Kent Conrad

Mr. CONRAD

Mr. CONRAD. I thank my colleague for giving an excellent presentation and an excellent suggestion. This country has the second largest oil reserves in the world, and we are getting ready to have the American people rebuild that nation. There is something really wrong with the administration's thinking on this matter, to come before us and ask for $21 billion, to say there is another $40 billion to $50 billion of need in the next year and that they are going to get it from somewhere else, when the somewhere else has promised $1.5 billion. So there is a shortage of another $40 billion. Where is that going to come from, and what is it being used for? My colleague from North Dakota pointed out what was in the Washington Post this morning, a detailed analysis of some of these expenditures. One that I found most unusual was $1 million per family in Iraq for a witness protection program for 100 families. That is $100 million--$1 million a family. That is a pretty good deal. It is going to be used to build prisons in Iraq for $50,000 a bed. Somebody is not thinking straight. They are going to create a ZIP Code, millions of dollars to create a ZIP Code; area codes for phone systems, millions of dollars paid for by American taxpayers. I do not think so. This in a country that has the second largest oil reserves in the world. As my colleague has pointed out, the reason we cannot use their oil money to rebuild their country is that they owe tens of billions of dollars to Saudi Arabia and Kuwait? Somebody has to have some common sense. We have to slow this thing down and think about what we are doing. I think the administration is kind of discombobulated. They are running around throwing out numbers they have not even thought through. That just cannot be what the response of the Congress is. In light of this request for $87 billion--and that is the tip of the iceberg, unfortunately. The fact is, it is very clear they are not going to get the $40 billion or $50 billion from anybody else and they will be right back asking for tens of billions of dollars more. That cannot be the response. Now, why not? First, it is not right. It is not fair. The American taxpayer should not be saddled with debts that are not ours. We already have our own debts. We have a runaway freight train of debt in this country. In light of the President's request for another $87 billion, I think it is time for us to go back to his State of the Union Address on January 28, 2003, when he said to us: This country has many challenges. We will not deny, we will not ignore, we will not pass along our problems to other Congresses, to other Presidents, and other generations. That is what he said to us. But look at what has really happened. We are doing precisely what he said we will not do. The debt of the United States, which will be passed on to future generations, which will be passed on to future Congresses and to future Presidents, is absolutely mushrooming out of control. The President told us just 2 years ago that in 2008 the debt would be virtually paid off. He said there would only be $36 billion left. Now, we know if we enact the President's policies, instead of virtually paying off the publicly held debt by 2008, which is the smaller part of the debt, it will be $6.2 trillion. How much is that? That is 6,200 billion dollars. That is how much the debt is going to be by 2008, the point at which the President had told us we were going to have virtually paid off the debt. So the President was wrong, and wrong by a mile, on that assertion. The President told us: Tax relief is central to my plan to encourage economic growth, and we can proceed with tax relief without fear of budget deficits, even if the economy softens. He told that to us 2 years ago. But let's look at what we now know. What we now know is that instead of the assertion by the President that there were not going to be budget deficits, we have record budget deficits, the biggest in the history of the country, and by a country mile. The President's last proposal was reviewed by the Office of Management and Budget, and they tell us now that the deficit will be $535 billion next year. The previous record deficit was in 1992, when the first President Bush was in office, and the deficit was $290 billion. Now for next year, it is $535 billion. That is a record deficit. The President told us just 2 years ago it would not occur. Then the President told us the next year: . . . our budget will run a deficit that will be small and short-term. . . . He told us the budget deficit would be small and short term. That was just a year ago. This is according to the President's own budget documents. This is what happens if his spending and his tax proposals are adopted. What we see is an ocean of red ink, and one that grows year after year. These are not small deficits, they are not short-term deficits, they are the biggest deficits we have ever had. And the next 10 years is the budget sweet spot. They are the good times, according to the President's own analysis of his proposals. His own budget shows us that his plan is taking this country right over the fiscal cliff. This is what he says will happen to budget deficits. Not only are they not small, they are record. And they are not short term, they are endless. This is the President's analysis out to the year 2050, and there is no break in deficits anywhere here. It is deficits each and every year. We are in this part of the chart now, which shows the smallest deficits, and we know they are record deficits, the biggest deficits we have ever had in the history of the country. Next year alone, there is a deficit of $535 billion. The truth is, it is much worse than that because they are going to take $160 billion of Social Security money on top of that $535 billion of deficit. They are going to take every penny of Social Security surplus and throw that into the pot. So, on an operating basis, the deficit next year is really going to be $700 billion. The debt of the United States at the time Jimmy Carter was President, after 200 years of history in this country, was around $750 billion, and we are going to add that much or virtually that much in 1 year under this President's plan. That is not the most serious part. That is not the part that really worries this Senator. What really worries me is, that is the tip of the iceberg, according to the President's own analysis of his plans. He says, if you adopt his budget plan, his spending, his tax plan, that the deficits grow geometrically when the baby boomers start to retire. At the very time the baby boomers retire, the cost of the tax cuts explode, pushing us deep into deficit and debt, to levels never seen in the history of the United States. That is the plan the President is pursuing. It is a reckless plan and it is a dangerous plan. The President presented his budget for fiscal year 2004, and it said: Compared to the overall Federal budget and the $10.5 trillion national economy, our budget gap is small by historical standards. First of all, there weren't going to be any deficits. That proved to be wrong. Then the deficits were going to be small and short term. That proved to be wrong. Now the President is saying, as a share of the whole national economy they are relatively small. The problem with that statement is it is wrong, too. It is wrong, too. The next chart shows how big these deficits are as a share of our national income. This chart goes all the way back to the end of World War II--just after the end of World War II. You can see the previous record deficit as a percentage of GDP was back in 1983--6 percent of gross domestic product. Next year, the deficit as percentage of gross domestic product is going to be 6.2 percent, if one excludes the Social Security trust funds from the calculation. So if you are looking at the budget on an operating basis, if you are looking at it as any private sector firm would have to look at its budget, what you see is the biggest deficit, as a percentage of gross domestic product, since World War II. And the President says it is relatively small. It is not relatively small, it is huge. It is the biggest it has been since World War II. Of course, what the President has left out is that the Social Security surpluses back in 1983 were virtually nonexistent. So when the President--the then-President--took those moneys, he wasn't taking much. But look at what has happened to the Social Security surpluses. They have been mounting dramatically, and now this President is taking every dime of Social Security surplus to pay the operating expenses of the country. No private sector firm would be able to do that. If you were in the private sector, you couldn't take the retirement funds of your employees and throw those into the pot to pay your operating expenses. If you did, you would be on your way to a Federal institution, but it would not be the White House. It would not be the Congress of the United States. You would be on your way to the Federal penitentiary, because that is a violation of Federal law. Yet that is what this President is doing this year and next year, taking every dime of Social Security trust fund surplus. And not just this year and next year. Under the President's budget plan, he is going to take every penny of Social Security surplus this year and next year and the year after that and the year after that and the year after that and for the next 10 years. Every penny is being taken to pay the operating expenses of the Federal Government. This President is taking us down the road that is a fiscal disaster of the first order, and we had better start facing up to it. We are going to have an opportunity next week because the President has come before us and asked for another $87 billion--put it on the charge card. No, this $87 billion has to be paid for. We have to start getting back on track. The President, in his latest estimates, tells us that revenue as a percentage of gross domestic product is going to be at its lowest level since 1950. You will recall one of his major justifications for the tax cuts 2 years ago was that revenue was at a record percentage of gross domestic product. Now we are headed for a record low, in terms of revenue, and his answer is the same: Cut revenue more. It doesn't matter what the question is, the answer from this President, from this administration, is the same: Cut the revenue. If revenue is high, cut it. If revenue is low, cut it some more. It is not just a question of revenue being low, it is also a question of spending being increased. This chart shows, for this year, 92 percent of the increased discretionary spending is in just three categories: Defense, which accounts for the vast majority of it; homeland security, which is the second biggest chunk; and the third biggest chunk is rebuilding New York and providing relief for the airlines, so badly affected by what has occurred. So we have not only the lowest revenue since 1950, we also have increased expenses for defense, homeland security, rebuilding New York. Of course, all of us support those increased expenditures in order to meet the obligations the country has taken on under this President. The President is fond of saying, ``It's the people's money.'' This is a place where I agree with the President absolutely. It is the people's money, he is absolutely right about that. This is the people's money. But what the President has left out is that it is also the people's debt. What he is running up here is a debt that is truly massive in scope. This looks at the gross debt of the United States. Earlier we were talking about the publicly held debt. But if you look at the gross debt, not only what we owe those who have loaned money to the United States--which, by the way, includes a lot of money from Japan and Europe--we also see that we owe money to ourselves. We owe money to the Social Security trust fund that the President has been taking money from in order to float this boat. That is truly stunning. We have a gross debt of $6.8 trillion at the end of this year. But look at what is going to happen in the next 10 years. We are going to have a gross debt approaching $15 trillion. That is 15,000 billion dollars. That is real money. And all of this is happening at the worst possible time. Why the worst possible time? Because, as this chart shows right now, the green bar, which is the Social Security trust fund, the blue bar which is the Medicare trust fund, are running surpluses in anticipation of the retirement of the baby boom generation. Unfortunately, the money is not being used to prepare us for the retirement of the baby boom generation. The money is all being taken and spent on the operating expenses and to pay for the President's tax cuts. That is where the money is going. Not to prepare for the retirement of the baby boom generation. The red part of these bars is the cost of the President's tax cuts. What one sees is, when the trust funds go cash negative, which happens in the next decade--in fact, it begins to happen pretty soon because in 2008 the leading edge of the baby boom generation starts to retire. Look at what happens when those trust funds go cash-negative at the very time the cost of the President's tax cuts explode, dragging us deeper and deeper into deficits and debt. This is utterly unsustainable. It is leading us to a crash landing. You don't have to take my word for it. Here is a report from the New York Times of September 14 reporting on the Congressional Budget Office's warning to all of us here in Congress. Let me quote from the New York Times: This course-- the fiscal course that the President has embarked upon-- prompted the Congressional Budget Office to issue an unusual warning in its forecast last month: If congressional Republicans and the administration get their wish and extend all of their tax cuts now scheduled to expire, and if they pass a limited prescription drug benefit for Medicare and keep spending at its current level, the deficit by 2013 will have built up to $6.2 trillion. That is not the gross debt. That is the publicly held debt--$6.2 trillion. That is 6,200 billion. They go on to say: Once the baby boomers begin retiring at the end of this decade, that course will lead either to drastically higher taxes, severe spending cuts, or ``unsustainable levels of debt.'' That is the course we are on. That is the course the President has put us on. It is a disastrous course by any judgment. Again, we have heard from the Congressional Budget Office. By the way, the head of the Congressional Budget Office used to be on the President's budget team, his Council of Economic Advisers. He came from the White House. You don't have to just listen to me or to him. Here is the Comptroller General of the United States, David Walker, in a speech on September 17 to the National Press Club. He said in that speech: The ultimate alternatives to definitive and timely action are not only unattractive, they are arguably infeasible. Specifically, raising taxes to levels far in excess of what the American people have ever supported before, cutting total federal spending by unthinkable amounts, or further mortgaging the future of our children and grandchildren to an extent that our economy, our competitive posture and the quality of life for Americans would be seriously threatened. This is the Comptroller General of the United States put in place by the bipartisan leadership of Congress warning us that the course the President has us on is a disastrous course. We don't have to just listen to the head of the Congressional Budget Office, or have to listen to the Comptroller General of the United States. We just have to look at what has happened. We all can look and we can read reality tests. Does it make sense? Two years ago, the President told us we could have it all. The President said we could have massive tax cuts. He told us we could save Social Security and Medicare without touching the trust funds. He said we could have maximum paydown of the debt. He said we could have a big defense buildup. He said we could do it all. He was wrong. He was wrong by a country mile. He was wrong on each and every count--not protecting Medicare and Social Security. He is taking every dime of the Social Security trust fund surpluses for the entire rest of the decade. He said we wouldn't have deficits. We have record deficits. He said he would virtually pay off the debt. The debt is exploding. The President is taking us down a course that does not work. Most recently, he told us: It is important for you all to understand, for our fellow Americans to understand, the tax relief I have proposed--and will push for until enacted--will create 1.4 million new jobs by the end of 2004. We are not at the end of 2004. So we can't make a judgment on that. But we can look back at 2001. In 2001, he made the same kind of claim. He said if you pass his plan, which we did, it was going to generate millions of new jobs. Wrong again. He hasn't generated millions of new jobs. He has lost millions of jobs--3.3 million jobs lost by August 2003 since this President took office. That is the worst record on jobs since Herbert Hoover. No other President of either party has lost private-sector jobs during their entire term since the Great Depression. This President has lost 3.3 million jobs with his economic plan. Once again, he is wrong--just wrong. He is just wrong in assertion after assertion after assertion. He is just wrong. That is the hard reality we have to cope with. If we look at this recovery that is underway--and there are signs of economic recovery, which one would expect--if you go and write $700 billion of hot checks in a year on the Federal accounts, you expect to give some lift to the economy. By spending all of this additional money, all of these tax cuts, you would expect the economy to improve, and it is improving. But we are not seeing much pickup in jobs. We charted the last nine recessions which have occurred since World War II--the job recovery that occurred during the recovery from those recessions. Here is the trend line that we see: In each of those nine recessions, there has been a good pickup in jobs when the economy started to recover. Here is the pattern in this recovery. This is like a dead cat bouncing. Nothing is happening. Jobs are not being recovered. Jobs are still being lost, and the President told us he had a plan, he had a strategy that was going to bring back jobs--millions of jobs, he said. He was wrong. Now some are saying deficits don't really matter. It is really quite stunning to hear some of our Republican colleagues, who for years believed deficits did matter, all of sudden completely change course and say deficits don't matter. The Chairman of the Federal Reserve Board believes deficits matter. Here is what he said before the Senate Banking Committee: There is no question that as deficits go up, contrary to what some have said, it does affect long-term interest rates. It does have a negative impact on the economy, unless attended to. Again, we didn't need to just listen to the head of the Federal Reserve Board. Hear what the head of the Congressional Budget Office said in testimony before the Budget Committee earlier this month. He said: To the extent that going forward we run large sustained deficits in the face of full employment, it will in fact crowd out capital accumulation and otherwise slow economic growth. This is the testimony of Mr. Holtz-Eakin who was, again, put in office by the Republicans who control both Chambers, and came from the President's own economic advisors saying that deficits do matter. They do hurt economic growth in the long term. Again, I go back to the Comptroller General and his outstanding speech to the National Press Club on September 17. The ``bottom line'' is, there is little question that deficits do matter, especially if they are large, structural and recurring in nature. In addition, our projected budget deficits are not ``manageable'' without significant changes in ``status quo'' programs, policies, processes and operations. I don't know exactly when this Congress is going to awaken to the threat that is barreling down on us, but we face a circumstance just as clear as it can be: The largest deficits in our history in dollar terms, by far. Deficits as a percentage of GDP fairly measured that are the largest since World War II and no relief in sight. Instead, deficits as far as the eye can see, massive deficits that are coming at the worst possible time, right before the baby boomers retire, right when we should be paying down debt or prepaying the liability. Instead, we are taking the money, hundreds of billions of dollars; in fact, over $2 trillion of Social Security surpluses alone over the next decade the President proposes taking to spend on other operations in government. That is $2.4 trillion of Social Security money, taking every dime. Not just this year, not just next year, but every year for the next decade. Two years ago the President told us we could expect nearly $6 trillion in surpluses over the next 10 years. In just 2 years that has turned into $4 trillion, $4,000 billion of deficits. Where did the money go? Here is where it went: 39 percent went to the tax cuts the President proposed and pushed through Congress; 28 percent went to increased spending, largely, as I indicated earlier, defense and Homeland Security; 7 percent went to the economic downturn; 27 percent in revenue shortfalls not associated with the tax cuts. So two thirds of the disappearance of the surplus in the move to deficits is on the revenue side of the equation. That is where the money has gone. Some are saying, we do not have to worry about this; we will grow our way out of it. Here is what the Comptroller General of the United States said, again in a speech to the National Press Club: [T]he consensus opinion at a recent meeting of prominent economists representing a wide variety of ideological viewpoints was that . . . ``we cannot simply agree our way out of this problem.'' It is time to face up to reality. It is time to face up to the fact we have again down a course that is not working. I am not casting aspersions on anyone's intentions or motivations. That does no good. But we can now look back at the President's record objectively and clearly. We can see that statement after statement he has made to this Congress was simply wrong. He said there would be no deficits. We have record deficits. He said they would be small and short-term. They are massive and unending. He said they are small as a percentage of our gross domestic product. They are the biggest they have been since World War II as a percentage of gross domestic product, fairly measured. The President said this would all create jobs. He said it would create millions of jobs. Millions of jobs have been lost. Now he says he needs another $87 million that he does not want to pay for. Where is the money going? We have heard a number of presentations this morning: 500 experts, at $200,000 each, to investigate crimes against humanity in Iraq. Let me repeat that. Here we are in the deepest deficit, in debt at the worst possible time, and the President says one of the things we should do is get us 500 experts at $200,000 each to investigate crimes against humanity. I am all for investigating crimes against humanity, but I am all against spending $200,000 each for 500 people in one year to investigate crimes against humanity in Iraq. Have we completely taken leave of our senses around here? He wants to build prisons over there at $50,000 a bed. He wants to have a witness protection program that will provide $1 million per family. Yes, it is there. Read the Washington Post: A witness protection program for families of five, 100 families of five, at $200,000 each in the family, five people, $200,000 each, and that is $1 million for 100 families, for a total of $100 million. We do not have a witness protection program like that in this country. Let's get serious around here. We are in disastrous deficit and debt and we are talking about these kind of expenditures in a country that has the second largest oil reserves in the world, and we say, ``Just put it on the debt of the American people''? I don't think so. There has to be a better way. I yield the floor and suggest the absence of a quorum.

Mr. CONRAD. The Senator has mentioned that the President has come before us and asked for $21 billion to reconstruct Iraq. In addition to that, the President is saying there is another $40 billion to $50 billion of needs next year for the reconstruction of Iraq that is supposed to come from someplace else. The President and his people have said some of these other countries are going to contribute. Is the Senator aware of this additional $40 billion to $50 billion of money for reconstruction of Iraq that the President has identified?

Mr. CONRAD. Will the Senator yield for a question?

Mr. CONRAD

Mr. CONRAD. Mr. President, I commend the leadership of the Appropriation Committee, and particularly subcommittee Chairman Domenici and Senator Reid for their work on this bill. I bring to the chairman's attention a troubling problem we have in North Dakota around Lake Sakakawea, a reservoir controlled by the U.S. Army Corps of Engineers. As water levels drop, more of the land around the lake owned by the Corps becomes exposed, which is a perfect habitat for noxious weeds. In fact, an additional 140,000 acres have become exposed due to low water levels causing explosive growth. The spread of noxious weeds is directly impacting farmers, ranchers, and other landowners in the vicinity of Lake Sakakawea. These landowners are responsible for controlling noxious weeds on their land; however, their efforts are futile when their land can be easily contaminated from weeds on Corps land. Unless the Corps has more resources to fight the noxious weeds, landowners will continue to face an uphill battle.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise to support the position of the chairman of the Budget Committee. The deficit for next year is now calculated to be over $530 billion. That does not count the $160 billion that is going to be taken--every penny--from the Social Security trust fund surplus. Now we are talking about an operating deficit of $697 billion. And we are acting as though nothing has changed. Something has changed. This country is digging a deep hole. I agree that NIH is underfunded. I would love to support additional money for NIH. But it is not there. It is not in this budget. It wasn't in the budget which I offered my colleagues and which the vast majority of Members on our side voted for. If we are going to be declaring emergencies on appropriated accounts where there is nothing that wasn't intended, there was nothing unanticipated, then we could just take the whole budget process and throw it out the window and abandon all discipline. This is a mistake, I say to my colleagues. It is a mistake tonight to declare an emergency where no emergency exists. I urge my colleagues to support the chairman of the Budget Committee.

Mr. CONRAD. Will the Senator yield?

Mr. CONRAD

Mr. CONRAD. Mr. President. I am very pleased to join my distinguished colleague and the minority leader as a cosponsor of an amendment to increase funding for the Rural Education Achievement Program (REAP). No Senator has been a stronger advocate on behalf of rural schools and supporter of REAP. The amendment would increase REAP funding by $132 million, bringing appropriations for the program to the authorized funding level of $300 million under the No Child Left Behind Act. As my colleagues are aware, the Senate Appropriations Committee reported a Labor-HHS bill that funds REAP at a level of $167.6 million for fiscal year 2004, the same funding level as fiscal year 2003. The House Labor-HHS appropriations bill, H.R. 2660, includes $170 million for REAP. I am especially grateful to appropriators in both the House and Senate for funding rural education, especially since the Administration failed to recommend any funding for REAP in the fiscal year 2004 budget. While I am pleased with action by Senate appropriators to provide $167.6 million for REAP, the recent enactment of the No Child Left Behind Act has made clear the critical need for additional grant assistance for smaller, rural school districts. Historically, rural school districts receive a smaller percentage of federal education dollars because of their inability to compete as effectively for funding as larger urban or suburban districts are able to do. Additionally, the geographic isolation of many smaller, rural schools, many of which also have declining enrollments, a very limited tax base and significant transportation costs, makes it more difficult to find the resources to provide certain educational opportunities for students. As my colleagues may recall, Senator Susan Collins and I introduced legislation to authorize the Rural Education Achievement Program during the 106th Congress. At the time, we were very concerned that many smaller, rural districts did not have the resources or staffing to compete effectively for many of the Department of Education competitive education grant programs. Additionally, in cases where rural school districts received formula allocated funds based on student population or other criteria, the funding was minimal and there was no flexibility to enable local school officials to more effectively use the limited funds to help improve student achievement or professional development. The REAP program was enacted late in the 106th Congress and initially funded at a level of $162.5 million in fiscal year 2002. Under the REAP program, two small, rural schools programs were authorized. The Small and Rural Schools Achievement Program is a formula grant program that authorizes grants directly from the DOE to eligible school districts. The districts eligible under this program must have an average daily attendance of 600 students or less and be designated by the National Center for Education Statistics, NCES, with a locale code of 7 or 8. Under the Small and Rural Schools Achievement Program, school districts are permitted to consolidate new formula allocated funds under teacher quality, local technology, safe and drug free schools, and innovative programs. The consolidated funds may be spent on any of the preceding programs or Title I, Part A, language improvement and after school programs. Under the Rural and Low-Income Schools Program, funding is competitive and school districts may apply directly to DOE. School districts must have an NCES local code of 6, 7, or 8 and have a census poverty rate of 20 percent. Funds may be sued for teacher recruitment, professional development, parental involvement, Title I, Part A, bilingual education or Safe and Drug Free Programs. The REAP program is very important for smaller, rural schools, especially with the new requirements for testing and professional standards under the No Child Left Behind Act. Approximately 80 percent of schools in North Dakota are eligible for REAP funding. I know from a Budget Committee hearing that I chaired last week on implementation of the No Child Left Behind Act and conversations with rural school officials in North Dakota that the $1.2 million in REAP funding that went to North Dakota last year helped 117 school districts meet some of the challenges under the new Act. Funds were used for professional development for teachers, to provide distance learning opportunities to assist with the purchase of computer equipment for classrooms. Unfortunately, Mr. President, funding in the fiscal year 04 Labor, HHS bill for No Child Left Behind including for rural education, is not adequate. Although S. 1356 provides $23.6 billion for DOE education programs, the bill provides $8.4 billion less than the authorized level in fiscal year 04 for No Child Left Behind, including $132 million below the authorized level for REAP. Without question, we are not fulfilling our responsibility to provide adequate funding to states and local school officials to help communities achievement the goals under NCLB. REAP is an essential program under NCLB, and I hope that my colleagues will support the Daschle amendment to fully fund rural education at the $300 million level.

Mr. CONRAD

Mr. CONRAD. Mr. President, I want to take a few moments to comment on the trade legislation we are considering and our trade policy more generally. Let me start by saying that I intend to vote in favor of the implementing legislation for both the Singapore and Chile free-trade agreements. In both cases, the agreements will provide commercial benefits to the United States, removing barriers to the exports of our goods and services. Both Singapore and Chile have relatively advanced economies, with relatively strong environmental and labor protections, so the risk of American manufacturing jobs relocating to these countries is small. In short, Chile and Singapore are the sorts of partners we should be seeking out if we are going to negotiate free- trade agreements: partners who are chosen because they can provide complementary commercial opportunities, not partners who are chosen primarily for political, not economic, reasons. In particular, the Chile Free-Trade Agreement will provide export opportunities for North Dakota agriculture. Ever since the idea of a Chile FTA was first broached more than a decade ago, I have insisted that any agreement must result in the removal of Chile's price bands that have served to limit our wheat exports. This FTA accomplishes that long-held goal. In addition, it levels the playing field with our leading competitor for export sales to Chile. Currently, Canadian wheat exports enter Chile tariff free, but U.S. exports face a 6 percent tariff. This agreement will eliminate the tariff disadvantage our wheat exports currently face and allow us to recapture Chilean export sales we have lost to Canada in recent years. I would also like to comment briefly on the sugar provisions of the Chile FTA. These provisions were carefully crafted to ensure that Chile could not import sugar to meet its domestic needs and then export its entire domestic production to the United States. In particular, the agreement provides preferential tariff access to Chilean sugar only if and to the extent that Chile is a net exporter of specified sugar products. All other Chilean sugar will be subject to MFN tariff rates. During the Finance Committee's informal consideration of the implementing legislation, I posed a number of questions to Ambassador Zoellick to ensure that the Senate had a full understanding of how these provisions work. However, important as these provisions are, they cannot serve as a model for other FTAs that the administration is negotiating or considering. Frankly, Chile is a tiny producer of sugar, and it is extremely unlikely that it will ever be a net exporter of any significance. But the same is not true for Australia, Central America, South Africa, or Thailand, all of which are being considered for FTAs. The Chile provisions, if they were included in these other agreements, would devastate our sugar industry. U.S. producers are highly efficient, and U.S. consumers enjoy some of the lowest prices in the developed world. The fact is that sugar is one of the most distorted commodity markets in the world, with subsidies, protected markets and all sorts of nontariff, nontraditional barriers to free trade. Unless we address these issues on a global basis and eliminate these distortions, I fear that these FTAs will wipe out our efficient sugar industry to the benefit of less efficient, highly subsidized producers in other countries. More generally, I am concerned that these FTA partners are being chosen primarily on the basis of political and foreign policy calculations rather than on the basis of potential economic benefit to this country. In my view, that is a profound mistake. There has been bipartisan agreement in the Congress that the top priority for U.S. trade policy should be leveling the playing field in agriculture. However, the administration's pursuit of these bilateral FTAs threatens to undermine that goal. Australia, Central America and Thailand are simply not going to be huge markets for U.S. agricultural goods. But imports of sensitive products from these countries could have a devastating impact on important U.S. agricultural commodities. Put simply, there is very little upside to these agreements for U.S. agriculture, and a lot of potential downside. Moreover, to the extent we are investing significant resources in negotiating these bilateral FTAs, we are diverting resources away from the WTO agriculture negotiations, which should be our primary focus. Only by addressing the market access barriers and inequities in domestic support on a worldwide basis can we be sure that U.S. agriculture will achieve the level playing field and access to growing markets that it needs to thrive in the 21st century. Finally, I share the concerns of many of my colleagues about the disappearance of U.S. manufacturing jobs and the hollowing out of our industrial base. As we look forward to trade negotiations with the low- wage nations of Central America and Thailand, we must tailor the labor provisions of these agreements to fit local conditions so that we do not allow exploitative conditions that give these countries an unfair advantage over U.S. businesses. In conclusion, I support these agreements. They will provide modest economic benefits to our country. But they cannot and should not serve as one-size-fits-all models for future bilateral FTAs. Future agreements must be constructed very carefully, taking into account the strengths and weaknesses of our various trading partners, to ensure that they provide commercial benefits to U.S. agriculture, services, and manufacturing. I ask unanimous consent to print the following information in the Record from questions I submitted to Ambassador Zoellick.

Mr. CONRAD

Mr. CONRAD. Mr. President, we are in this very odd circumstance where we are waiting to learn what the decision will be with respect to the Energy bill. As one member, I send a message to those who are deliberating that if the best we can do is pass last year's bill, let's do it. We have a circumstance in which our energy dependence continues to grow. We are now more than 50 percent dependent on foreign sources of crude oil. That makes America vulnerable. While last year's bill is not perfect, it did have broad bipartisan support and clearly will improve the energy situation in this country. I believe last year's bill passed on a vote of 88 to 12, or very close to those numbers. It received long and careful attention on the floor. I believe there were over 140 amendments considered. I believe there were over 30 rollcall votes. I think there were actually 35 rollcall votes on that bill. We spent weeks deliberating the provisions of the Energy bill last year. I would be the first to say I would prefer that we had concluded work on the Energy bill this year. I, for one, don't know why we wound up spending hours and hours talking about judges and engaging in what last night I thought was a very ugly scene on the floor of the Senate. Frankly, I was embarrassed for the Senate, to watch some of the statements being made last night. That did not reflect well on this body. There should not be a religious test in any way for any position in the United States of America. This is a country dedicated to religious freedom. Whether people choose to be actively engaged in a church or not should play no role in the consideration for positions of responsibility in this country. Thomas Jefferson, who played such a critical role in the formation of our Nation and its institutions, had written on his gravestone what he believed were his greatest accomplishments. One of those was the religious freedom that was part of the Constitution of the State of Virginia, a commitment to religious freedom which he thought was fundamental to the United States. I hope cooler heads are going to prevail when we return in September and we are not going to see the kind of personal invective that infected this floor last night. That was an ugly scene. That is not the road we should go down as an institution. It is not the road we should go down as a country. We can have a strenuous debate on candidates for judges. We do not have to slip over into a discussion of religion or who is a good Catholic or who is not so good a Catholic. My goodness, what is going on around here? That is not the Senate. Returning to the Energy bill, we have an obligation. We have an obligation to reach a conclusion and, if the vehicle that allows us to reach a conclusion is the bill that was passed last year, let's do it. Let's do it on a bipartisan basis. Let's do it now. That bill had a lot of good and productive provisions in it that will make a meaningful difference over time. No, it is not a perfect bill. It is the product of compromise. That is what this system is about. We do not all get our own way. None of us gets our own way. But if we work together, we can make meaningful progress. I think last year's bill represents that. I urge my colleagues, we are not going to complete the bill that was out here. There are still hundreds of amendments pending. I have amendments pending on that bill. I have amendments pending I would like to have considered that I think are serious, productive amendments. But I am willing to forgo the opportunity to offer those amendments to get a bill passed. When we get to September we are going to have appropriations bill after appropriations bill demanding our attention. The end of the fiscal year comes at the end of September. I plead with my colleagues on both sides, let's end this session on a productive and bipartisan note. Let's end the squabbling and the personal invective that has infected this body in the last 48 hours. It is not healthy. It is not productive. It does not build momentum for the work that faces us in the fall. Let's get back to attempting to produce legislative outcomes that are positive for this country and that reflect well on this body. We have an opportunity to do it. I say to my colleague from Vermont, who has deep feelings about energy policy and environmental policy, and has been a leader in this body on these issues, I say to him and others of our colleagues, please, let's come together and pass last year's bill and move it to conference and there try to improve it further. That strikes me as the only responsible course now remaining before us. There is no conceivable way we can finish work on the Energy bill that we have been contemplating. It is not going to happen. I believe it would be irresponsible to leave here without finishing action on a bill. We have a bill on which a tremendous amount of time was spent last year. It does improve the energy circumstance for this country and we ought to pass it. I hope somebody is paying attention. I thank my colleagues for listening. I hope we can move this ball off dead center and reach conclusion. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today in tribute to a brave volunteer of the North Dakota National Guard who this week made the ultimate sacrifice for his Nation. Specialist Jon Fettig was a proud and patriotic American killed in action in Iraq on Monday. He was many times over a volunteer, from when he made his commitment to America's Armed Forces by enlisting and re-enlisting in the National Guard, to when he stepped forward to serve in Iraq despite the fact that his own unit had not been activated. Jon Fettig is the first North Dakota National Guardsman killed in combat since the Korean war. Even before he volunteered to deploy to Iraq as a combat engineer with the 957th Multi-role Bridge Company he had already served 11 years in the Guard. His fellow soldiers admired him and valued his service. Those still at home in North Dakota gathered yesterday to celebrate his memory and mourn his passing. SP Fettig lived his life in a way that is surely familiar to many of my distinguished colleagues here in the Senate. As Senators we are blessed with the opportunity to meet countless fine young Americans who serve our Nation in the military. Like so many National Guardsmen, SP Fettig was a good soldier, a good civilian employee, a good citizen and a good spouse. That he carried all those burdens at once is a tribute to him. In this difficult time, our thoughts are with his father Larry, his mother Shirley, and his wife Cody. SP Fettig's sacrifice is a tragedy, but we all must take comfort from the fact that, as his father has said, he died doing what he loved, a hero serving his country to the best of his ability. Specialist Brandon Erickson of Bismarck was another casualty of Monday's attack on the 957th, bringing to three the number of North Dakota soldiers wounded in combat in Iraq. Though SP Erickson has had part of his arm amputated, his condition is now improving. We are grateful for his service and that of the medics and doctors who treated him, and thankful that he will soon be returning home. Our Nation asks so much of our Guard and Reserve, and they are coming through with flying colors. The tremendous contribution of North Dakotan active-duty personnel is matched by a truly remarkable commitment by North Dakota's reservists. Per capita, no State has more citizens in the National Guard, and today no State has more Guard personnel mobilized. According to the Associated Press, 36 of every 10,000 North Dakotans age 18 or older served on active duty with the Guard or Reserve during this conflict. Eight hundred members of the North Dakota Army National Guard are still deployed in Iraq. Nearly every city and town in my State has felt the impact of an Army National Guard unit activation, including Fargo, Lisbon, Bismarck, Grand Forks, Edgeley, Grafton, Devils Lake, Rugby, Bottineau, Wishek, Cando, Carrington, Mayville, Oakes, and Wahpeton. And the loss of SP Fettig, whose family lives in Dickinson, brings home the fact that many volunteers from units in other communities stepped forward to fill vacancies in units deploying overseas. Now some of these communities are further scarred by their losses. Today, millions of people across Iraq and America are hearing the news of the death of the two brutal sons of Saddam Hussein, fully complicit in the crimes of his regime. Hopefully this victory will help us along the road to true peace and stability in Iraq. But there are surely still many tough days ahead. The success of this difficult work depends on the commitment and sacrifice of thousands of individuals like SP Fettig, men and women willing to give their all for the good of their Nation and their world. To all those who serve, I offer my heartfelt thanks. To the friends and family of Jon Fettig and all those whose service extends to the ultimate sacrifice, I can only offer the condolences, thanks, and prayers of a grateful Nation.

Mr. CONRAD

Mr. CONRAD. Mr. President, the day before yesterday we saw an announcement of the biggest deficits in the history of the country this after the President told us just 2 years ago that we did not need to worry about future deficits; in fact, there were going to be massive surpluses. He said in a speech on March 27, 2001, when he was campaigning for a massive tax cut: Tax relief is central to my plan to encourage economic growth, and we can proceed with tax relief without fear of budget deficits, even if the economy softens. This is what the President told the country. It has proved to be totally wrong. These are now the biggest deficits we have ever had in the history of the country, $455 billion, and that understates how big these deficits really are. Just using that number, which the administration has put out, is by far the biggest deficit we have ever had. The previous record was $290 billion. So this is a very large deficit by any measurement. The President then told us the next year, after it became clear that his earlier statements were not correct, that: . . . our budget will run a deficit that will be small and short-term . . . Well, that has proved to be wrong again. These deficits are not small, and they are not short term. In fact, these deficits are of record size and we see no end to them. By the administration's own analysis now, we see no end to these deficits. This chart shows the portrayal of deficits over the last 30 years, and one can see that the deficit this year is the biggest of all time. Look at the trajectory, which is truly stunning. We have gone from surpluses that we ran for a 3- or 4-year period to this extraordinary rise of the deficit. Still the administration is trying to downplay its significance. Earlier this year, the then-OMB Director said: I think . . . that at today's levels of 2 to 3 percent of

Mr. CONRAD

Mr. CONRAD. I say to the Senator, I have not said anything for weeks on this issue, but with each passing day I become more concerned about the credibility of our Nation. When a policy is announced of preemptive strike, something we have never done before in our country's history--I remember going to grade school and being taught that America never attacked first, but if somebody attacked us, we countered and we always won. That was what we were taught growing up. I was proud of it. I was proud that America never attacked first. Now the world has changed. I would be the first to acknowledge the world has changed. I can see a role for preemptive strike in a world where weapons of mass destruction do exist in order to prevent catastrophic loss to this country. But we better be very certain before we launch an attack on another nation that that attack is justified and that, in fact, that nation represents an imminent threat because, if we start attacking nations and we cannot prove our assertions, very quickly the rest of the world is going to doubt our word, our credibility, and our basic goodness as a nation. Now, that is serious business. The fact is, this administration told the world Iraq had weapons of mass destruction; that they were trying to develop nuclear capability; that there was a connection to al-Qaida. Each and every one of those claims now is in question. It is not just 16 words in the State of the Union. It is far more serious than that. For the President, the day before yesterday, to compound it by saying he attacked Saddam Hussein because he did not permit U.N. weapons inspectors in that country is false on its face. We all know the weapons inspectors were there. We all know they were going site to site trying to find weapons of mass destruction. The question of whether or not they were effective or not is another question but to assert to the world that we attacked Iraq because there were not inspectors there, I am afraid it makes us look as though we are not very careful with our claims. (The further remarks of Mr. Conrad are printed in today's Record under ``Morning Business.'')

Mr. CONRAD. Yes.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Madam President, I thank my colleagues for raising these important issues. I am going to take the first few minutes of my 30 minutes to talk on what has been discussed this morning because I think it is so important to the country, and then I will turn to another subject. I have not previously spoken on these issues on the floor because my primary responsibility in the Senate is representing the State of North Dakota, and I have special responsibility for budget issues in my position as ranking member on the Budget Committee and as a senior member of the Finance Committee for matters that relate to Social Security and Medicare and the financing of the U.S. Government, and, of course, in my role on the Agriculture Committee dealing with questions of agricultural policy. I am not on the committees that deal with foreign policy and defense policy. All of us have a responsibility to speak out when we believe the country is headed in a wrong direction. I believe the President is taking us down a road that is fraught with real danger for the country. The President asked this Congress--the Senate and the House--for authority to launch a preemptive attack on another nation, an attack before that country had attacked us or attacked any of our allies. In fact, Iraq had not engaged in an attack on anyone for more than a decade. The President told us and told the world that they, Iraq, represented an immediate and imminent threat to America. I personally believe there may be a place for preemptive attack in protecting the American people. I believe if we have clear and convincing evidence that a country represents an imminent threat to our people, we have a right to act first, especially in a world where weapons of mass destruction do exist, to prevent catastrophic loss to our Nation. When we launch a preemptive attack on another country, we had better have it right. We had better make certain that what we are saying and telling the world is correct. This President and this administration told the world and told this Congress that Iraq had weapons of mass destruction. There were many reasons to believe that statement, but now the harsh reality is, those weapons of mass destruction have not been found. This administration and this President told the Congress and told the world that Iraq was trying to develop a nuclear capability, and they gave as their best evidence that Iraq was seeking to buy uranium from Niger. That has proved to be wrong. The President told the world and told this Congress that there was a clear connection to al-Qaida, and repeatedly we were told the best evidence was there was a terrorist camp in Iraq training al-Qaida operatives. Now we learn that camp was in a part of Iraq not controlled by Saddam Hussein but controlled by the Kurds. The day before yesterday, the President made the most astonishing statement of all. In the Washington Post, the President is quoted as saying that he attacked Iraq because Saddam Hussein would not permit the U.N. weapons inspectors into the country. I do not know if the President was misquoted. I have seen no attempt to correct the record. I said nothing about this yesterday because I hoped that the White House would say the President was misquoted. There has been no attempt to correct the record. We all know the weapons inspectors of the U.N. were in the country. They were in Iraq. They were going site to site trying to determine if there were weapons of mass destruction, trying to determine if there was a nuclear program underway in that country. For the President to now say he attacked Iraq because they would not permit inspectors absolutely stands the facts on their head. The inspectors were there. The reason the inspectors left is because we were threatening to attack Iraq. So saying that Saddam Hussein did not permit inspectors in as a rationale for war is mighty thin. We have a fundamental problem of the credibility of the Nation. Our country told the world a set of assertions, one after another, that have proven to be wrong or have proven not to be demonstrably the case. That puts our country's credibility at risk. When we are talking about attacking other nations preemptively, as I said in the beginning, we better make certain we have it right because if we start going around the world attacking countries and cannot prove our assertions that they represented an imminent threat to us, then I think America is in very serious risk of alienating the world community. That is not in our interest.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise in support of Joshua Bolten as Director of the Office of Management and Budget, and to urge Mr. Bolten to do everything within his power to help put the Federal budget back on sound footing. The position of OMB Director is always one of the most demanding posts in our Government, but it is especially so right now. The tax cuts pushed through by the President over the last 2\1/2\ years, combined with the continuing economic slowdown and increased spending to respond to the September 11 terrorist attacks and prosecute the military efforts in Afghanistan and Iraq, have pushed the budget deep into deficit. And despite the fact that we desperately need to get our fiscal house in order to be ready for the imminent retirement of the baby-boom population, this administration and its allies in Congress have not yet accepted that the policies they have advocated are leading us in the wrong direction. I support the nomination of Joshua Bolten as OMB Director because I believe he is a very capable and honorable man, with a distinguished record both in public service--including service as a Senate staffer-- and in the private sector. I sincerely hope he will take to heart the duty of the OMB Director to be an advocate for fiscal responsibility-- to be willing to present the President with the facts where the budget is heading even if those facts are unpleasant, and to recommend policies to the President that will put the budget back on a sustainable path even if those policies may be politically difficult. In a written response to a question by the Governmental Affairs Committee, Mr. Bolten reiterated the position of the Bush administration about the deficits facing us, stating that: ``Our current deficit--as measured as a percentage of gross domestic product (GDP)--is not large by historical standards and is manageable within the overall context of our economy.'' I hope when Mr. Bolten assumes his post as head of OMB, he recognizes the reality of the budget situation and leads the administration to reassess that position. That reality is that the deficit we are currently facing is enormous by any standard. According to CBO, the total deficit will exceed $400 billion this year, more than $100 billion higher than the all-time record deficit of $290 billion recorded in 1992. As a percentage of GDP, the deficit will be about 4 percent, a level that has been reached only eight times in the 57 years since the end of World War II. More troubling, when Social Security is excluded from the calculation, this year's deficit is likely to total about 5.5 percent--a level reached only twice in the last 57 years. I hope Mr. Bolten accepts how serious the budget situation is and how important it is that we do not delay beginning to deal with the situation. I hope that he will advise the President to work with the Congress in a truly bipartisan way to reach agreement on and enact policies that will put the budget back on track.

Mr. CONRAD

Mr. CONRAD. Mr. President, the first amendment would provide immediate prescription assistance to certain chronically ill beneficiaries. We have a very curious circumstance. Under current law, Medicare Part B covers injectable drugs if they are routinely administered by a physician in the office. However, if a similar drug is available that could be self-injected at home, it is not covered. That makes no sense at all. This policy causes a significant burden for seniors with certain illnesses such as multiple sclerosis, rheumatoid arthritis, and other diseases. This amendment would address this problem by providing immediate coverage of drugs that could be administered at home when they are used to replace drugs that are covered when given in a physician's office. This transitional benefit would expire when a comprehensive Medicare drug benefit is implemented in 2006. I am proud to say I am working on this effort with Senator Murray of Washington, who has introduced similar legislation in bill form; Senator Smith, who is also on the Finance Committee, who has been a leading advocate of this approach; Senator Lincoln; and Senator Jeffords. It is supported by more than 40 patient organizations. This is a common-sense policy which provides real and immediate help to thousands of America's seniors. It is entirely paid for by codifying that Medicare is the secondary payer when beneficiaries have other private insurers that provide them with coverage. I hope my colleagues will look with favor on this amendment. Amendment No. 1020 The second amendment would address payment inequity that has hurt America's rural hospitals. As many know, rural health care providers are often forced to operate with significantly less resources than larger urban facilities. In my State of North Dakota, rural hospitals often receive only one-half the reimbursement their urban counterparts get for treating the exact same illness. For example, a rural facility in North Dakota receives approximately $4,200 for treating pneumonia, while a hospital in New York receives more than $8,500 to treat that same illness. The funding disparity is simply unfair and has placed many rural providers on shaky ground. To address this situation, MedPAC has recommended various policies, including equalizing the standard payment amount, which has been 1.6 percent higher for urban facilities. There is no policy basis for this difference. Earlier this year the omnibus appropriations bill took steps to equalize the standardized amount but only until the end of fiscal year 2003. This amendment finishes the job by making this change permanent. Again, this amendment is fully paid for by the legislation codifying that Medicare is the secondary payer when beneficiaries have alternative coverage. Amendment No. 1021 Finally, I am offering a third amendment that would address a disparity related to whether certain hospitals are eligible to be reclassified for the purposes of the in-patient hospital wage index. Under current law, hospitals have to meet certain mileage or proximity requirements in order to reclassify to the wage index value applied to another area of the State. In rural States such as North Dakota, this restriction has produced unfair, certainly unintended, consequences. In my State, there are hospitals on the western side of North Dakota which are hundreds of miles from the eastern side of the State but compete for the same labor pool--compete for the same doctors, the same nurses--and have the same costs. However, because of this mileage restriction, they are not able to get paid the same. In fact, there is an 18-percent difference in the wage index between hospitals in Bismarck, ND, and hospitals in Fargo, ND--an 18-percent difference. It makes no earthly sense. North Dakota hospitals have tried to address this situation by appealing to CMS on various occasions, to no avail. And the reason it has been to no avail is because the law says you have to be contiguous. Well, there is a 200-mile difference between Bismarck and Fargo, but they are in contiguous markets. They compete for the same doctors, the same nurses, and they need to be treated in the same way. This amendment would address this situation by allowing certain hospitals in my State to reclassify to another area of the State for purposes of the wage index. This change would be budget neutral. I urge my colleagues to support these three important amendments. Let me just say, if I can, to my colleagues, I am also working on a fourth amendment, the dialysis annual update formula. I am working on that with Senator Santorum and the chairman and ranking member. We are hopeful of being able to work out that amendment at a later point. Mr. President, these are the amendments I am seeking to have considered. amendment no. 1019

Mr. CONRAD. Mr. President, I appreciate very much the leadership Senator Murray has provided on this issue. I really took her legislation and, because I am a member of the Finance Committee, I had an opportunity to offer it. But I want to make clear, this is a bill Senator Murray introduced. I was proud to pick it up in the Finance Committee so it could be offered at the appropriate time there. I thank her for her leadership. I think we are close to getting this accomplished. It will be a great tribute to the Senator from Washington and the legislative leadership she has provided.

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

Mr. CONRAD. Mr. President, I say to my colleague who is seeking to also introduce amendments, I will be very brief. I rise to offer three amendments to the Prescription Drug and Medicare Improvement Act. I send the three to the desk.

Mr. CONRAD

Mr. CONRAD. Mr. President, I would object to that because I don't want to be taken off my feet when I am finishing the presentation on our amendment. It is going to take me more than 2\1/2\ minutes, so I object to that.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Mr. President, I rise to speak on the amendment of my colleague from Arkansas. This is an amendment we brought up in the Finance Committee.

Mr. CONRAD. Mr. President, as I stated earlier on the Senate floor, I believe the bill before us is a step in the right direction. It provides much-needed and long-awaited prescription drug assistance to Medicare beneficiaries across the Nation. I commend Senator Grassley and Senator Baucus for putting this proposal together. But while I support this effort, I also recognize its shortcomings. I think one of the biggest weaknesses of this bill--other than the fact that it is not the kind of full prescription drug plan that many had hoped for because there are not sufficient dollars to support such a plan--is the fact this underlying legislation has too much instability. It creates confusion. We could have a senior being in four different plans in 4 different years. And if there is anything I think we know, it is that seniors want certainty. They want to know what they are getting. But under this plan, seniors could be bounced back and forth between different plans, depending upon how many private drug-only plans enter an area. That is the first problem. If a senior is in a fallback plan and two private plans enter the area, they will be forced to leave a plan they may like, and they have no choice in the matter. The second problem is, every time they switch between drug-only and fallback plans, their benefits could change. This chart demonstrates that uncertainty. Premiums are uncertain. Deductibles are uncertain. The coinsurance, coverage gap, the covered drugs, and even access to local pharmacies with no extra charge--all of those things are subject to change. The third issue is this very ability isn't just a problem that could occur when a senior goes from a drug-only plan to a so-called fallback plan. It could also happen if seniors go from one fallback plan to another. When you add this all up, this is the type of situation a senior could face, as shown on this chart. The Senator from Arkansas earlier used this chart. It shows what could happen to a senior being in four different plans in 4 different years, with different premiums, with different copays, with different formularies--that is, different drugs being covered--with different rules with respect to whether they can use their local pharmacy without additional cost. All of these are subject to change from year to year. Every one of these--the premiums, the deductibles, the coinsurance, the coverage gap, the drugs that are covered--is subject to change. That is not the circumstance we want to construct for our seniors. In one year of this benefit, only one drug-only plan enters a region. A senior enrolls in the fallback plan to get drug coverage. In 2007, another private plan enters, and the senior is compelled to leave the fallback plan. Whether they like that plan or don't like it, they are forced to leave it. In the third year, we might see private plan A leave the program and the senior then be put in private plan B, again with different rules, with different copays, with different premiums, with a different coverage gap. And then again, if private plan B left the area, they could again be in a different fallback plan--four different plans in four different years. I am particularly concerned that rural seniors could face the situation I just described. To date, private plans have not had much interest in coming into those areas. Only 2 percent of rural counties had two or more Medicare+Choice plans in August of 2001. This amendment seeks to create more stability and to provide the kind of certainty our seniors want. I hope my colleagues will look upon this plan with favor. I ask unanimous consent that a letter from the National Council on the Aging endorsing this amendment be printed in the Record.

Mr. CONRAD. I would be happy to do that.