $16 billion in the first year alone, adding to the debt. (Mr. Talent assumed the Chair.)

Mr. CONRAD. I am happy to.

Mr. CONRAD. Yes.

Mr. CONRAD. It is very dramatic. You can see the trend continuing. Now, when we have a bond auction, about half of the debt is being bought by foreigners.

Mr. CONRAD. I was speaking to people in my State, and one person in my audience said: You know, the President says that it is the people's money and we ought to give it back to the people. Well, that is absolutely true. This person in the audience said: But it is turning out that it is the Chinese people's money, the Japanese people's money. That is whose money we are giving back. We are having to borrow from them to give it back. This is a bizarre situation that we are in, but that is what is happening. Some say, well, if you borrow the money, somehow it will pay off. Let's make sure that Chairman Greenspan doesn't believe that. He said this before the Joint Economic Committee: We should not be cutting taxes by borrowing. We are borrowing in huge amounts. This is his statement on restoring the pay-go provisions that we tried hard to get restored, which say you can have additional tax cuts, but you ought to pay for them. You can have new spending, but you ought to pay for it. He said this on March 2 before the House Budget Committee: All I am saying is that my general view is I like to see the tax burden as low as possible. And in that context, I would like to see tax cuts continued. But as I indicated earlier, that has got to be, in my judgment, in the context of a pay-go resolution. That is what we offered to our colleagues, but they didn't accept it. Here are the major provisions in this package. It cuts low-income beneficiaries in Medicaid. It cuts child support. It cuts foster care. I mean, really, is this the priority of the country to cut child support enforcement, foster care, and medical help for those who have the least among us? It delays Social Security supplementary benefit income payments for poor, disabled individuals. Now there are new work requirements imposing unfunded mandates on the States. Mr. President, I think these are the wrong priorities for the country. The reconciliation bill unfairly targets Medicaid beneficiaries. The Senate proposed no increase in cost sharing for these very low income people. The House insisted on $2.4 billion from those same very low income people. The conference report included 80 percent of what the House proposed.

Mr. CONRAD. That is correct.

Mr. CONRAD. Yes, I will be happy to yield.

Mr. CONRAD. Right.

Mr. CONRAD. Yes.

Mr. CONRAD. The Senator is exactly right. What is happening now is, we used to borrow the money largely from ourselves. Now we are borrowing from abroad. Since the President took over, the debt of the country has gone from $5.7 trillion to $8 trillion. That is a $2.3 trillion increase. Look at this: The debt has increased by $2.3 trillion, but a trillion of it has come from abroad. Over 40 percent of the debt that has been increased under this President is coming from abroad. Again, I go back to the historic record. It took 224 years and 42 Presidents to run up a trillion dollars of debt held abroad. This President has exceeded that amount in 5 years. During the President's term, the debt has increased $2.3 trillion, a trillion of it coming from foreigners.

Mr. CONRAD. They have doubled it. And the amazing thing to me is our colleagues are out here with a bill that is headlined, ``Deficit Reduction.'' If you read the fine print and look at their own estimates of what happens if this budget is finally approved and implemented, here is what it does to the debt. Anybody see any reduction of deficit here anywhere? This is taking us from $7.9 trillion of debt at the end of fiscal year 2005 and it is going to run it up to $11.3 trillion in 5 years. Each and every year, according to their estimates of what their budget does, the debt of the country is going to increase by $600 to $700 billion a year. They are out here talking about a deficit reduction package. Please. Do words have no meaning? Do we make phrases up in order to fool people? People aren't going to be fooled because each and every year they are going to be able to see what has happened under the claims that are being made. Have the deficits been reduced? Has the debt been reduced? Or is it skyrocketing? I make the assertion today that if this budget is actually implemented for the next 5 years, for which it has been approved, at the end of the time, the debt will be dramatically larger than the debt today. The kind of stunning result of all this is that our country is borrowing more and more money, much of it from abroad. I went and looked at the external debt of the country. It took 42 Presidents--here are their pictures, all of these Presidents--224 years to run up a trillion dollars of external debt. In fact, it was $1.01 trillion of external debt. This President has more than doubled it in 5 years. This President has run up more debt that is held by foreigners than 42 Presidents did in 224 years. That is a remarkable accomplishment. I hesitate to call it an accomplishment because accomplishment suggests something positive. There is nothing positive about it. The result is, here are the countries to which we owe money. We owe Japan almost $700 billion. We owe China almost $250 billion. And my favorite is the Caribbean Banking Centers. We owe them over $100 billion. One would think, in the midst of all this, Congress would want to actually do something to reduce the deficit.

Mr. CONRAD. That is exactly what he stated in 2002, small and short- term deficit. Now we are able to check that record. He made that claim in 2002, the first year we were into deficit, after running surpluses in the years leading up to that. In 2001, the first year he was in office, the budget from the previous administration had a surplus. The next year, after his policies were adopted, we plunged into deficit. Then he told us that year the deficits were small and short term. The chart shows what has happened. The next year the deficit got much worse. In 2003, it was approaching $400 billion. In 2004, the deficits actually exceeded $400 billion. This year, the deficit is over $300 billion. Of course, much of the Katrina costs have not been included in this year's deficit because it will be coming next year. It is very interesting, the President was wrong about saying no deficits. We saw that in 2002. So in 2002 he said they will be small and short term. He was wrong again. Instead of small and short term, they are large and long lasting; in fact, the biggest deficits we have ever had in the history of the country.

Mr. CONRAD. Yes.

Mr. CONRAD. The Senator is correct. If you go to the next step, what we have is a situation that is more serious even than that. The deficit does not capture the increases in the debt. The deficit last year was $319 billion. I say ``last year'' because we are now in Federal fiscal year 2006. That started October 1. So the 2005 deficit ending the end of September, the year ending the end of September, was $319 billion. But here is how much got added to the debt: not $319 billion but $551 billion. All of it has to be paid back. Of course, as the Senator knows, the big difference between the two calculations--the deficit and what got added to the debt--the biggest difference is the money being taken from Social Security to pay other bills. Last year, the last Federal fiscal year, $173 billion of Social Security money was taken to pay for other things. The result is, when you add that with the deficit and other trust funds that are being raided--another $59 billion--what got added to the debt was really $551 billion. If we look back on the relationship between spending and revenue expressed as a share of gross domestic product--and we do it in that way because economists tell us that is the best way to make these comparisons--the red line on this chart is the spending line. You can see, the spending had come down substantially until we reached the year 2000. Spending had come down each and every year of the Clinton administration as a share of gross domestic product. Now we have had a substantial uptick because of defense costs and homeland security, rebuilding New York. But look at the revenue line. The revenue line, which was at a peak when the President came into office--he said this was a record high. He was right--but look at how the revenue plunged with the President's policies. Most of this is tax cuts. And the other, of course, is economic slowdown. The result is, we have opened up a chasm between the revenue line of the United States and the spending line. We see that gap going forward, and really at the worst possible time because this is before the baby boomers retire. In looking at that, the President told us--the next year, after his 2002 address--in 2003: [O]ur budget gap is small by historical standards. So first he told us there would be no deficits. Then he told us the deficits would be small and short term. Both of those proved to be wrong. Then he said to us, well, they will be small by historical standards. Let's check that assertion because here is what we see: They are not small by historical standards. In fact, they are the biggest deficits we have had in the history of the United States. I know the President likes to say, well, as a share of GDP they are not as big as the deficits in the 1980s. But that is because he excludes the money he is taking from Social Security. Back in the 1980s, there was no money to take from Social Security, or very little. Now there are large amounts to take from Social Security, and the President is taking it all, every penny; last year, $173 billion. Over the next 10 years, under the President's plan, he is going to take $2.5 trillion of Social Security money and use it to pay for other things. This is at a time when he says there is a shortfall in Social Security. Well, he is helping create the shortfall in Social Security because he is taking the money and using it to pay for other things. Then the President told us in 2004: So I can say to you that the deficit will be cut in half over the next five years. Let's review. In 2001, he told us there were going to be no deficits. He was wrong. In 2002, he said it was going to be small and short term. Wrong again. The next year he told us, in 2003, the deficits were going to be small by historical standards. Wrong again. They are the largest deficits we have ever had in dollar terms. And if you measure appropriately, as a share of GDP, it is as large as the deficits in the 1980s, when you include the money from Social Security that he is taking to pay for other things. Now he says he is going to cut the deficit in half over the next 5 years. Well, let's examine that claim. Here is what the President says is going to happen: The deficit is going to get cut in half over the next 5 years. But he has really left out a lot of things to make that assertion. He has left out the war cost past September 30 of this year. There is nothing in his budget for that. He has left out the money to fix the alternative minimum tax, the old millionaire's tax that is rapidly becoming a middle-class tax trap. It costs $700 billion to fix. He has no money in his budget to do it. And, of course, his Social Security plan, which is the biggest budget buster of all, he has no money in his budget to do that. When you put all those items back in, you see quite a different picture emerge. In fact, past this 5 years, you see the deficit growing dramatically. Of course, the biggest reason for that is, the cost of the President's tax cuts absolutely explodes in the second 5-year period. Now, the President told us, back in 2001, how important it was to pay down the debt. He said at the time: . . . [M]y budget pays down a record amount of national debt. We will pay off $2 trillion of debt over the next decade. That will be the largest debt reduction of any country, ever. Future generations shouldn't be forced to pay back money that we have borrowed. We owe this kind of responsibility to our children and grandchildren. So the President, back then, was telling us he was going to pay down the debt. Well, there is no paydown of debt occurring here. The debt is exploding. It was $5.7 trillion back in 2001. It is $8 trillion today. And here is where it is headed: By 2010, under the terms of the budget that we are discussing, the debt is going to reach $11.3 trillion. So on this President's watch, the debt will have doubled. All the while, he was telling us he was going to have maximum paydown of the debt, and that we owed it to future generations to pay down debt. There is no paydown of debt going on here. The debt is skyrocketing.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD

Mr. CONRAD. Objection.

Mr. CONRAD. I ask for the yeas and nays.