Kent Conrad

Mr. CONRAD

Mr. CONRAD. Madam President, I would be happy to extend an additional 5 minutes of time to the Senator.

Mr. CONRAD. I yield the distinguished Senator from Florida 10 minutes off the resolution.

Mr. CONRAD. Madam President, perhaps this would be a good time for us to say what a budget resolution does do and doesn't do. The chairman is entirely correct that when the budget resolution gives an instruction to the Finance Committee to raise a certain amount of revenue, it does not control how they do it. When the Budget Committee gives an allocation to an appropriations committee or an appropriations function, we give them an allocation of funds. We don't tell them how to spend it. That is true. What is also true is when we offer amendments on the floor we talk about assumptions. In fairness, the chairman has talked about assumptions that he has with respect to his reconciliation instruction. He has said he is assuming that money will be used to extend the 10- percent rate, to extend the child care credit, to extend marriage penalty relief. But the fact is we do not control how the Finance Committee ultimately decides to use those funds any more than we control, with what Senator Daschle has done, reducing the tax cuts for those who earn over a million dollars a year by 10 percent in order to fund increased resources for veterans medical care. The chairman's assumptions are made with respect to reconciliation. He has stated them clearly and directly. The Democratic leader has stated his assumptions clearly and directly. He has indicated he would fund the increased spending for veterans health care by reducing the tax cuts for those who earn over $1 million a year by 10 percent. That is his assumption. Just as the chairman has indicated, the reconciliation instruction that he has provided in this Budget resolution he believes ought to be used to expand, for the most part, middle-class tax cuts. The fact is, neither of them control what the Finance Committee does with their allocation. But it is an assumption and both sides are using assumptions, so there is really not a difference there between the two sides. With that, the Senator from Florida is seeking time. Is he asking for 10 minutes?

Mr. CONRAD. Mr. President, I yield 15 minutes off the resolution.

Mr. CONRAD. Mr. President, I would be happy to yield time to the Senator from North Dakota. How much time does the Senator seek?

Mr. CONRAD. I thank the Senator from Florida for making the point. It is an important point. We had testimony at my hearing where people have waited 10 months to see specialists. While it is absolutely true what the Senator from Colorado shows on his chart, that we have seen substantial increases already in veterans health care funding, veterans medical care funding, it is also true we are still not meeting the need. The reason for that is not only inflation but medical inflation and the sharp increase in the number of veterans being served. In 2002, 4.7 million were provided health services. That is expected to increase to 5.2 million in 2005. So we have, really, a double whammy. We have inflationary costs, medical inflation running far ahead of regular inflation. On top of that, the number of veterans seeking care and needing care increasing now, of course, with the operation in Iraq and Afghanistan. All who have been to Walter Reed have seen that circumstance firsthand. We have seen the wards literally filled with young soldiers and some not so young who have been grievously injured. They deserve to know they will get the best medical care this country can provide. That is what the Senator from Florida is saying in the Senate. That is what the Democratic leader is saying in the Senate. We have a commitment here. This is a priority. It is a priority that ought to be met. I yield the floor.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Mr. President, I thank our colleague, Senator Nelson from Florida, who has been such a valuable Member of the Senate Budget Committee. He did a superb job of offering the amendment he has just described in the committee. I am very hopeful that either his amendment or Senator Daschle's amendment will pass so we can increase the amount of money going to veterans million dollar care. I held a hearing in my State on this question. I invited all the veterans organizations. It was disappointing to hear what is happening to veterans across the country. We had testimony of people waiting 10 months to get an appointment for specialty care, an appointment to see an orthopaedic surgeon, an appointment to have certain eye care because there is a shortage of specialists in the VA. They testified clearly and compellingly that more money is needed. We will hear from the other side, we will hear from the chairman of the committee, that there have been significant increases of veterans medical care. There is a chart that shows that is exactly true, going back 10 or 12 years. We would expect just on inflation alone, over that extended period, we would see a doubling of the costs. Remember, when we come to veterans medical care, that upward slope is even sharper because health care expenditures have been advancing faster than the rate of inflation. In addition, the population that is in need of health care is expanding because we have our World War II, our Korean War veterans, and our Vietnam vets getting to that age when they need more intensive care. The result is tremendous upward pressure on the costs. That chart shows spending on veterans from I don't know how far back, 1990 perhaps, $15 billion, and we are now approaching $30 billion; but we have to remember over that extended period of time, not only are we dealing with inflation, we are dealing with medical inflation that is running at higher levels than other inflation. The number of veterans who are in an age group that requires more intensive care is exploding. What was very moving at the hearing I conducted was to hear from veterans all across North Dakota. We heard of the tremendous stress on the veterans population because of an inadequate level of care in our VA facilities. No. 1, an inadequate number of VA facilities, so many people are traveling for specialty care in North Dakota 12 hours one way in a van and then 12 hours back to get a doctor's appointment. We had veterans testify they traveled 12 hours one way in a van, had to go all the way to Minneapolis to get specialty care and got there to be advised their appointment had been canceled and then had to get back in a van and drive 12 hours back to North Dakota. That is not right.

Mr. CONRAD. I thank the Chair. Mr. President, I thank the Senator from Michigan for an excellent presentation, but much more than that, I thank her for the superb contribution she makes on the Senate Budget Committee. I think she has been one of the strongest members of the Budget Committee in a very long time. She is somebody who has a very strong background in economics and business issues and understands that a budget is about choices, and these choices matter. They matter to the long-term economic security of the country. They matter to whether we are going to have Social Security and Medicare for our seniors in the future or if it is going to be dramatically reduced. The Senator from Michigan understands this is a matter of choices about national security, whether we are going to have the resources to fund the military in a way that keeps it the most powerful and most dominant military in the world. She understands that a budget is about choices between those issues that strengthen us as a nation and as a people in terms of providing an outstanding education because that is what it is going to take to be fully competitive in a modern world; whether we are going to be able to expand health care coverage in America to deal with the more than 40 million people in this Nation who do not have health care coverage; whether or not we are going to have homeland security that is something that makes us as safe as we can be in the face of this terrorist threat. Frankly, we on our side question the choices the President has made to cut the COPS Program. The COPS Program puts 100,000 police on the street. The President says cut it 94 percent. What sense does that make when there is an ongoing terrorist threat? What sense does it make to cut port security by almost two-thirds? That is what the President is saying. What sense does it make to cut the funding for firefighters all across America by a third? Those are the choices the President has made, all of it sacrificed on the altar of tax cuts going primarily to the wealthiest among us. As I indicated earlier today, under the President's plan, the tax cuts he seeks to make permanent would add $1.5 trillion to the debt. The President says it is the people's money. Give it back. There is nothing to give back. The money is gone. This country is in debt. The deficit this year alone is going to be approaching $500 billion, and the truth is, that does not begin to describe how deep the hole is because that counts the $160 billion more he is taking from Social Security, every penny of which he has to pay back and he has no plan to do it. Now we are talking about an operating deficit in the range of $700 billion in this year alone. And the President comes in and says: Let's just hold down the growth of nondefense, nonhomeland security domestic spending. That sounds as though he is doing something. But when you look at it, that part of Federal spending is just a tiny share of the Federal budget. The spending he is talking about slowing down is only 17 percent of Federal spending, and his savings are only about $7 billion when you have a $700 billion problem. I call it the 1-percent solution. He is not dealing with the problem in any serious way. Then the President says: Don't worry; I know we have run up these big deficits, the biggest in the history of the country, and we have a lot more coming. But I am going to cut the deficit in half in the next 5 years. But he is not. The only way he cuts the deficit in half the next 5 years is he just leaves out everything. For example, he leaves out any war cost past September 30. Does anybody believe the war in Afghanistan, Iraq, and the war on terror ends on September 30? The Congressional Budget Office tells us it is going to cost $280 billion more, and the President has nothing to pay for it. I see the leader in the Chamber and I understand he is ready to offer an amendment, so I will cut short my remarks at this moment. I conclude by saying it is time we face reality. The President's budget is not going to cut the deficit in half in the next 5 years. If one looks at the additions to the debt, what they see is there is virtually no change over the 5 years of the President's plan. The additions to the debt are going to run $500 billion, $600 billion a year every year. I yield the floor.

Mr. CONRAD. I will in a minute. Let me complete my thought, and then I will be happy to yield to the Senator for the purpose of a question. I believe this is critically important that we put this discipline in place. The Senator has referenced the middle-class tax reductions. I have said publicly that I will support the extension of the 10-percent bracket. I will support the continuing marriage penalty relief. I will support the continuing relief that we see with the expansion of the child tax credit. But to do it, we ought to pay for it, just as we ought to pay for new spending. If we cannot pay for it, then we ought to have a 60-vote hurdle in front of us to discipline the spending-and- tax-cutting process in this body. Look, we have record budget deficits, and under the budget that is before us by the majority, the increases in the debt are virtually unchanged over the 5-year period. The debt is being increased under this budget by $2.86 trillion. The increases in the debt year by year are never below $550 billion, $560 billion. I will be happy to yield to the Senator for a question.

Mr. CONRAD. Mr. President, I almost don't recognize my amendment when I hear the description of the Senator from Idaho. The amendment he is talking about is not my amendment. My amendment says very simply: No new mandatory spending, and that is two-thirds of Federal spending; no new tax cuts unless they are paid for until we stop using Social Security funds for other purposes. The only way around that is a supermajority vote. So let me repeat what this amendment does. This amendment says: No increase in mandatory spending, no new tax cuts that are not paid for until we stop the use of Social Security funds for other purposes. Let me be clear. We have had in the past pay-go provisions, and the pay-go provisions operated in just this way. They were focused on mandatory spending, not on discretionary spending. We disciplined discretionary spending with spending caps. We have a cap in place right now. Mandatory spending we disciplined with a pay-go provision just like mine, and we disciplined the tax cut side of the agenda with a discipline just like mine. But those disciplines were stopped in 2002. What I am saying is they ought to be put in place. We ought to insist that if somebody wants more spending, new spending on the mandatory side, they ought to come up with a way of paying for it. If they want new tax cuts, they ought to find a way to pay for it until we stop the use of Social Security money for other purposes. We would defend those disciplines with a 60-vote point of order.

Mr. CONRAD

Mr. CONRAD. I yield 20 minutes to the Senator from North Dakota, off the resolution.

Mr. CONRAD. Mr. President, I will make the point once again as to the great concern I have about both the President's budget and the budget that has come out of the Budget Committee, and that is it adds dramatically to the national debt right before the baby boom generation starts to retire. I look at the President's budget, and in the 5 years that he has proposed, he will add $3 trillion to the national debt. When I look at the budget proposal from the Budget Committee, it adds almost as much, $2.86 trillion to the national debt over that same 5 years. I hear the other side saying we are cutting the deficit in half. Well, maybe they are cutting the deficit in half but the increases in the debt are not being reduced hardly at all. If we look at this chart, in 2004 the debt subject to limit, that is the gross debt of the United States, is $7.4 trillion. Under this budget, they will add over $600 billion to the debt. The next year, they will add nearly $600 billion to the debt, $569 billion. The next year, they will add $552 billion to the debt. The next year, they will add $563 billion to the debt. And out here, in 2008, between 2008 and 2009, they will add another $563 billion to the debt. How can it be that these two statements are both right? How can it be they say they are going to reduce the deficit, they are going to cut it in half, and on the other hand the increases in the debt are hardly being reduced at all? The biggest reason is the Social Security trust funds that are being taken. Over this 5-year period, hundreds and hundreds of billions of dollars of Social Security trust fund money is being borrowed and is being used to pay for tax cuts and other things. It is, in effect, hiding from us our true fiscal condition. The hard reality is the increases to the debt are not being reduced by this budget proposal. In fact, the debt is being run up and, as I have said many times, that is at the worst possible time, right before the baby boomers retire. That is why I think the amendment I put before our colleagues is so important, because it adds discipline. It says: Look, we can't do new mandatory spending--and that is two-thirds of Federal spending--and we can't do new tax cuts that are not paid for, without a 60-vote supermajority, until we stop taking the Social Security fund and using it to pay for the operating expenses of the Federal Government. This reminds me so much of what has happened in the corporate sector when these various companies--Enron most notably, WorldCom the same way--understated how far underwater they really were. They were basically hiding their debt from the shareholders, hiding the debt from investors, hiding the debt maybe even from themselves. I see some of that same pattern occurring here. The Senator from North Dakota is here. How much time does the Senator require?

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

Mr. CONRAD. Mr. President, I give 10 more minutes off the resolution to the Senator from New Jersey.

Mr. CONRAD. Let me yield 20 minutes off the resolution to the Senator from New Jersey.

Mr. CONRAD. Mr. President, this is a very important debate. I know it is probably hard for people at home to follow. The Senator says we are treating the money exactly the same way, and that we are following the law. To a point, he is exactly right. When the money comes in, the Social Security payroll tax revenue comes in, and the money is used, as he described, to buy what are special issue Treasury bonds with the full faith and credit of the United States. The Senator made reference to West Virginia. That is where those bonds are in a vault calling on the Federal Government to pay back Social Security for the money that has been borrowed. The difference is, What is used with the receipts? What is used with the actual cash? I believe the right course would be to use that cash to either pay down the Federal debt or to prepay the liability that we all know is coming in Social Security. The budget I proposed in 2001 for 2002 did precisely that. Instead of having as big of a tax cut, I had half as big a tax cut and used the rest of that money to pay down the debt or prepay the liability. There is a fundamental difference here about how to use the cash receipts that are the overage from the money coming in from Social Security payroll taxes that are over and above what is needed to pay the immediate benefit. The Senator says we are following the law. Yes. We are following the law. But it is also true that we are taking the money, and instead of using it to pay down the debt or prepay the liability, we are using it to pay for other tax cuts and to pay other Government expenses. I believe that is a profound mistake. The only way we get back to some policy that stops that practice is to discipline both the spending side of the equation and the revenue side of the equation to require a 60-vote point of order against new tax cuts or new spending that is not paid for. I think it would be a tremendous advance for this Congress to say, Let's secure Social Security first. That is the first thing we ought to protect. The way to do it is to provide additional discipline on the spending side of the equation and the revenue side of the equation, to say if it is not paid for, it has to require a 60-vote hurdle, a supermajority vote, for new taxes and for new spending that is not paid for. I note the Senator from New Jersey is seeking time. How much time does the Senator desire?

Mr. CONRAD. I would prefer not to yield for the moment. I would like to complete a thought and then I will be happy to yield. My own belief is that would have been a much better strategy for the country than to run up the credit card. Obviously, once this hole has been dug so deep, any budget one writes for a time will use Social Security money. There is no other way to write one anymore. This hole has been dug so deep, the Senator is correct when he says budgets I offered last year would have used Social Security funds for a time. Absolutely. There is no way to write a budget anymore that does not. The trick is to get on a glidepath to stop it. We did that successfully in the late 1990s. I was very proud to have been part of the 1993 effort and the 1997 effort. Those two budget plans put us on a course to stop using Social Security money for other purposes, and for 2 years we stopped what I considered to be a raid on Social Security. We stopped it. The President pledged to continue that policy, not to use Social Security revenues for other purposes. Why did he make that pledge if he didn't think it was important? Why did he make that pledge if he didn't think it was important? He thought it was important. I think the vast majority of Members in this body pledged to protect Social Security funds. But it is not being done. On the question of this amendment, whether there is a bias towards spending or tax cuts, I would say there is no intention to have any bias here. When we have put in place budget disciplines, I say to my friend, the chairman of the committee, we have always targeted mandatory spending with respect to pay-go provisions and revenue. That is how we have done it in the past--mandatory spending and revenues. That is what this amendment does. We have used spending caps to discipline discretionary spending. I support both. I think we need both disciplines. Mandatory spending is now two-thirds of Federal spending. We just saw the biggest increase in mandatory spending ever last year, a program that now they tell us will cost $530 billion over the next 10 years. I think it would have been very healthy to have in place the budget discipline my amendment contemplates. My amendment says no new mandatory spending--and that is two-thirds of Federal spending--and no new tax cuts, unless they are paid for, until we stop using Social Security money, Social Security surpluses to pay other bills of Government, to pay for tax cuts, to pay for other expenditures of Government. I think that would be the right policy to put in place. The Senator says, Then you would require 60 votes for all these kinds of spending initiatives. Absolutely, I would. I would put in place a requirement for at least a supermajority vote, at least 60 votes for new spending. I would put in place a supermajority requirement for additional tax cuts. And, I say to my colleague, I would be part of the 60 on the middle-class tax cuts. I have stated publicly I am for extending the 10-percent bracket. I am for extending marriage penalty relief. I am for extending the child care credits. I would even vote to extend the expensing for small business. Sign me up. I will work to get the 60 votes. But I think it ought to be paid for. I think any new spending ought to be paid for, until we stop taking the Social Security funds and using them to pay other bills, to pay for the tax cuts, and to pay for other expenditures of Government. I think at this time with the baby boom generation about to retire we ought to be taking those Social Security surpluses that are being generated now that we all know are going to be needed when the baby boomers retire and we ought to use that money in one of two ways: We either ought to pay down the debt with it to better prepare ourselves for what we all know is to come, or we ought to prepay the liability. That is what I urged my colleagues to do back in 2001 when we had these supposedly huge surpluses. I urged that we use a third of that money to either pay down the debt more or to prepay the liability that we all know is coming. I think that would be a far wiser course than the one we are embarked on now. I yield the floor.

Mr. CONRAD. The Senator is exactly right. The problem is this. That is what is being done. How do those T-bills get redeemed? We have borrowed the money under the President's plan, all of us, instead of using it to pay down debt or to prepay the liability. The cash is gone. The cash has been used for something else, leaving an IOU behind. How does the IOU get paid back? The President has no plan to pay it back. The only way I believe the President intends to pay it back is dramatically reduce Social Security and Medicare payments in the future. I think we have seen a forewarning of where it is headed with the head of the Federal Reserve saying to people you ought to consider cutting Social Security benefits. The Senator said payroll taxes don't pay for Social Security and Medicare. They were never designed to pay for both. Payroll taxes were designed to pay for Social Security and those funds are in surplus, but they are being used for another purpose. Medicare is a separate program, financed in part by payroll taxes, in part by general fund transfers. So these are not the same programs. They are not funded in the same way. The fact is payroll taxes, in both the part of Medicare they fund and in Social Security, are in surplus, and the surpluses, the funds, are being taken and used to pay the operating expenses of the Federal Government. I think that is a serious mistake. What is the alternative? I think the alternative is to use the money to either pay down debt or prepay the liability. That is what most people would do in their private lives, getting ready for retirement, and that is what we should have done to prepare for the retirement of the baby boom generation. The Senator says all the money goes in one pot, and that is exactly right. That is how it works. All the revenues coming in go in one pot. All the expenditures come out of that pot. The problem with that is all these revenues are not the same. Some of them are supposedly for a trust fund for Social Security and Medicare. Those moneys are designed to be in surplus now in preparation for the retirement of the baby boom generation, but they are not being used in a way that will prepare for the retirement of the baby boom generation. The Senator talked about budgets I have offered, and that they are exactly the same as what is being done here. No, I say respectfully, no, they are not. In 2002 I proposed a budget that had $473 billion less in deficit. Why? Because I wanted to use that money to prepare for the retirement of the baby boom generation. In 2003, my budget had $523 billion less in deficit and added debt. In 2004, my budget proposal had $1.2 trillion less in deficit and debt for the budget period. The reason was, I wanted to use that money to either pay down debt or prepay the liability we all know is coming.

Mr. CONRAD. I will be happy to yield.

Mr. CONRAD. Mr. President, I think this is a very important debate, and I thank my colleague for the way he has joined the debate. I disagree profoundly with him. He knows that, but that is what a debate is about. I think this is absolutely one of the most critical debates that we can have because of where we are headed. The Senator from Oklahoma put up a chart that lumps Social Security and Medicare together as though they are one program. They are not. Social Security is completely separate and apart from Medicare, as the Senator knows. The Senator says if we look at all of the payroll taxes, they do not cover Medicare and Social Security. So there is no real surplus. But that isn't the way these programs are funded. Social Security is funded with payroll taxes. If you look at Social Security, the revenue coming in is far in excess of the money going out. This year there is a $160 billion Social Security surplus. For this next year, it will be $172 billion. By 2009, the surplus in Social Security will be $235 billion. Under the President's plan, and under the chairman's plan, all of these surpluses in Social Security are going to be taken and used to pay for other things. It is very interesting to see that the Social Security surplus being taken over the next 10 years is almost equal to the amount of the income tax cuts proposed by the President. You have what I consider a spectacle of financing income tax cuts that primarily go to the most wealthy in the country out of payroll taxes being paid predominantly by middle-income people. Then you don't have the money to keep the promise in Social Security, so you have the head of the Federal Reserve coming to Congress and saying: Whoops, you are overcommitted, you better cut Social Security benefits. Look, I don't think it was ever anticipated when Social Security was reformed that those surpluses would be used to pay the operating expenses of the Government. You couldn't do that in the private sector. No private sector employers could take the retirement funds of their employees and use them to pay the operating expenses of the company. You could not do that in the private sector. If you did, you would be on your way to a Federal facility, but it would not be the Congress of the United States. It would not be the White House. You would be on your way to a Federal facility, all right. It would be a Federal prison, because that is a violation of Federal law, to take the retirement funds of employees and use them to pay the operating expenses of a company. That is a violation of Federal law. That is exactly what we are doing here. Let's understand what we are doing.

Mr. CONRAD. Mr. President, the amendment I am offering today is to protect the Social Security trust fund surpluses from additional raids. My amendment would establish a 60-vote point of order against the consideration of any direct spending or revenue legislation that would increase the on-budget deficit in any fiscal year until we have balanced the budget without counting the Social Security surpluses. Very simply, what this amendment does is to say, no new spending, no new tax cuts, unless they are paid for, until we secure Social Security, until we stop the raid on Social Security trust fund surpluses. I said from the beginning that President Bush's fiscal plan would ultimately threaten Social Security. I believed it then, and I, unfortunately, believe that events have confirmed how seriously the President's fiscal plan threatens the fundamentals of our economic security. Now we see the Chairman of the Federal Reserve, Chairman Greenspan, suggesting we are overcommitted. He has said to the Congress of the United States that he recommends we consider reducing Social Security benefits. That is where the President's overall fiscal plan leads. It fundamentally threatens not only Social Security but Medicare as well. I want to go back to 2001 and what the President told us then. The President told us, in his budget blueprint for the 2002 budget: None of the Social Security surplus will be used to fund other spending initiatives or tax relief. Yet that is precisely what we see happening. Not only is the President using Social Security, he is using $2.4 trillion of Social Security surpluses over the next 10 years. Let me be quick to say they are not surpluses. All of that money is going to be needed to pay for the retirement of the baby boom generation. The President, who pledged not to take the money and use it for other purposes, is doing precisely that. He is using every penny of the Social Security surplus over the next decade to pay for his tax cuts and other expenses of Government. Interestingly enough, if one looks at the Social Security money that he is borrowing over this next 10 years to pay other bills and compares it to the cost of his tax cuts--both those already passed and those proposed--one finds a very close fit, a very close fit between the money he is borrowing from Social Security, with no plan to pay it back, and the cost of his tax cuts. They are almost identical. There is $2.4 trillion of Social Security money taken over the next 10 years--all of it financed with payroll taxes, primarily paid by middle-income people--and he is using it to provide income tax cuts that disproportionately go to the wealthiest among us. It is very interesting to pierce the veil and to see what the President is doing and to see the full effects of his policy: $2.4 trillion taken from Social Security--borrowed, if you will--and then used to finance income tax cuts. If we look at who the beneficiaries are of those income tax cuts, here it is: We see overwhelmingly they are going to the wealthiest among us. The top 1 percent, those earning over $337,000 a year, get 33 percent of the benefits of these tax cuts. Almost 69 percent of the benefits go to the top 20 percent. Shown down here on the chart, the bottom 20 percent get virtually nothing. The second 20 percent gets 4.8 percent of the benefits. The middle 20 percent gets 10.6 percent of the benefits. The fourth 20 percent in terms of income, those with $73,000 or less in income, get 15.8 percent of the benefits. The top 20 percent get 69 percent of the benefits. If we look on the recipient side, those who get Social Security benefits, that is instructive as well. What this chart shows is almost two-thirds of retirees rely on Social Security for more than half of their income. In fact, 31 percent of Social Security beneficiaries get at least 90 percent of their income from Social Security benefits; 33 percent get 50 to 89 percent of their income from Social Security; and 36 percent get less than 50 percent of their income from Social Security. What is going on is--again, I like to use the term ``pierce the veil''--the President is borrowing from the Social Security trust fund, $2.4 trillion during this next 10 years, using it to finance income tax cuts costing $2.5 trillion. The income tax cuts go overwhelmingly to the wealthiest among us. Thirty-three percent goes to those earning over $337,000 a year, and it is all financed by payroll taxes paid disproportionately by middle-class people. In fact, over 70 percent of Americans pay more in payroll taxes than they pay in income taxes. This is the greatest shift of wealth that has perhaps ever occurred in our history, from the many to the few. That is the President's plan. Here we see the difference Social Security has made, before we had Social Security and without it. Nearly 50 percent of beneficiaries would be in poverty. That has been the extraordinary power of Social Security and Medicare. It has lifted people out of poverty. Before we had Social Security and Medicare, almost half of seniors were in poverty. Social Security has reduced that to 9 percent; 9 percent now of our seniors are in poverty. What a remarkable social program this has been, the combination of Social Security and Medicare, to lift people out of poverty. The President says: Well, we have a big shortfall in Social Security over the next 75 years. Indeed, we do. The 75-year shortfall in Social Security is $3.8 trillion. That is according to the actuaries. But interestingly enough, if you look at the cost of the President's tax cuts over that same 75- year period, they are three times as much: $12.1 trillion is the 75- year cost of the President's tax cuts. All of this should inform what we face in the very near future. The President's massive runup of deficits and debt is occurring at the worst possible time, right before the baby boomers begin to retire. This chart shows it very well. It shows the tax cuts explode as the surpluses in the trust funds of Social Security and Medicare become deficits. The green part of these bars is the Social Security trust fund. The blue part is the Medicare trust fund. The red is the costs of the President's tax cuts. What you can see is right now the surpluses from Social Security and Medicare are larger than the cost of the tax cuts. As I have indicated, over the next 10 years the Social Security surpluses that are being taken to finance the tax cuts are about equivalent to the cost of the tax cuts. That is over the next 10 years. But look what happens when the trust fund goes cash negative. At that very time the cost of the tax cuts explodes, driving us right over the cliff into deeper deficit and debt. This is what is so fundamentally flawed about the President's fiscal plan for this country. We see the same flaw in what has been reported out of the Budget Committee. It is seen most clearly in the President's plans because of his adherence to even more tax cuts when we are running record budget deficits. The President is proposing increasing spending and cutting revenue when we already can't pay our bills. What does that do? We can see what it does as he takes more and more of the Social Security money to finance tax cuts and other expenditures. That string starts to run out when the trust fund goes cash negative. Unfortunately, the President has made no provision for it. His answer is: Cut the revenue more. Spend more, when you already have record deficits. This is where it is all headed. It is not just the Congressional Budget Office and it is not just this Senator's calculations. We see these warnings coming from the Comptroller General of the United States. We see them coming from the International Monetary Fund. We see them coming from responsible budget groups warning the President has us on an unsustainable course. Here is what is going to happen with Social Security. We are going to see a dramatic increase in the number of people who are eligible to receive it. There is going to be a doubling of those eligible for Social Security. We have about 40 million people now who are eligible for Social Security. That is going to double to more than 82 million. The President has no plan to deal with it. Unfortunately, what he is doing is taking the Social Security surpluses. We can see the pattern on the Social Security surplus. We can see it is at very high levels now. The Social Security surplus for this year will be about $160 billion. That continues to increase dramatically in preparation for the retirement of the baby boom generation. But instead of using this money to pay down the debt or prepay the liability, the President is taking it all to finance current tax cuts and other expenditures, putting us in a more vulnerable position. My amendment says, let's protect Social Security first. We protect the Social Security trust funds from further raids by preventing the consideration of new revenue or new spending that is not paid for until the budget is balanced without counting the Social Security surplus. This is enforced by a 60-vote point of order. I want to make clear, the basic idea is if you want new spending, if you want new tax cuts, you can do it, but you either have to pay for it, or you have to get a supermajority vote. We would maintain that discipline until the raid on Social Security is stopped, until we stop the Bush administration from using Social Security funds to pay for tax cuts and other expenditures. This is a commonsense amendment. I hope very much our colleagues will support it. It is critically important to provide the discipline on both the spending side and the tax side as we go forward. I yield the floor.

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

Mr. CONRAD. That is correct. Rarely have I seen in my time in the Senate--I have been here 17 years--rarely have I seen somebody come out with a more fabricated chart than the one presented by the Senator from Pennsylvania. It is false in its detail. It is false in its assertion. It is a complete fabrication. For him to come and say our amendments on the budget resolution were not offset is absolutely false, and the record shows it as clearly as it can be shown. On the appropriations bills, to assert we offered $500 billion of amendments is just false. It is not true. We authored, if you totaled them, $37 billion of amendments. But you cannot total them. They were offered one after another. We would offer an amendment. It would be defeated. Then we would take that same money and offer a different amendment. That is the fact of the matter. But what is most interesting is, if you did total them, we were completely outstripped by what the Republicans did when they went into the conference committee between the House and the Senate to work out the differences and they came back and increased spending $63 billion. Now, let's talk about who has responsibility here for the explosion of the debt, because that record is very clear. Our friends on the other side are in total control. They control the House. They control the Senate. They have since 2001. They control the White House. This is what has happened to the debt under their stewardship and under their leadership. The debt has exploded. When President Bush took office, the publicly held debt was projected to be, in 2008, at that amount, $36 billion. In his 2002 budget, it got raised to $1.2 trillion. Then his tax cut passed and it went up to $1.6 trillion. Then the President's 2003 budget came up and he expanded the debt to $3.3 trillion. Then we got his budget for 2004 and it increased the debt to $5 trillion. Then we got the Senate GOP 2005 budget and they increase the debt to almost $5.5 trillion. These guys are totally in charge. The Republicans control the House. They control the Senate. They control the White House. It is on their watch that the debt has exploded. That is the fact of the matter. It is no wonder they are now trying to distort our record to give themselves cover for what they have done. Amendment No. 2704 Mr. President, I am now going to lay down an amendment. I send an amendment to the desk. I might add, I have the agreement of the chairman of the committee that we will proceed with this amendment at this time. I inform the Presiding Officer, I have discussed this with the chairman. I send this amendment to the desk.

Mr. CONRAD. That is a fair statement.