Kent Conrad

Mr. CONRAD

Mr. CONRAD. So I have 53 minutes remaining on my side, and they have an hour left on their side?

Mr. CONRAD. Madam President, first I thank the ranking member on the Senate Committee on Finance, Senator Baucus, for his leadership and for the extraordinary amount of work he does to make the work of the Committee on Finance as responsible as it can be. There are many provisions in the underlying bill that has come out of the Committee on Finance that I support. I think they are broadly supported extensions of expiring tax provisions that ought to be extended. I salute the chairman of the Committee on Finance, Senator Grassley, for the good job he has done in putting together this package. While I agree with many of the specific provisions, I have one profound area of disagreement. That profound area of disagreement is that this package is not paid for. The result, if we pass this package, will be to deepen the deficit, to add to the debt, when we already have record deficits and we already have runaway debt. My colleagues are going to have to answer the question, Why shouldn't we pay for these tax provisions? Why shouldn't we cover the cost? Why shouldn't we prevent the deficit from being expanded? Why shouldn't we prevent the debt from being deepened? That is the question posed by my amendment. It takes many of the provisions in the Committee on Finance bill, the expiring tax provisions, and extends them for 1 year. It pays for them fully. It is very important to remember the history. How did we get in the position we are in today? My colleagues will remember this very famous chart that the administration and the Congressional Budget Office presented back in 2001. This part of the chart I call the fan chart showed the range of possible outcomes if we didn't change any budget policies. This range of possible outcomes from a best case scenario; to a median scenario, the midpoint between the range of possible outcomes is the prediction line adopted; to the worst case scenario. These were the projections given to us if we just did nothing. My colleagues on the other side said: No, this is too conservative, this range of possible outcomes. They said: Don't you understand, if we have tax cuts we will get more revenue so we will be above the midpoint of the range. We might be even above the best case scenario. The problem with that theory is that it did not work out in reality. Here is what happened in reality: This red line is far below the worst case scenario outlined by the Congressional Budget Office in 2001. I have caught the chairman's attention. He will remember the chart very well from 2001, what the Congressional Budget Office said was the range of possible outcomes. The Congressional Budget Office adopted this midrange of the estimates as their projection. Many of my colleagues on the other side told me, when I said we shouldn't be betting on a 10-year forecast: Kent, you are way too conservative. Don't you understand if we cut taxes we will get more revenue. We will be above the midpoint of the range of possible outcomes. Now we can go back and we can check what has actually happened. That is this red line. It is below the worst case possible outcome. Far below it. So this notion that the tax cuts were going to generate more revenue and were going to prevent massive deficits proved to be wrong. It is very simple. This is not theory. This is not ideology. This is reality. This is what really happened. We can look at it in a different way. This chart looks back to 1980, the relationship between spending and revenue of the United States expressed as a share of gross domestic product. Why do we do it that way? Why do we do it as a share of gross domestic product? Because every economist says that is the appropriate way to compare spending over time and revenue over time because it takes out the effects of inflation and growth, so we are comparing apples to apples. Here is what the line shows: Spending in the 1980s was between 21 and 23.5 percent of gross domestic production. During the 1990s, interestingly enough, during the Democrat administration, the spending came down as a share of gross domestic production each and every year, the 8 years of the Clinton administration. So at the end of that time we were below 19 percent of gross domestic production on spending. Since that time, spending has gone up to approaching 20 percent of gross domestic production now. My colleagues on the other side of the aisle want to blame Democrats for spending. But Democrats have not been in charge during this period. During this period, Republicans have controlled the White House, the Senate, the House. They are responsible for every dime of this increase. Let's look at the revenue side. When President Bush came in, revenue--as he correctly stated--was at a very high level historically, about 20.6 percent of gross domestic production. It was substantially above where it was in the 1980s and 1990s. But look what has happened since. Revenue has collapsed. Last year it was the lowest it has been as a share of gross domestic production since 1959. Some of my friends on the other side want to concentrate on this uptick. And it is true, revenue has increased over the last year. But it is still way below where it has been historically and way below where it was in 2001. The result is the increased spending, the reduced revenue--by the way, about half the reduction in revenue is from tax cuts--the combination of increased spending and reduced revenue has opened up a chasm. That is why we have massive deficits and why we are going to have massive deficits going forward--and, I might add, at the worst possible time. Why is it the worst possible time? Because the baby boomers are going to start to retire in 2008. Right here the baby boomers are going to start to retire. That is going to change everything in a dramatic way. The President assured us when we embarked on this course that there would not be deficits. Then, the next year, he told us the deficits would be small and short term. Then, the next year, he told us they would be small by historical standards. Now he says he is going to cut them in half over the next 5 years. Let's compare rhetoric to reality. Here is what has happened. In 2001, the first year he was in office, inheriting surpluses from the Clinton administration, we had a $128 billion surplus. The next year, we were back in deficit. The next year, 2003, we had the biggest deficit ever, only to be exceeded, in 2004, by an even larger deficit. And this year, again, we have the third largest deficit in our history but somewhat of an improvement. Let me say to my colleagues, this modest improvement is largely illusory because it focuses just on the deficit. I say to my colleagues, what we ought to be thinking about, what is really far more important to the fiscal future of the country, is not the growth of deficits but the growth of the debt. Why do I say that? Because if you look at what happened to the increase in the debt last year, you see that it increased far more than the deficit figure that is quoted in the news media. Why is that? Well, the biggest reason is because under the President's plan, $173 billion of Social Security money was taken to pay for other things. That all gets added to the debt. It all has to be paid back. But it is not included in the deficit calculation. Very frankly, these deficit calculations are increasingly irrelevant to understanding the true fiscal condition of the country. Now, last year, instead of the debt increasing by what was the advertised deficit of $319 billion, the debt of the country actually increased by $551 billion. I find that this is largely not understood. When I do presentations, most people think, in kind of a commonsense way, that the debt must increase by the amount of the deficit. But that is not the case. The fundamental reason it is not the case is because under the President's plan money is being taken from every trust fund in sight to cover the spending, and it all gets added to the debt, but it is not included in the deficit calculation. So last year, the debt of the country increased by $551 billion. This is so important to understand historically. I see the news media, very frequently, say: Well, as a share of GDP the deficit is not as big as the deficits were in the 1980s. That is true. But it is totally misleading. Why? Because back in the 1980s, there was virtually no Social Security surplus to be used to pay for other things. In fact, until 1984, there was no Social Security surplus--none. Then, in the 1980s, the Social Security surpluses were very modest. But look what has happened over time. The Social Security surpluses have exploded, masking the true size of what is being added to the debt of the country--masking the true size of the deficits is probably a better way to say it. Last year, the amount of Social Security funds that were taken to pay for other things reached $173 billion, and not a dime of it got counted in the deficit calculation. It all got added to the debt. It is all going to have to be paid back, but you don't read about it anywhere in the news media. They don't talk about how much the debt increased. This is a shell game of enormous proportion that is going on here. I say to my colleagues, if any private sector entity tried to do what we are doing here, they would be headed for a Federal facility. But it would not be the Congress of the United States, it would not be the White House, they would be headed to Federal prison because any private sector entity that tried to take the retirement funds of its employees and use them to pay for current expenses, they would be guilty of Federal violations of law. They would be guilty of fraud. You cannot take the retirement funds of your employees and use it to pay current expenses. That is exactly what we are doing here, every year. Under the President's plan, over the next 10 years, at the very time he says Social Security is short of money for the long term, his budget plan and the budget plans that passed here in the Congress of the United States, are going to take $2.5 trillion from Social Security and use it to pay the operating expenses of the Federal Government. Is anybody paying attention? Is anybody paying attention to what is going on here? Over the next 10 years, $2.5 trillion of Social Security money is going to be taken to pay for other things. We are headed for a train wreck. The President says: Don't worry. We are going to cut the deficit in half over the next 5 years. Our problem is not a 5-year problem. In fact, that is the sweet spot of the budget cycle. That is the sweet spot because that is before the baby boomers have retired. In addition, the only way the President gets to his claim of reducing the deficit, over 5 years, in half is he just leaves out things. He left out war costs past September 30 of this year. That is $300 billion, according to the Congressional Budget Office. He left out the cost of fixing the alternative minimum tax. That costs $700 billion to fix. There is not a dime of it in his budget. When you add back the things he left out, here is the picture we see emerging, and this is just the deficit calculation. The debt calculation, as I have described previously, is far worse. We are going into a circumstance in which the next 5 years--these are the good times; it is before baby boomers retire--we are headed for an extraordinarily serious set of circumstances if the budget plan of the President is maintained. Why? Because many of the proposals he has explode in cost right beyond the 5-year budget window. For example, the cost of his tax cuts absolutely explode right beyond the 5-year budget window. So does the cost of dealing with the alternative minimum tax. It explodes beyond the 5-year budget window. We have had a lot of talk on the floor of the Senate about this being a deficit reduction package. No, it is not. This is not a deficit reduction package, this reconciliation package. This reconciliation package has three parts: spending changes that save $35 billion over 5 years, these additional tax cuts that cost $60 billion over 5 years--so you put the two together, that adds to the deficit; it does not reduce the deficit--and the third chapter is the chapter they do not want you to read in this book because the third chapter is to increase the debt of the country by $781 billion. It is all in one fell swoop. As we look ahead to the 5-year budget that has been adopted by our colleagues--not with my support; I voted against it--but this is what is going to happen to the debt of the country over the next 5 years under this plan. By the way, these are not my numbers. These are their numbers. These are the numbers in their budget documents about what happens to the debt--not the deficits, the debt. It is something the news media--it is interesting, the news galleries are absolutely empty. Oh, no, there is one lone soul there--one lone soul. The news media does not want to report on this. Why don't they want to report on it? Because it is a little bit complicated. You actually have to read. You actually have to do a little studying. It is not like covering the latest scandal. They love to cover scandal because that is easy to write about. Budget stories and what is happening to the fiscal condition of the country, that is much more difficult because you actually have to get your numbers right. No one is paying attention. I have not seen a single national story on the growth of the debt. They are writing about the deficits because that is what they have written about for 20 years. They don't get the whole thing has changed dramatically since the 1980s because of how the policy of our Government has changed to raiding the Social Security trust funds for every dollar that is in them for the next 10 years. But do you know what? It does not matter they do not write the story. It does not matter because the reality is coming in on us, and it is coming in on us much sooner than people understand because what really affects the strength of America, the fiscal strength of America, is the debt that is being built up, and the budget that has passed both Houses of Congress is going to increase the debt. It started at $7.9 trillion this year. It is going to go up to $8.6 trillion, then to $9.2 trillion, then to $9.9 trillion, then to $10.6 trillion, then to $11.3 trillion over the 5 years of this budget. Again, these are not my numbers. These are not my numbers. These are the numbers in their own budget documents about their prediction about what will happen to the debt with the budget that has been adopted. The debt is exploding before the baby boomers retire. What are the implications? Well, here is one of them. Foreign holdings of our debt have doubled in the last 5 years. It took 42 Presidents, pictured here, 224 years to run up $1 trillion of external debt. This President has exceeded them all. He was able to double foreign holdings of our debt in just 5 years. It took 42 Presidents 224 years to run up $1 trillion of external debt. This President has added more than $1 trillion of external debt in 5 years. To whom do we owe the debt? Well, here is the latest scorecard. We owe Japan $687 billion. We owe China $252 billion. We owe the United Kingdom $182 billion. And my favorite, the Caribbean banking centers, we owe over $100 billion. We owe South Korea over $60 billion. I submit to my colleagues, that does not make America stronger. That makes America weaker. So now we turn to the legislation before us. One would expect that the Congress would be about reducing the deficit, reducing the debt, in light of what has happened. In light of the fact that the debt during this Presidency has gone up $3 trillion already, in light of the fact that under the 5-year budget before us, the debt is going to go up another $3 trillion over the next 5 years, you would think we would be here trying to reduce the explosion of debt. Surprise, surprise. No. This reconciliation process, a fast-track process that was devised to circumvent the rules of the Senate, was put in place to reduce deficits. That is the whole purpose of reconciliation. But it has been hijacked, and now it is being used not to reduce deficits but to expand them. I tell you, I go home some nights and I pinch myself thinking I am caught up in some surreal comedy. This has to be a comedy: The debt is exploding before the baby boomers retire, and in the Congress, the reconciliation process that was adopted to reduce deficits has been hijacked and is being used to increase deficits. What is wrong with this picture? I submit what is wrong with this picture is, it is utterly and completely disconnected from reality. Now we have before us a bill that is going to cut taxes over the next 5 years by $60 billion. It is going to make the deficit worse by $60 billion. This is what Chairman Greenspan has said about the notion of cutting taxes by borrowing. Federal Reserve Chairman Greenspan opposes deficit- financed tax cuts. He said: [W]e should not be cutting taxes by borrowing. He is right. That is what we are doing. We are borrowing every dime of this, borrowing it from Japan, China, Caribbean banking centers. Here is the effect of the reconciliation package, $35 billion of spending savings over 5 years, completely and totally wiped out by $60 billion of tax cuts not paid for. The net result is to increase the deficit, to increase the debt by $25 billion, but that is right in line with the fiscal policies that have been adopted by this President and by this Republican majority, because this is their record. This is where they took over. The debt limit had not been increased for 5 years in this country. In 2002, in one year, they increased it by $450 billion. In 2003, they increased it by $984 billion. In 2004, they increased it by $800 billion. Now, with this reconciliation proposal, they want to increase the debt by $781 billion. Add it all up, and this President will have increased the debt in these 5 years by $3 trillion. Over the next 5 years, according to their own estimates, they are going to increase the debt another $3 trillion. That is real money. The Chairman of the Federal Reserve has said this: All I'm saying is that my general view is I like to see the tax burden as low as possible. Don't we all. I would like nothing better than to have my tax burden reduced. 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 PAYGO resolution. What is pay-go? Pay-go says you can have more tax cuts, but you have to pay for them. You can have more spending, but you have to pay for it. Because if you don't, you add to the debt and deficit burden. That brings me to the amendment that I send to the desk at this time.

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

Mr. CONRAD

Mr. CONRAD. Mr. President, it is an honor for me to introduce the Stolen Valor Act of 2005. This legislation will honor the brave veterans of our Nation who have been awarded valorous medals for their service to our Nation. It is only appropriate that this bill be introduced today, the day before our country remembers all servicemen and women--past and present--who have served America in uniform. Recipients of the Medal of Honor, Distinguished Service Awards, Silver Star, or Purple Heart have made incredible sacrifices for our country. They deserve our thanks and respect. Unfortunately, however, there are some individuals who diminish the accomplishments of award recipients by using medals they have not earned. These imposters use fake medals--or claim to have medals that they have not earned--to gain credibility in their communities. These fraudulent acts can often lead to the perpetration of very serious crimes. Currently, Federal law enforcement officials are only able to prosecute those who wear counterfeit medals. The statute does not apply to individuals who claim to be award recipients either verbally or in writing, or to those who display fake medals in their offices or homes. My legislation will allow law enforcement officials to prosecute those who falsely claim, either verbally or in writing, to be medal recipients. It calls for a six-month jail sentence and a fine for improper use of most medals, and includes a maximum sentence of one year for perpetrators who claim to have earned the Medal of Honor, Distinguished Service Awards, Silver Star, or Purple Heart. The Military Order of the Purple Heart, the VFW, and the FBI Agents Association have endorsed this legislation because of the capabilities it will provide law enforcement officials to prosecute these fraudulent acts. It is my hope that this legislation will serve to honor the courageous heroes who have rightfully earned these awards. We must never allow their service and sacrifice to be cheapened by those who wish to exploit these honors for personal gain.

Mr. CONRAD

Mr. CONRAD. Mr. President, it is an honor for me to introduce the Stolen Valor Act of 2005. This legislation will honor the brave veterans of our Nation who have been awarded valorous medals for their service to our Nation. It is only appropriate that this bill be introduced today, the day before our country remembers all servicemen and women--past and present--who have served America in uniform. Recipients of the Medal of Honor, Distinguished Service Awards, Silver Star, or Purple Heart have made incredible sacrifices for our country. They deserve our thanks and respect. Unfortunately, however, there are some individuals who diminish the accomplishments of award recipients by using medals they have not earned. These imposters use fake medals--or claim to have medals that they have not earned--to gain credibility in their communities. These fraudulent acts can often lead to the perpetration of very serious crimes. Currently, Federal law enforcement officials are only able to prosecute those who wear counterfeit medals. The statute does not apply to individuals who claim to be award recipients either verbally or in writing, or to those who display fake medals in their offices or homes. My legislation will allow law enforcement officials to prosecute those who falsely claim, either verbally or in writing, to be medal recipients. It calls for a six-month jail sentence and a fine for improper use of most medals, and includes a maximum sentence of one year for perpetrators who claim to have earned the Medal of Honor, Distinguished Service Awards, Silver Star, or Purple Heart. The Military Order of the Purple Heart, the VFW, and the FBI Agents Association have endorsed this legislation because of the capabilities it will provide law enforcement officials to prosecute these fraudulent acts. It is my hope that this legislation will serve to honor the courageous heroes who have rightfully earned these awards. We must never allow their service and sacrifice to be cheapened by those who wish to exploit these honors for personal gain.

Mr. CONRAD

Mr. CONRAD. Mr. President, might I speak for a moment? Mr. President, I wish to say, before Senator McCain and Senator Bunning leave the floor, I think my colleagues know I must recuse myself from all matters on baseball because my wife represents Major League Baseball. But as a personal matter, I wish to thank Senator McCain and Senator Bunning for their moral leadership. It is a scourge not only for professional sports but for amateur sports because, increasingly, those who are competing on an amateur level believe they have to use steroids to compete. That is a tragedy. We are seeing usage of steroids at 20 to 40 percent in high school athletes because they read the stories, and they see what others are doing who have been at the very highest levels. So I wish to give my profound thanks to Senator McCain and Senator Bunning. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, first of all, I thank the staffs, the very professional staffs on both sides. I especially thank the chairman of the Budget Committee for his professionalism and his diligence in working on this bill. He has been such a pleasure to work with. His word is gold. I appreciate very much his staff, as well--Scott Gudes, Gail Millar, Jim Hearn, Cheri Reidy, and the rest of the majority staff. I want to also thank my staff--Mary Naylor, John Righter, my counsel Lisa Konwinski, Jim Esquea, Sarah Kuehl, Mike Jones, Cliff Isenberg, Jim Miller, Kobye Noel, Shelley Amdur, Steve Baily, Rock Cheung, Dana Halvorson, Tyler Haskell, Jim Klumpner, Jamie Morin, Stu Nagurka, Anne Page, Steve Posner, and David Vandivier. Mr. President, you can't judge a book by its cover. The language being used here is that this is a package of deficit reduction. But this is the first chapter. The first chapter reduces spending by $39 billion. But the next chapter will reduce taxes by $70 billion. The third chapter will increase the debt by $781 billion. You have to read the whole book to know the conclusion. The conclusion of their book is more deficits and more debt. No one should believe this vote is about deficit reduction while insisting on another $70 billion of tax cuts as part of this package. In the second chapter of the book, the deficit actually goes up. The majority's proposal to increase the debt limit by $781 billion, which is the third chapter of their book. With passage of this, the debt of this country will have increased by $3 trillion during just this President's administration. This package represents a continuation of the failed fiscal policies of this administration. We can do better as a nation, and we can do much better--and we must. This budget, if approved, will increase the debt of this country over the next 5 years by another $3 trillion. These policies are driving us deeper and deeper into debt to foreign nations. In just the 4 years or 5 years of this administration, we have seen the debt of the country multiplied by $3 trillion. I urge my colleagues to say no. Let us not continue any further down this course of deficits and debt.

Mr. CONRAD. Mr. President, I call up amendment 2422.

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

Mr. CONRAD. Mr. President, in the interest of time, very briefly, this is to help rural remote pharmacies with modestly enhanced reimbursement. I very much thank my colleagues on both sides of the aisle who have agreed to support this amendment. I especially thank the chairman of the Finance Committee for his support.

Mr. CONRAD. Mr. President, reserving the right to object, the last one is a Cornyn amendment?

Mr. CONRAD. I think we can accept it.

Mr. CONRAD. Mr. President, I ask unanimous consent to be listed as a cosponsor of the amendment.

Mr. CONRAD. Reserving the right to object, we don't yet know what the Smith amendment is. Can we get that first?

Mr. CONRAD. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CONRAD. Mr. President, the Senator from Iowa set a very good example. We encourage other Senators to follow that example.

Mr. CONRAD. Mr. President, let us repeat the message loud and clear: These next three votes are going to be strict 10-minute votes. At the end of 10 minutes, the manager and I are going to call the vote. That is the only possible, conceivable way we can get done today.

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

Mr. CONRAD. Mr. President, just to update our colleagues, we now have 19 amendments still pending. On our current course, that is going to take at least 6\1/2\ hours. That would take us to 8:30. I ask colleagues, please, if you can withhold on your amendment, do so. If you have a chance to work out the amendment, please work hard and diligently to work it out. I urge colleagues, we have a drop-dead time at 6 o'clock tonight. We cannot go beyond that with business. We have less than 4 hours to go through 19 amendments. The only way this is going to happen is if colleagues will give up on some of their amendments. Otherwise, we are here tomorrow. Once we are here tomorrow, we all know what happens: we will be here a long time tomorrow. Amendment No. 2367

Mr. CONRAD. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CONRAD. The next amendment in order is the Baucus amendment.

Mr. CONRAD. Mr. President, colleagues, we now have a list of the number of amendments that have been filed and that are pending and that Senators have noticed to us they intend to insist to have a vote on. That is 25 in number. That would take 8 hours. We have to stop at 6 o'clock. There is no way we would complete business today if every one of our colleagues insists on a vote on their amendment. So I am asking on our side--I am asking, please--if you have an amendment filed that you really don't need a vote on or that you could possibly work out, let's work very hard in the next few hours to try to work it out. I would implore colleagues to not force a vote on every amendment they have filed. I thank the Chair.

Mr. CONRAD. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CONRAD. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 2417

Mr. CONRAD. The Chair objects.