Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise in support of the confirmation of Mr. Bernanke to continue as Chairman of the Federal Reserve. I do so, acknowledging that he contributed to the crisis, but also recognizing that without his strong leadership the crisis might have become a conflagration. How did we get to the brink of financial collapse? I might say to some of my colleagues, they should look in the mirror because they, too, contributed to the forming of the bubble. How? An overly loose fiscal policy under the control of the Congress and the administration. The previous administration ran up massive deficits, doubled the debt. That is a loose fiscal policy. It was accompanied by a loose monetary policy after 9/11. After 9/11, the Federal Reserve kept interest rates very low, flooded the system with money, and the combination of an overly loose fiscal policy and an overly loose monetary policy created the seed bed for bubbles to form. Indeed they did. We didn't just have a housing bubble, we had an energy bubble--oil prices went to $100 a barrel. We had a commodity bubble--wheat went to more than $20 a bushel. These are examples and evidence of bubbles being formed. When you have an overly loose monetary policy and an overly loose fiscal policy, bubbles are going to form and ultimately bubbles burst. When they do, there is enormous economic wreckage. That is what has occurred here--all of it coupled with an era of deregulation. Under the previous administration--and, yes, the Federal Reserve has responsibility here as well--there was too little regulation of major financial institutions and of major financial instruments. Trillions of dollars of derivative instruments were floating around the world unregulated, even unrecorded. Of course there was danger there. Warren Buffett warned that derivatives constituted a nuclear time bomb hanging over the global economy. Ultimately the bubbles burst, and ultimately the economic wreckage built. Bernanke bears some responsibility for that, without doubt. But once the crisis developed he took charge in a way that is unprecedented. He took step after step to provide liquidity to this global economy to prevent and avert a collapse. I believe when the history of this period is written, in terms of the response to the dangerous cloud hanging over this global economy, Bernanke will prove to have been one of the heroes of the piece. In instance after instance, he took unprecedented action to avert a collapse. His academic study was the Great Depression. He resolved as a young man to do everything he could to prevent any future collapse of that magnitude. He proved to be the right man at the right time. He deserves to be confirmed in this vote this afternoon. I ask my colleagues to please be judicious. Let's recognize that he made serious mistakes. Let's also admit the Congress and the administration, the previous administration, made very serious mistakes: overly loose fiscal policy, overly loose monetary policy, a lack of regulation, the creation of bubbles, bubbles that burst that created enormous wreckage. But Ben Bernanke helped avert a global financial collapse. I believe history will prove that is the truth. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise to submit to the Senate the fourth budget scorekeeping report for the 2010 budget resolution. The report, which covers fiscal year 2010, was prepared by the Congressional Budget Office pursuant to section 308(b) and in aid of section 311 of the Congressional Budget Act of 1974, as amended. The report shows the effects of Congressional action through January 25, 2010, and includes the effects of legislation since I filed my last report for fiscal year 2010 on August 4, 2009. The new legislation includes: P.L. 111-47, an act making supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program; P.L. 111-68, an act making appropriations for the Legislative Branch for the fiscal year ending September 30, 2010, and for other purposes; P.L. 111-69, the Fiscal Year 2010 Federal Aviation Administration Extension Act; P.L. 111-80, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010; P.L. 111-83, the Department of Homeland Security Appropriations Act, 2010; P.L. 111-84, the National Defense Authorization Act for Fiscal Year 2010; P.L. 111-85, the Energy and Water Development and Related Agencies Appropriations Act, 2010; P.L. 111-88, the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010 and Further Continuing Appropriations, 2010; P.L. 111-92, the Worker, Homeownership, and Business Assistance Act of 2009; P.L. 111-96, an act to allow the funding for the interoperable emergency communications grant program established under the Digital Television Transition and Public Safety Act of 2005 to remain available until expended through fiscal year 2012, and for other purposes; P.L. 111-115, the No Social Security Benefits for Prisoners Act of 2009; P.L. 111-117, the Consolidated Appropriations Act, 2010; P.L. 111-118, the Department of Defense Appropriations Act, 2010; P.L. 111-124, an act to extend the Generalized System of Preferences and the Andean Trade Preference Act, and for other purposes; and P.L. 111-126, an act to accelerate the income tax benefits for charitable cash contributions for the relief of victims of the earthquake in Haiti. The estimates of budget authority, outlays, and revenues are consistent with the technical and economic assumptions of S. Con. Res. 13, the 2010 budget resolution. The estimates show that for fiscal year 2010 current level spending is $17.9 billion below the level provided for in the budget resolution for budget authority, while it is $5.6 billion above it for outlays. For revenues, current level shows that $18.6 billion in room remains relative to the budget resolution level. I ask unanimous consent that the letter and accompanying tables from CBO be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, today I wish honor the brave crews of electrical line workers who helped restore power to thousands of North Dakotans. Within the last week, severe weather hit the southwestern part of my State. These storms brought fierce winds, freezing rains, and eventually blizzard conditions. Ice coated miles of power lines, causing them to fail under the extra weight. Thousands of homes and businesses were left without electricity. Severe weather is nothing new to North Dakotans. But living in a home without electricity during the depths of winter is an alarming prospect. Thankfully, dedicated repair linemen immediately went to work. While I know these crews would tell me they are just doing their jobs, I think it is important to step back at a time like this and recognize the importance of their work. Repairing high-voltage power lines while battling subzero temperatures and strong prairie winds is a downright dangerous job. But these repair linemen work tirelessly in adverse conditions because they know their fellow North Dakotans depend on them. Many people in my State still do not have access to power, but I know North Dakotans have enormous confidence in the ability of the repair linemen to restore power in a swift manner. They have shown tremendous resolve throughout this situation, and I am proud to commend their efforts.

Mr. CONRAD

Mr. CONRAD. Madam President, I yield 5 minutes to the Senator from Colorado.

Mr. CONRAD. I thank the Senator from Colorado for his very powerful and persuasive remarks this morning. I hope colleagues are listening. This is a time that will define part of our economic future. This vote this morning will be a vote that will be recorded in history. Senator Begich is seeking time.

Mr. CONRAD. I yield 5 minutes to the Senator from Alaska, Senator Begich.

Mr. CONRAD. Madam President, I thank the Senator from Alaska, Mr. Begich, for his strong statement. I also thank him for his attention to the deficit and debt. In meeting after meeting, the Senator from Alaska has been one of the leaders, along with Senator Bennet of Colorado and Senator Udall of Colorado. Over and over, they have emphasized the need to our colleagues to face up to the debt threat. I very much appreciate their leadership.

Mr. CONRAD. Madam President, I thank the Senator from Colorado, Mr. Udall. Over and over, he has emphasized the need for fiscal responsibility in dealing with the long-term debt. I very much appreciate his words this morning.

Mr. CONRAD. I thank the Senator from New Hampshire and the Chair. Mr. President, this debate is about the economic future of the country. This is the headline in Newsweek magazine from December 7, 2009: ``How great powers fall. Steep debt, slow growth, and high spending kill empires--and America could be next.'' If you go to the inside of the story, it reads: This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy and Air Force. . . . If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that the debt crisis could lead to a major weakening of American power. That is what this debate is about. We are on a course that is totally unsustainable. We are headed for a debt of 400 percent of the gross domestic product in 50 years. That is the estimate of the Congressional Budget Office and others who have looked at it, including the Government Accountability Office and the Office of Management and Budget. All of them have warned that we are on an utterly unsustainable course. The National Journal, in an article on November 7 last year, said: The debt problem is worse than you think. In the article, they said: Simply put, even alarmists may be underestimating the size of the (debt) problem, how quickly it will become unbearable, and how poorly prepared our political system is to deal with it. Senator Gregg and I, after several years of effort and consultation with our colleagues, have come up with a proposal we will be voting on in just minutes. It provides that all task force members are directly accountable to the American people. There are 18 members of the task force--16 Members of Congress evenly divided between Democrats and Republicans and 2 representatives of the administration, with the Secretary of the Treasury being specifically named. For those who have asserted that this is an outsourcing of our responsibility, no, this is an outsourcing to ourselves. Sixteen of the 18 members of the commission are Members of Congress. Two are representatives of the administration. It is currently-serving Members of Congress selected by the Democratic and Republican leaders, with the Treasury Secretary and one other official representing the administration. These are people who are accountable to the American people. This is not an abdication of responsibility; this is an acceptance of responsibility, an acknowledgment that what we have been doing has not worked. What could be more clear? The record is there for everyone to see--a doubling of the debt in the previous administration, a scheduled doubling of the debt in the current administration if we fail to act. The fiscal task force we have proposed has everything on the table, spending and revenues. The proposal we have made provides for an expedited process, with recommendations to be received after the 2010 election, with fast-track consideration in the Senate and the House. It is true, we have a proposal that does not permit amendments. Why? Because all of us know the game that is played. If we permit amendments, there will be a Democratic amendment and there will be a Republican amendment. There will be a dozen other amendments that will suggest they have a way of doing what needs to be done, and that will then permit them to actually vote against the final resolution. That is what has happened year after year, as the debt has mounted and mounted. What we are proposing leaves no place to hide. Let's give 18 Members and representatives of the administration the responsibility to come up with a plan, and then let's vote on the plan, with the final vote before the 111th Congress adjourns. Every Member of this Senate will have a chance to vote. When they say this is outsourcing, it is outsourcing to Members of Congress and the administration to come up with a plan. There is no outsourcing of the vote. The vote is going to occur right here and in the House.

Mr. CONRAD. In addition, we have done everything we can, Senator Gregg and I, to ensure a bipartisan outcome. Fourteen of the 18 task force members must agree to the recommendations. Final passage requires supermajorities in both the House and Senate. The President still retains his veto power. Make no mistake, Congress makes this decision and the President must agree. The President has issued this weekend a very strong endorsement of the proposal. He said: That's why I strongly support legislation currently under consideration to create a bipartisan, fiscal commission to come up with a set of solutions to tackle our nation's fiscal challenges. The American people support this effort. In a recent poll by Peter Hart, 70 percent favor the creation of a bipartisan commission. On the question of what is included, we have said everything should be included. Why? Look at where we are. The red line is the spending line. Spending as a share of our national income is the highest it has been since 1950. Spending is the highest it has been in 60 years, and revenue is the lowest it has been in 60 years. Of course, the task force has to look at both. The assertion has been made that the task force would put the bull's- eye on Social Security and Medicare. We have just learned from the Congressional Budget Office that Social Security is cash-negative today, and the report just released 1 hour ago by the CBO says that Social Security is going to be cash-negative every year but two until 2016 and then it is going to be permanently cash-negative. Those who want to defend Social Security are going to have to change Social Security because Social Security is headed for insolvency. The same is true of Medicare. Medicare is cash-negative today. The trustees tell us it will be bankrupt in 2017, 7 years from today. Let me conclude by saying that over and over we have heard people come to the floor and say: We know we have a problem. How do we deal with it? I suggest to my colleagues, trying what we have been doing is a proven failure. It is time for something different. It is time for an attempt that brings both sides together, Republicans and Democrats, with an assurance that the recommendations of the commission come to a vote to face up to this debt threat. Make no mistake, this country confronts one of the greatest economic challenges in our Nation's history. The question before us today is, Do we have the courage to stand up to it? I know groups on the right and the left are right now calling our colleagues asking them to vote no. Groups on the right are saying: Well, this could lead to more revenue. Groups on the left are saying: This could lead to reductions in entitlement programs. Everything must be on the table. America must take charge of its economic destiny. Now is the time. Now is the opportunity. This is a bipartisan proposal to take the debt threat on in a bipartisan way. I urge my colleagues' support.

Mr. CONRAD. Mr. President, I have no problem with the amendment offered by Senator Baucus. Basically, what it does is creates another 60-vote hurdle to any work the commission would do, and this underlying proposal requires 60 votes. So I do not see the Baucus amendment as a problem for the vote that will follow. So I would say to Members, Senator Baucus has made a strong argument for his amendment and to have another 60-vote hurdle does not change what would be required to get a commission recommendation because we would require 60 votes. The far larger question is whether we have an alternative approach to what we are currently doing. What we are currently doing I do not think is poised to deal with the challenge of the debt threat confronting the United States. I do not think it is possible for it to cope effectively with what we confront. Is the Senator from Minnesota seeking time?

Mr. CONRAD. I do not see that the Baucus amendment does fundamental damage to the amendment that follows, and to put up another 60-vote hurdle to protect Social Security is not an unreasonable request by the Senator from Montana, the chairman of the Finance Committee. On the second vote, I think it is absolutely critical we continue the momentum that has been building to sending a message to the American people and the markets all across the world that the United States is prepared to stand and deal with this debt threat.

Mr. CONRAD. Mr. President, how much time do I have?

Mr. CONRAD. How much time does Senator Baucus and Senator Gregg retain?

Mr. CONRAD. All right.

Mr. CONRAD. Mr. President, would the Senator like me to yield half my time to him?

Mr. CONRAD. I thank the Senator. Let me go back to where I began. What is this about? This is fundamentally about the economic future of the United States. Newsweek magazine, cover story, December 7: ``How Great Powers Fall.'' ``Steep debt, slow growth, and high spending kill empires.'' Colleagues, is there any doubt we are on a collision course with economic reality? The Congressional Budget Office, 1\1/2\ hours ago, issued a new report saying the deficit for this year will be $1.350 trillion--$1.350 trillion--and, in coming years, staggering deficits for as far as the eye can see. The debt--which swelled to more than double its 2001 level during the previous administration's 8 years--the debt is expected to rise by a similar magnitude over the next 5 years and then again in 10 years. There is, to me, no question that doing things the same old way that has led to this crisis is unlikely to lead to a different result. Senator Gregg and I have a special responsibility to our colleagues with respect to the budget. The budget process--if you look at it--we have done 35 budgets since the Budget Act; 29 of the 35 have been for budgets of 5 years or less. This is not a 5-year issue; this is a long- term issue. In the short term, we have had to take on more deficits and debt to prevent a global economic collapse. But now we must pivot and put in place a long-term plan to deal with the crisis confronting this Nation. That crisis is a debt threat of unprecedented proportion. Never before in American history have we faced the prospect of a debt that would reach 400 percent of the gross domestic product of the country; increasingly, that debt is financed by borrowing from abroad. Last year, a substantial portion of the debt was financed by foreign entities. This is the time. This is the moment. This is the chance for us to put in place a process to deal with the debt. I urge my colleagues to support it. I yield the floor.

Mr. CONRAD. Mr. President, how much time is available?

Mr. CONRAD. Mr. President, I will take 30 seconds. I believe this is a defining moment for this Chamber and for this Congress. The question before the body is will we adopt a special process to face up to the debt threat looming over this Nation. We are headed, I say to my colleagues, for a debt 400 percent of the gross domestic product of this country. Senator Gregg and I have proposed, in a bipartisan way, with bipartisan cosponsorship, a plan to look at spending and revenues. The revenues are the lowest they have been in 60 years. The spending is the highest it has been in 60 years. It is time for us to take on this challenge, to do it together, to strengthen our Nation. I urge our colleagues to vote aye.

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

Mr. CONRAD

Mr. CONRAD. Mr. President, tomorrow we are going to vote on the question of whether we establish a bipartisan debt commission, a commission empowered to come up with a plan, a plan if 14 of the 18 Members would agree, would come to the Senate for a vote. This story ran recently in Newsweek. This was actually the cover of Newsweek: How Great Powers Fall; Steep Debt, Slow Growth, and High Spending Kill Empires--And America Could Be Next. Inside, the story reported: This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy and Air Force. . . . If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power. It is not hard to see how that could happen. Since 2000, the debt has exploded. In the previous administration the debt doubled. It has increased again with the economic downturn, and we are now on a course to have a gross debt that will be 114 percent of the gross domestic product of the United States. That is the short term. We can handle a debt of 114 percent of the gross domestic product. We have done it before. We did it after World War II. Japan has a debt right now of 189 percent of their gross domestic product. The real challenge confronting America is that, according to the Congressional Budget Office, we are on course to have a debt that will reach 400 percent of our gross domestic product over the next 50 years. Nobody believes that is a sustainable situation--not the head of the Congressional Budget Office, not the head of the Office of Management and Budget, not the former head of the General Accounting Office, not the head of the Federal Reserve, not the Secretary of Treasury--all of them have said a debt of that magnitude poses a systemic threat to the economic security of the United States. The National Journal, in a recent article, on November 7, 2009, reported this: Simply put, even alarmists may be underestimating the size of the (debt) problem, how quickly it will become unbearable, and how poorly prepared our political system is to deal with it. That is not just the view of the National Journal or the view of Newsweek magazine in their cover story piece. This is the considered judgment of some of the budget experts in the country from both the Republican and Democratic side of the aisle. Alan Greenspan, the former Federal Reserve Chairman, said: The recommendation of Senators Conrad and Gregg for a bipartisan fiscal task force is an excellent idea. . . . I hope that you succeed. Douglas Holtz-Eakin, who was the key economic adviser to Senator McCain in the last election said: I am a reluctant convert. I have always felt that this is Congress' job, and, quite frankly, it ought to just do it. And that attitude has earned me no friends and has gotten us no action. So I've come around to the point where I'm in favor of something that is a special legislative procedure to get this legislation in front of Congress and passed. Mr. Geithner, the current Secretary of Treasury, said this before the Senate Budget Committee on February 11 of last year: . . . [I]t is going to require a different approach if we're going to solve the [long-term fiscal imbalance]. . . . It's going to require a fundamental change in approach, because I don't see realistically how we're going to get there through the existing mechanisms. Mr. Walker, the former head of the General Accounting Office, said: I think the regular order is dysfunctional as it relates to these types of issues. And it's, quite frankly, understandable, because you're talking about putting together a package that crosses many different jurisdictions. . . . And the idea that that would end up emerging from the regular order I think is just totally unrealistic. Leon Panetta, former chairman of the House Budget Committee, former Chief of Staff of President Clinton, said: It'll never happen. The committees of jurisdiction will never take on the kind of challenges that are involved in this kind of effort. . . . If you just leave them under their own jurisdictions, that will never happen. Senator Gregg, the ranking Republican on the committee, and I came to the same conclusion. Two years ago we started an effort to come up with a process that could assure a vote on a series of recommendations to meet the debt threat. All task force members are directly accountable to the American people. They are all elected Members of the Congress or, in the case of the Secretary of the Treasury, the representative of the administration. There are 18 Members: 10 Democrats--2 from the administration--and 8 Republicans. They are all currently serving Members of Congress selected by Democratic and Republican leaders and the Treasury Secretary and one other administration official who, I assume, would be the head of the Office of Management and Budget. The bipartisan fiscal task force has broad coverage. Everything is on the table--spending and revenues. I hear some on the left saying spending should not be considered and some on the right saying revenues should not be considered. Both have to be considered. I do not know what could be more clear. The green line shows revenues as a share of GDP since 1950. That is over the last 60 years. Revenue, the last 2 years, is the lowest it has been in 60 years. Let me repeat that: Revenue as a share of the gross domestic product is the lowest it has been in 60 years--a precipitous decline in revenue. Look at expenditures. Expenditures are the highest they have been as a share of the gross domestic product in 60 years. Whoever says: ``Well, you did not include revenue'' or ``you did not include spending,'' well, guess what, if you did not deal with spending and did not deal with revenue, you did not deal with the problem. Let's get serious. Let's get honest with the American people. The current status of Social Security and Medicare trust funds are as follows: Social Security will be permanently cash negative in 2016. It is already cash negative today. Let me repeat that. Social Security is cash negative today. It will be permanently cash negative in 2016. That is 6 years away. It will be completely insolvent in 2037. Medicare went cash negative in 2008. It will be insolvent, according to the trustees, in 8 years. Anybody who says we do not have to do anything, we can just keep on doing what we are doing, has their head in the sand. Social Security and Medicare are both cash negative today. They are both headed for insolvency. Those who say we do not have to do anything, they are guaranteeing a disaster. Some say: Well, the health care reform bill shows we can do this through the regular order. No, that is not what it showed. It shows the opposite. It shows we will not do this through the regular order because here is the long-term debt trajectory we are on. While the bill that passed the Senate will help a little bit, it is only a little bit. It does not fundamentally change the trajectory we are on. That is the reality. That is the fact. A bipartisan fiscal task force promises an expedited process, with recommendations to be submitted after the 2010 election, with fast- track consideration in the Senate and the House, no amendments, with a final vote before the 111th Congress adjourns and a requirement, before you ever get to that point, of a supermajority necessary of the 18 members to even report a plan. It would require 14 of the 18 members to even report a plan. If the plan is reported, then it takes 60 votes in the Senate, it takes 60 percent of the House of Representatives, and the President reserves and preserves his ability to veto. So anybody who says this is somehow unconstitutional, it is fully constitutional. Anybody who says we are farming out the responsibility to come up with a plan, that is what we always do. We always have committees come up with plans that then come to a vote of the Congress. If you look at fiscal crises, such as the one we are in today and the one that is rapidly approaching that will be far more serious than the one we are in today, we have always had a special process, whether it was Andrews Air Force Base in the 1990s or whether it was the Greenspan Commission in the 1980s. We have repeatedly, when we faced a fiscal crisis, resorted to a special procedure. The Bipartisan Fiscal Task Force, as I have indicated, requires a bipartisan outcome: 14 of the 18 task force members must agree to the recommendations. The final passage requires supermajorities in both the Senate and the House. This weekend, the President endorsed this, the plan we will vote on tomorrow. This weekend, the President released this statement. The serious fiscal situation that our country faces reflects not only the severe economic downturn we inherited, but also years of failing to pay for new policies, including a new entitlement program and large tax cuts that most benefited the well-off and well-connected. The result was that the surpluses projected at the beginning of the last administration were transformed into trillions of dollars in deficits that threaten future job creation and economic growth. These deficits did not happen overnight and they won't be solved overnight. We not only need to change how we pay for policies, but we also need to change how Washington works. The only way to solve our long-term fiscal challenge is to solve it together, Democrats and Republicans. That's why I [the President] strongly support legislation currently under consideration to create a bipartisan, fiscal commission to come up with a set of solutions to tackle our nation's fiscal challenges, and call on Senators from both parties to vote for the creation of a statutory, bipartisan fiscal commission. With tough choices made together, a commitment to pay for what we spend, and responsible stewardship of our economy, we will be able to lay the foundation for sustainable job creation and economic growth while restoring fiscal sustainability to our nation. The President got it right. He is also representing the views of the American people. When asked: Would you favor or oppose creating a bipartisan commission as a way of reviewing and addressing our Federal budget problems, 70 percent of the American people said they would. Twenty-five percent were in opposition. Five percent were not certain. This is a poll taken by Peter D. Hart Research, a well-known pollster, a well-regarded pollster, taken November 16 to November 18 of 2009. There is no doubt in my mind that if this poll were taken today, these numbers would be even stronger with respect to the need for a bipartisan fiscal commission. Let me close, in the time remaining to me, to thank my colleague, Senator Gregg, the ranking Republican on the committee. We have a group of cosponsors for this bill, about 30 in number, about equally divided between Republicans and Democrats. Senator Gregg and I have not always agreed on every fiscal issue, and we have debated those issues sometimes in a way that is animated, full of energy. But this is one place we are in absolute agreement. I have served here now 23 years. I am absolutely persuaded that if we do not adopt a special procedure such as the one we have proposed, the chances of facing up to this debt threat in a timely way is remote. This is our chance. Tomorrow will be a defining vote. Are we going to take on this question of the looming debt, the threat it imposes to the economic security of the country? Let me be quick to say, that does not mean I believe we should raise taxes or cut spending in the midst of an economic downturn. That would be unwise. But it would also be unwise, once recovery has presented itself and is firmly rooted, for us to fail to face up to the greatest economic threat this country faces, a runaway debt, one increasingly financed from abroad. Last year, a substantial portion of our new debt was financed by foreign entities: China, Japan, the oil-exporting nations. They have told us, publicly and privately, we are on an unsustainable course and they will not long continue to extend trillions of dollars of credit to us, absent our taking action. The warning is clear. The time is now. I urge my colleagues to support our effort tomorrow. I wish to, again, thank my colleague, Senator Gregg, the ranking Republican on the committee, for his leadership in this matter. He has spent 2 years on this effort. We could not have a better partner. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, pursuant to section 301(a) of S. Con. Res. 13, I previously filed revisions to S. Con. Res. 13, the 2010 budget resolution. Those revisions were made for the Patient Protection and Affordable Care Act, an amendment in the nature of a substitute to H.R. 3590, as well as for two amendments to that substitute. The Senate passed H.R. 3590 on December 24, 2009. To preserve the adjustment for legislation transforming and modernizing America's health care system, I am further revising the 2010 budget resolution and reversing the adjustments previously made pursuant to section 301(a) to the budgetary aggregates and the allocation provided to the Senate Finance Committee. Assuming it meets the conditions of the deficit-neutral reserve fund specified in section 301(a), I will again adjust the aggregates and the Senate Finance Committee's allocation for final health care legislation. I ask unanimous consent that the following revisions to S. Con. Res. 13 be printed in the Record.

Mr. CONRAD

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

Mr. CONRAD. Mr. President, I have come to the floor to discuss an amendment I am offering with Senator Gregg to create a bipartisan fiscal task force. The task force would be designed to develop a bipartisan legislative package to address the Nation's long-term fiscal imbalances. There would be a requirement that the package come before Congress for a vote. Under the rules of the Senate, our amendment requires 60 votes to pass. If we do not reach the 60-vote threshold, I will continue to push for the creation of a special process to deal with our debt, and I will fight to ensure any special process results in legislation that will get a vote in the Senate and in the House. We cannot afford another commission whose recommendations sit on a dusty shelf somewhere at the Library of Congress. I believe our country is at a critical juncture. We have seen in the previous administration the debt of the United States double. We are on course over the next 8 years for at least another doubling of the debt. And already we are reaching precarious levels, record levels--record levels that have never been seen before in this country. I believe nothing short of the economic future of the country is at stake. I point to this recent Newsweek cover from December 7 of last year entitled ``How Great Powers Fall; Steep Debt, Slow Growth, and High Spending Kill Empires--and America Could Be Next.'' Here is what the article went on to say: This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. . . . If the United States doesn't come up soon with a credible plan to restore the Federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power. The process has already begun. As I indicated, in the previous administration the debt doubled. Foreign holdings of U.S. debt more than doubled. We can see the track we are on. From 2001, at the beginning of the Bush administration, the debt skyrocketed, and it continues to grow with the economic downturn and the projections from the Congressional Budget Office for the future. In fact, we now estimate that the gross debt of the United States could reach 114 percent of the gross domestic product of the United States. That has only been equaled in U.S. history after World War II. At that point, the debt came down very rapidly. There is no forecast that shows this debt coming down and certainly no projection and no forecast that it will come down rapidly. Instead, what we have is a forecast by the Congressional Budget Office that the debt will continue to explode. Instead of being 100 percent of the gross domestic product of the United States, the debt will rise to a level of more than 400 percent of the gross domestic product of the United States. By any account, that is an unsustainable course. We have had before the Budget Committee the testimony of the head of the Congressional Budget Office saying the course we are on is clearly unsustainable. We have had the testimony of the head of the General Accounting Office saying the current course is clearly unsustainable. We have had the testimony of the Secretary of the Treasury, both in the previous administration and this one, saying this trajectory is clearly unsustainable, and we have had the testimony, clear and compelling, by the Chairman of the Federal Reserve that this course is absolutely unsustainable. I have said to my colleagues repeatedly that the debt is the threat. It is something we must face up to. We have been through a very sharp economic downturn. In the midst of a sharp economic downturn, you do not raise taxes or cut spending. That would only deepen the recession. In fact, we could have seen this country plunge into a complete collapse, and we would not have been alone. I think many of us believe we just narrowly averted a global financial collapse. One reason it was averted is because of actions by this administration and the previous administration and this Congress--steps that were taken to provide liquidity to prevent a global collapse. But those steps also added to the deficit and debt. We have to acknowledge that. We have to be very straight with people that those steps were necessary to avert a collapse, but they also contribute to the long-term crisis we confront--a crisis of a debt growing too rapidly and forecasts to reach a level unprecedented in our national history, a debt level that could threaten the economic security of the United States. Many people have asked me: How does this threaten the economic security of the country? Very simply, this debt is increasingly financed from abroad. In fact, last year 68 percent of the new debt created by the United States was financed by foreign entities--68 percent. China has now become our biggest creditor. They have signaled publicly and privately that they are increasingly concerned with the fiscal policy of the United States. They are increasingly concerned about the security of their loans to the United States. Other countries have expressed concern as well. If those countries decided they would no longer extend loans to the United States, we would then be very quickly in a serious situation. It would mean we would have to either cut spending sharply or raise taxes dramatically or raise interest rates in a significant way to attract new borrowing, new lenders. The consequences of a failure to address these issues goes right to the heart of the economic strength of the country. As I said, in the article in Newsweek, they say: If the United States doesn't come up soon with a credible plan to restore the Federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power. For those who believe there is no crisis and we can just stay with the status quo, this is a quote from the National Journal cover story in November. The article was titled ``The Debt Problem Is Worse Than You Think.'' It stated: Simply put, even alarmists may be underestimating the size of the [debt] problem, how quickly it will become unbearable, and how poorly prepared our political system is to deal with it. I believe the National Journal got it about right. We are on a course that is clearly unsustainable. Virtually every expert says to us that this is so. The consequences of a failure to deal with the debt are enormous. They could go right to the heart of the economic strength of the country. So Senator Gregg and I have come to the floor with a proposal to have everything on the table, to have a bipartisan commission evaluate various options for dealing with our long-term debt threat and to come back with a proposal. But they can only come back if 14 of the 18 members of that commission agree on a future course, a supermajority, a bipartisan majority. If 14 of the 18 agree, that plan comes to Congress for a vote. Members here will decide. This is not outsourcing the responsibility. This is giving an independent commission the responsibility to come up with a plan, but that plan would have to be voted on by Members of the Senate, Members of the House, and under our formulation it would require a supermajority in both Chambers to pass. Of course, the President would retain his veto powers. He would be able to veto any proposal passed by the Senate and the House. I believe the prerogatives of the Senate and the House are preserved. It will require a vote of supermajority here and in the House and, of course, signature by the President. The former Chairman of the Federal Reserve has talked about the urgent need to address the long-term debt situation. This is what he said on December 17 of last year in testimony before the Homeland Security and Governmental Affairs Committee: The challenge to contain this threat is more urgent than at any time in our history. . . . . [Our] nation has never before had to confront so formidable a fiscal crisis as is now visible just over the horizon. I believe the former Chairman of the Federal Reserve has it right. We face an unprecedented threat. Never before in our Nation's history have we looked forward and seen the prospect, if we continue current policies, of a debt that would equal 400 percent of the gross domestic product of the United States. That has never, ever faced this country. That is a threat with which we are unfamiliar. The response Senator Gregg and I have crafted over 2 years of debate and discussion with many of our colleagues is one that is based on the principle of accountability. All of the task force members would be directly accountable to the American people. There would be 18 members--10 Democrats, 2 from the administration, and 8 Republicans. So in terms of Members of Congress, it would be even: 8 Democrats, 8 Republicans. They would have to be currently serving Members of Congress selected by the Democratic and Republican leaders. The Secretary of the Treasury and one other administration official would serve representing the administration, for a total of 18. The bipartisan fiscal task force would provide broad coverage. Everything would be on the table--entitlements, revenue, discretionary spending. Spending and revenues all would be before them for a judgment on how we deal with the debt threat. The work of the fiscal task force would enjoy expedited procedures-- procedures we have used before to bring especially difficult issues to both the Senate and the House. The recommendations would only be submitted after the 2010 election. There would be fast-track consideration of the proposal in the Senate and the House. There would be no amendments. It would be an up-or-down vote. The final vote would come before the end of the 111th Congress. Again, I wish to emphasize I am not proposing that we take action to raise revenue or cut spending in the midst of an economic downturn. That would be counterproductive. But we do need to face up to this long-term debt. The provisions that would come from any commission, I am sure, would be ones that would be put in place over time. They would be phased in. The Commission would be cognizant that our economy remains weak and, in fact, may require even additional debt in the short term. The bipartisan fiscal task force would ensure a bipartisan outcome. Fourteen of the eighteen task force members would have to agree to the recommendations for it to come to a vote, and final passage would require supermajorities--a three-fifths vote in both the Senate and the House. Also, the President must still sign off. As I indicated earlier, he would retain his full veto powers. This approach has been criticized by both the left and the right--the left, a group of organizations that have banded together to say this kind of approach could lead to reductions in Social Security and Medicare--cuts in Social Security and Medicare. I would simply say to them: Look at where we are. Look at where we are. Social Security and Medicare are both cash negative today. The trustees of Medicare say Medicare will go broke in 8 years. Social Security will take somewhat longer. But both are on a path to insolvency if we fail to act. It hasn't just been from the more liberal side of the spectrum that the criticism has come, but also on the right. The Wall Street Journal ran an editorial calling the debt reduction commission--or the deficit commission--a trap. They say it is a trap that will lead to higher taxes; to more revenue. So on the left and the right we have those complaining that if you move forward to deal with the debt, you are going to make reductions in programs and you are going to increase revenue. I think that is undeniably the case. If you are going to deal with this debt threat, we are going to have to make changes in the spending projections of the United States. We are going to have to make changes in the revenue base of the country. I would suggest to those who are concerned about tax increases, the first place to get more revenue is not with a tax increase. The first place to get more revenue is to collect what is actually owed. If you examine the revenue streams of the United States, it jumps out at you that we are collecting about 80 percent, or even somewhat less than that, of what is actually owed. If we were collecting the money that is actually owed under the current rates, we would be doing very well. But we have offshore tax havens, abusive tax shelters, a tax gap--the difference between what is owed and what is paid--and we also have a tax system that is completely out of date. We have a tax system that was designed at a time when we did not have to be worried about the competitive position of the United States. Now we do. The world has changed and our revenue system has not kept pace. Instead, it is hemorrhaging with offshore tax havens costing us, according to the Permanent Subcommittee on Investigations, over $100 billion a year in lost revenue. If anybody doubts the proliferation of offshore tax havens, I would urge them to Google offshore tax havens and see what you find. We did that last year and got over 1 million hits, including my favorite: live offshore tax free by putting your funds in offshore tax havens. The reality is this: We have a dramatic imbalance between spending and revenue. The revenue is the green line, the spending is the red line. Look what has happened with the economic downturn: Revenue is at its lowest point in 50 years as measured as a share of the economy. Revenue is less than 15 percent of the gross domestic product of the country. Spending has skyrocketed to 26 percent of the gross domestic product of the country. You can see that is far higher than it has been going back 30 years. Of course, we understand why, in the middle of a sharp economic downturn, the automatic stabilizers take effect--unemployment insurance, a whole series of other measures to try to prevent an even steeper downturn. So spending goes up, revenue goes down, the deficits widen, and the debt explodes. That would not be so troubling if the long-term trend didn't tell us the debt will continue to grow from these already high levels. The need for tax reform, I think, is clear: We have a tax system that is out of date and hurting U.S. competitiveness. As I mentioned, we are hemorrhaging revenue to tax havens and abusive tax shelters. The alternative minimum tax problem threatens millions of middle-class taxpayers--something that was never intended. That cries out for reform. These long-term imbalances must be addressed. Simplification and reform, we know from experience, can keep rates low and improve the efficiency of the system. The arguments I have advanced this morning are arguments that have now been endorsed by more and more budget experts as they look at the long-term threat to the country. Alan Greenspan, the former Chairman of the Federal Reserve, said this: The recommendation of Senators Conrad and Gregg for a bipartisan fiscal task force is an excellent idea. I hope that you succeed. Douglas Holtz-Eakin, who was the chief economic adviser to Senator McCain in his Presidential bid, said this in testimony before the Senate Budget Committee just last year: I am a reluctant convert. I have always felt that this is Congress' job, and, quite frankly, it ought to just do it. And that attitude has earned me no friends and has gotten us no action. So I have come around to the point where I'm in favor of something that is a special legislative procedure to get this legislation in front of Congress and passed. Mr. Geithner, the Secretary of the Treasury, said this in testimony before the Budget Committee last year: It is going to require a different approach if we're going to solve the long-term fiscal imbalance. It's going to require a fundamental change in approach, because I don't see realistically how we're going to get there through the existing mechanisms. Here is a quote from David Walker, the former head of the General Accounting Office. I think the regular order is dysfunctional as it relates to these types of issues. And it's, quite frankly, understandable, because you're talking about putting together a package that crosses many different jurisdictions. And the idea that that would end up emerging from the regular order I think is just totally unrealistic. That was testimony before the Budget Committee in 2007 by the Comptroller General. Leon Panetta, the former chairman of the House Budget Committee and the former Chief of Staff to President Clinton, now the Director of the CIA, said this in testimony before the Senate Budget Committee in response to the question: Shouldn't we rely on just the regular order; the normal committee process? It'll never happen. The committees of jurisdiction will never take on the kind of challenges that are involved in this kind of effort. If you just leave them under their own jurisdictions, that will never happen. It hasn't happened, and I am chairman of one of the committees. I accept that the normal process is not going to deal with a threat of this magnitude. It is going to take all of us, Democrats, Republicans, Congress, and the administration, working together to fashion a plan that deals with the long-term debt threat; that also deals with the short-term need to restore jobs, to restore economic growth, and to build the economy. These things are not contradictory. They, in fact, are complementary. We must do both. We must restore economic growth and economic strength and, at the same time, we must deal with the long-term debt threat. That is the proposal Senator Gregg and I bring to the floor. We urge our colleagues to seriously consider what we have offered. It has 35 cosponsors, about evenly divided between Republicans and Democrats. I know it is a tall order to get to 60 votes in the Senate. It is especially hard when organizations on the left are opposing it and organizations on the right are opposing it for very different reasons. But this is a case of the challenge of the middle holding. That has been the great strength of America--our ability to take on tough challenges and meet them. Whether it was World War I or World War II, the Great Depression or all the other challenges this country has faced, over and over America has proven it is up to the challenge. I believe we are up to this challenge as well, and I believe people working together can come up with solutions that would be credible not only to markets in this country but markets around the world that are beginning to wonder: Does America have the ability to face up to the debt threat that overhangs the future economic strength of the country? I appreciate this time. I thank the chairman for allowing this time. I know Senator Gregg will be coming to the floor in about an hour for his presentation on the same subject. I thank the Chair, and I yield the floor.

Mr. CONRAD. May I call up the amendment before we move on?