Kent Conrad

Mr. CONRAD

Mr. CONRAD. I ask unanimous consent for 1 additional minute.

Mr. CONRAD. I thank the Chair. I won't disappoint. I would like to respond to some of the arguments my colleague from Arizona made in his remarks because he referenced a number of matters which are mistaken. First, the Senator from Arizona said the current weakness in the economy is not a result of weak consumer demand. He then referred to numbers last year where for a couple of quarters consumer demand was good. Weak consumer demand is right at the heart of the weakness of this economy. Consumer demand in the first quarter of this year went up at 1.4 percent. That is tepid. That is weak. That is right at the heart of the weakness of the economy. In the last quarter of last year, consumer demand went up 1.7 percent. That is right at the heart of why this economy is weak. People have lost confidence, and they have lost jobs, and they are not buying. That is why companies aren't investing. Have we missed what has occurred? Our colleague said it is a capital problem, a lack of capital. That would suggest we have a lack of capacity in our manufacturing. That is not what we are seeing. The capacity of America is operating at 74.8 percent. That means 25 percent of the manufacturing capacity is idle. Why is it idle? Is it because of a lack of investment? Absolutely not. It is idle because there is a lack of demand. People are not buying. If we want to give a lift to the economy, we ought to strengthen consumer demand so they will buy from our businesses, so our businesses will have a reason to invest. We know we have overcapacity in telecommunications, in computer chips, and in area after area. The reason we have a tremendous bubble in markets is because overcapacity developed. That takes us to the plan before us. I believe the plan the President has put before us is ineffective with respect to dealing with the weakness in our economy. I believe it is fiscally irresponsible, and I believe it should be defeated. I believe the President's plan will actually weaken the economy further because it is going to explode the deficits and debt we see in this economy. Finally, the proposal is unfair because it is heavily weighted to the wealthiest among us. One of the assertions made by my colleague from Arizona was that our corporate taxes are very high in this country. They are not. On this chart is a comparison of taxes made by the Organization for Economic Cooperation and Development, which is the international scorekeeper. This looks to the most recent year for which they have full figures. For corporate income taxes as a percentage of gross domestic product, the average is right here, about 3\1/4\ percent. The United States is way down here on the chart. The suggestion that we have the second highest taxes on corporations next to Japan is just not so. It is just not so. The reason they come to the conclusion they do is they take our nominal tax rates--the tax rates that are in the law books--and forget to look at what actually happens when you start paying taxes: the deductions, the writeoffs, the ability to reduce your tax burden from what is in the law. Certainly, we all know what the tax rates are in the law. But that isn't what the corporations pay. In fact, corporations pay substantially less than that because of deductions, exclusions, and writeoffs. So the reality is that we are a relatively low cost tax jurisdiction when you compare us with other countries in the world. When we look at the question of stimulating the economy, I think this comparison is important. On this chart is Senator Daschle's plan. Here is the first-year cost and the 10-year cost, compared to what is before us in the Senate--called the Senate Finance Committee plan--and this is the House plan. You can see that in terms of stimulus, in terms of giving lift to the economy now, Senator Daschle's plan is far better, far stronger than the other competing plans. He has $125 billion of stimulus to the economy this year. The bill before us has $44 billion. The bill from the House has $48 billion in the first year. So they have very little lift to the economy in their plans. Let's think about it logically. We have a $10.5 trillion economy, and they are proposing giving a $45 billion, or $46 billion, or $48 billion lift--in a $10 trillion economy. Most economists say you have to at least have 1 percent of gross domestic product to 1.5 percent to have any significant effect. They are far short of that--less than one-half of 1 percent. They are not going to give any meaningful lift to the economy. Senator Daschle's plan is about 1\1/4\ percent of the gross domestic product. But, in addition to that, his cost over 10 years is much less. Their cost over 10 years is much more. Why is that important? Because we know we are already in record deficit and we know that if we follow the President's plan, the deficits are going to explode, leaving us in a totally unsustainable situation. Now, some have gone out and analyzed the effect on jobs of these various plans. Here is what they have found. Comparing the Democratic plan to the President's plan, they found that our plan gives about twice as much lift to the economy in the first year as does the President's plan. In the second year, it is about twice as much lift to the economy. But we do not have the negative long-term effect that the President's plan has. Some people may look at this and say, What negative effect could the President's plan have long term? Well, economists have studied his plan--including 10 Nobel laureates in economics--and they have said the President's plan is not an economic plan, not a job growth plan; it will hurt long-term economic growth; it will diminish job creation in the country because it is all financed with borrowed money. The deadweight of those deficits and debt is going to hurt our long-term economic condition. You know, it is interesting, the people hired by the White House to make these determinations came to that same conclusion. This is a group called Macroeconomic Advisers, hired by the White House to do macroeconomic analyses--our own budget office--and here is what they told us: The President's policy will give a short-term boost before 2004, and then it is worse than doing nothing. After 2004, look at what happens to economic growth under the President's plan, according to Macroeconomic Advisers. It gives a short-term boost right before the 2004 election, and then look at what happens to economic growth. It plunges, and you are better off for the long term having done nothing. How can that be? Here is what Macroeconomic Advisers--I didn't hire them, the White House did; the Congressional Budget Office hired them. Here is what they said, talking about the President's plan: Initially the plan would stimulate aggregate demand by raising disposable income, boosting equity values, and reducing the cost of capital. These are arguments our friends on the other side of the aisle have made. However, the tax cut also reduces national saving directly while offering little new, permanent incentive for either private saving or labor supply. Therefore, unless it is paid for with a reduction in Federal outlays, the plan will raise equilibrium real interest rates, crowd out private sector investment, and eventually undermine potential gross domestic product. That is not a plan that is an economic growth plan. It is a plan that will undermine long-term economic growth. It is not just economy.com and 10 Nobel laureates in economics, and it is not just Macroeconomic Advisers. Here is a group of 250 of the leading CEOs in America's Committee on Economic Development. They say the current budget projections seriously understate the problem of the growing deficits. They say while slower economic growth has caused much of the immediate deterioration in the deficit, the deficits in later years reflect our tax and spending choices. Deficits do matter. The aging of our population compounds the problem. I think they got it exactly right and the President has it exactly wrong. This is the chart that tells us what is happening to our budget deficits. This chart shows us that the deficits are skyrocketing. In fact, they will be between $500 billion and $600 billion this year. We have never had a budget deficit of more than $290 billion in our country's history, and we are heading for a deficit, on an operating basis, of over $550 billion. That is on an operating basis. To be fair, on an operating basis, I think the previous record deficit was $350 billion or $360 billion. So this is by far the biggest deficit, on an operating basis, we have ever had. It doesn't end anytime soon. The whole rest of this decade, we are running operating deficits, each and every year, of over $300 billion. Let's review the background of how we got here. You will recall that 2 years ago we were told by the administration we could expect almost $6 trillion in surpluses--$5.6 trillion in surpluses, we were told, over the next 10 years. Now we see, according to the CBO, if we adopt the President's tax policy and his spending policy, instead of surpluses, we will have $2 trillion in deficits. That is fiscally irresponsible. I am not talking about the short term. The Senator from Wyoming said you sometimes have to run a deficit to give lift to the economy. I agree with that. But we are talking about never getting out of deficit, according to the President's plan. Take his own budget documents--and I will show them in a moment-- according to the President's analysis of his own plan, you never escape from deficits, and they absolutely explode as the cost of the tax cuts increase at the very time the cost of the Government increases with the retirement of the baby boom generation. Where did all that money go? Where did it go? Nearly an $8 trillion turn in 2 years--a turn for the worse. Where did it all go? The biggest chunk went to the tax cuts, those already passed and those proposed. That is 36 percent of the disappearance of the surplus. The second biggest reason is additional spending in response to the attack on this country and the war. That is 28 percent of the disappearance of the surplus--increased spending for defense, increased spending for homeland security. Oh, no, this is not a matter of the Democrats were spending money. We all supported increasing defense spending and increasing homeland security. The third biggest reason for the disappearance of the surplus, 27 percent of the reason is lower revenues, not as a result of tax cuts, but revenues lower than anticipated because the models predicting how much revenue we would get have simply been wrong. This is lower revenue, not as a result of tax cuts. Lower revenue is the third biggest part of the reason for the disappearance of the surplus. Those two together are 63 percent. Only 9 percent of the disappearance of the surplus over the next 10 years is because of the economic downturn. Now we have record budget deficits. The surpluses are all gone, and we are talking about massive deficits. What our friends on the other side of the aisle recommend is more tax cuts, massive tax cuts; not just tax cuts this year or next to give lift to the economy at a time of weakness, but tax cuts that go on in perpetuity. They are not the tax cuts that have been advertised on television. They say there is a debate between $350 billion in the Senate and $550 billion in the House. That is not what the budget provides. The budget that our Republican friends passed provides for $1.3 trillion of additional tax cuts; $350 billion reconciled in the Senate bill, and another $200 billion allowed in the conference report. Then there is the part the media never talks about, another $725 billion of tax cuts that are the so-called unreconciled tax cuts, which simply means they are not given special protection on the floor from the normal operating procedures in the Senate. Here we are with record deficits, and our friends propose another $1.3 trillion. Look, some of us are supporting tax cuts as well. I support additional tax cuts this year and next to give lift to the economy now, but I do not support running massive deficits that are only made deeper and more serious by tax cuts that have effect 5 years from now, 8 years from now, 10 years from now, and 15 years from now. It does not make any sense. When I say we are faced with $2 trillion of deficits in the next 10 years according to the Congressional Budget Office, others say the deficits are going to be much more serious than that. Goldman-Sachs, a very distinguished private investment firm, has done an analysis. It says: No, the deficits are not going to be $2 trillion over the next 10 years; they are going to be $4 trillion. In fact, they are going to be $4.2 trillion when they do their estimates of where things are headed. To buttress their idea, if we just look at the first 7 months of this year and the revenue that is coming in, what we see is it is $100 billion below the forecast. The forecast that was made just 7 months ago is proving to be all wrong. The revenue is running $100 billion below the forecast. If that trend continues this year, we are going to have the lowest revenue to the Federal Government since 1959. When revenue was at a high percentage of the gross domestic product, the President said: You have to cut taxes; you are getting too much revenue; people are being overtaxed. So we did cut taxes. We cut them dramatically in 2001. Now we are headed for a circumstance in which the revenues are going to be the least since 1959, and the President's answer is cut taxes some more. Again, I would support tax cuts and additional spending to give stimulus to the economy now. And yes, spending stimulates just like tax cuts do. In fact, they are probably a little better because at least some part of tax cuts get saved and do not get into the economy and do not stimulate the economy. I would support a balanced package. I would certainly support additional tax cuts now to give lift to the economy now. Remember, very little of the President's proposal is effective now. Very little of the proposal before us is effective now. About 5 percent of the President's plan is effective this year. Ninety-five percent is off in the future. It makes no earthly sense. He is giving tax cuts when he is forecasting the economy to be strong. He is giving tax cuts when he is forecasting massive deficits. He is giving tax cuts right on the eve of the retirement of the baby boom generation when the cost of the Federal Government is going to explode. Two years ago, the President told us: Adopt my plan and we will pay off virtually all the debt. That turned out to be wrong, too. This year, we have had $6.7 trillion of gross Federal debt. Now the Congressional Budget Office tells us if we adopt the President's plan, 10 years from now we will have $12 trillion of debt. The debt is going to almost double and at the worst possible time because the baby boom generation is going to start to retire. I think the juxtaposition of all this is really odd. Maybe that is the best word to put to it. The President is asking for a massive tax cut when we already have record budget deficits, and at the very time our Republican colleagues are asking for the biggest increase in our debt in the history of the country. They are asking for a $984 billion increase in the debt. The largest increase we have ever had was in the President's father's administration when the debt was increased at one fell swoop by $915 billion. The President today said to the American people: This money is not the Government's money, it is your money, and you ought to get it back. I agree with the President absolutely. The money that comes to the Federal Government is the people's money. He is absolutely right. But this debt is the people's debt. Social Security is the people's Social Security. Medicare is the people's Medicare. Make no mistake about it, we the people are on the hook for this debt. When the President says, when we are already running record deficits, cut the revenue some more and increase spending--remember, the President's budget plan was not cut taxes and cut spending. The President's budget plan was to increase spending and to cut taxes, even when we have record deficits. The result is a massive explosion of debt, and it is the people's debt, make no mistake about that. In the future, when they come around to start to retire this debt, it is all of us who are going to be on the hook. Maybe it is not going to be us. Maybe it is going to be our kids. Maybe that is the idea. Let us give ourselves big tax cuts. I would be a big beneficiary of those tax cuts. I would get thousands of dollars of tax relief under this plan. I do not think it is right to give me a big tax cut now and shuffle it off to my kids and everybody else's kids. That is what is happening. That is, again, not my estimate of what is happening. This is from the President's own budget document. This is his long-term outlook of what happens if we adopt his plan. This is on page 43 of his analytical perspectives, and it shows the deficits now which, remember, these are record deficits. They look small on this chart because that is in comparison to what is to come. This is in percentage of GDP terms. This is not in dollar terms. So this is an apples-to-apples comparison. Look what is going to happen if we adopt the President's spending and tax cut plan. The deficits explode, according to his own analysis of his own plan. It is not surprising why that is the case. This is the chart that tells it all. The blue bars are the Medicare trust fund. The green bars are the Social Security trust fund. The red bars are the tax cuts. What it shows is right now the trust funds are running big surpluses in anticipation of the retirement of the baby boom generation. But instead of using that money to pay down debt or prepay the liability, we are taking it and using it to pay for tax cuts. What happens when those trust funds go cash negative when the baby boomers retire? Under the President's plan, at the very time the trust funds go cash negative, the cost of the tax cuts explode. Does this make sense? Is this really an economic growth plan? We are not talking about tax cuts now to give a lift to the economy when it is weak. We are talking about tax cuts that explode 10 and 15 years from now at the very time the expenses of the Federal Government explode because of the retirement of the baby boom generation. Some are saying, well, deficits really do not matter. We do not need to worry about deficits anymore. The Chairman of the Federal Reserve Board thinks deficits matter. This is what he said to 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. He is exactly right. Deficits do matter. They always have. When Chairman Greenspan looks at this tax cut, here is what he says: Without spending reductions, they could be damaging to the economy. With a large deficit, Mr. Greenspan said, you will be significantly undercutting the benefits that would be achieved from the tax cuts. Not only is this time--

Mr. CONRAD

Mr. CONRAD. Mr. President, I come to the Chamber today to talk about the budget circumstance in which we find ourselves, the President's proposal for additional tax cuts and, more largely, why I believe we are on a course that is utterly disconnected from reality. First, let me say the news media reports of the tax cut debate are among the worst I have ever seen. I believe the American people listening to news reports would believe that we are debating a tax cut of either $350 billion or $550 billion and that the President proposed a tax cut of $726 billion. That is what you read about; that is what you hear about; that is what is broadcast. But it is wrong. It is not even close to being right. The President proposed a tax cut of $1.6 trillion. This at a time when we are running record budget deficits. Let me make this clear. The deficit this year is going to be between $500 and $600 billion on a budget of $2.2 trillion. That is a massive deficit, a record. We have never had a unified deficit above $290 billion. Yet in that context, the President proposes large and exploding tax cuts that will dig the hole deeper and deeper. And the press reports that he has proposed $700 billion in tax cuts. How can this be? It is very simple. In the budget that was passed, there are two pots of money for tax cuts: the so-called reconciled tax cuts, the ones given special protection from the normal legislative process; and the unreconciled tax cuts, those that have to move in the regular order. If you put the two pots together, here is what passed the Senate and the House: $1.3 trillion of tax cuts. What passed the House was $550 billion of so-called reconciled tax cuts; $725 billion unreconciled. The press has completely forgotten and left out the $725 billion. You don't see it reported anywhere. So it is not unusual. I had a banker say to me this morning: Gee, Kent, I didn't realize that the President was seeking $1.6 trillion of tax cuts. I thought it was $726 billion and that the difference was between the $350 billion that there was an agreement on in the Senate and the $550 billion in the House. That sounds like a reasonable compromise. Of course, that was missing the basic facts because the news media has failed utterly in its responsibility to share full information with the American public so they can make judgments about what the policy of the country should be. This is a broad failure. It is truly remarkable. I read story after story in the most respected newspapers in America that the tax cut is $550 billion or $350 billion. That is just one part of a much larger tax cut proposal that is before us. In the Senate, we passed the following: $550 billion of reconciled tax cuts, protected from filibuster, given special protections in the Senate, and $725 billion of unreconciled tax cuts. Why does any of this matter? It matters because of what has happened. Two years ago we were told we could expect almost $6 trillion of surpluses over the next decade. In fact, the specific number we were told by the administration was $5.6 trillion of surpluses over the next decade. The Congressional Budget Office agreed with that. Now we see, just 2 years later, instead of surpluses, if we enact the Republican budget, the Congressional Budget Office tells us we will run $2 trillion of deficits over that same period, 2002 to 2011. That is a reversal of $7.6 trillion in just 2 years. Where did the money go? The President said in a speech the other day that the reason for the disappearance of the surplus is the attack on the country and the weak economy. Those are two reasons, but they are not the biggest reason. He forgot the biggest reason. The biggest reason is the tax cuts, both already implemented and the additional ones proposed by the President. If you look over the same 10-year period, 36 percent of the disappearance of the surplus is because of the tax cuts, both those already implemented and those proposed in the Republican budget. Twenty-eight percent is from the increased spending as a result of the attack on this country; that is, the increased defense spending, increased homeland security spending, the money to rebuild New York and the money to rebuild the Pentagon. Twenty-seven percent is because of revenue being lower than expected. Quite apart from the tax cuts, the revenue is also lower than anticipated. That trend is continuing. In a few moments, I will refer to the latest numbers on what is happening to our revenue. They are truly alarming. I hope people are paying attention to the overall circumstance we face. We are in record budget deficit now. The President is proposing massive additional tax cuts, although he is also proposing increased spending, not reduced spending to pay for the tax cuts, but increased spending. We are on the eve of the retirement of the baby boom generation which will dramatically increase the cost to the Federal Government. Only 9 percent of the disappearance of the surplus is because of the economic downturn. Some have suggested deficits are going to be relatively small and short term. That is not what we see. We see very large deficits continuing throughout the entire decade. In fact, they never get below $300 billion on an operating basis. Those are massive budget deficits by any calculation. These numbers probably substantially understate the deficit. Let me repeat that. These numbers are according to the Congressional Budget Office. They exclude Social Security, setting Social Security aside, as it should be. You never have deficits over the entire next 10 years of less than $300 billion. But that badly understates how serious the deficit situation is going to be. There is no money in here for the reconstruction or the occupation of Iraq. There is no money in here to fix the alternative minimum tax, which is a ticking timebomb. Right now 2 million people are affected by the alternative minimum tax. By the end of this decade, it is going to be 40 million people affected. It costs $600 billion to fix. There is no money in this budget for that. In truth, the revenue is still falling far short of expectations. That is not in these numbers, either. This, although it is dire, understates the seriousness of the budget deficits we will face. Goldman Sachs just did an analysis. This is what they found. They concluded that instead of $2 trillion of deficits over the 2002 to 2011 period, if we enact the President's plan over the next decade, the deficits will be over twice that: $4.2 trillion over the 2004 to 2013 period. Remember, just 2 years ago we were told there was going to be $5.6 trillion of surpluses. Now Goldman Sachs has done an analysis saying the true deficits are going to be closer to $4 trillion over the 2004 to 2013 time period. That is an absolutely stunning reversal in just 2 years. We were told 2 years ago that if we enacted the President's plan, we would pay off virtually all of the publicly held debt by 2008. Now we see instead the gross debt of the United States exploding-- $6.7 trillion today. If the President's plan is enacted, and what has been passed in Congress goes through, the debt will increase--gross debt--to $12 trillion in 2013, and this at the worst possible time. Why the worst possible time? Because the baby boom generation is going to start to retire. They are going to double the number of people eligible for Social Security and Medicare. It is not surprising, then, that at the very time the President is asking for a big, new tax reduction, Republicans are asking for the biggest expansion of the debt in the history of the United States. Think about this. We cannot pay our bills, we are running record deficits, we are piling up debt at a record rate, and the President says let's cut revenues some more. Now, as a short-term matter, that might make some sense, to give lift to the economy. We know it stimulates the economy to cut taxes and to spend the money. Those two things stimulate the economy. In the short-term, that would make sense to me. In fact, very little of the President's so-called stimulus package is effective this year. It is a very odd thing. Only 5 percent of the President's so-called growth package is effective this year at a time of economic weakness. Ninety- five percent of the cost is in future years which, of course, adds to the deficit, adds to the debt, at the very time the President says the economy will be growing stronger. So there is an incredible disconnect between what the President says is the problem--economic weakness now--and his plan, which is to provide tax cuts that have very little impact now and have most of their cost later on, 5 years from now, 6 years from now, 10 years from now--at the very time we know the cost of the Federal Government will be going up as a result of the retirement of the baby boom generation. Is anybody watching? Is anybody listening? Is anybody thinking about what happens to this country right over the horizon? I am not talking about next year. I am not talking about the year after that. I am talking about 5 and 6 years from now when the President's plan explodes in cost, at the very time the cost to the Federal Government explodes as a result of the retirement of the baby boom generation, doubling the number of people eligible for Social Security and Medicare. This is clearly a plan that does not add up. It doesn't connect with the reality that we all know is going to occur. As a result, Republicans are asking for the biggest increase in the debt in the history of the country. They have just asked for nearly a trillion-dollar increase in the debt. The biggest previous increase was $915 billion in the President's father's administration. I must say I find this circumstance alarming for the future economic strength of the country. Now, this is a chart that I did not prepare. This is a chart that is right out of the President's own budget. It is from page 43 of his analytical perspectives. It is the long-term view, according to the President's own analysis, of what happens to the budget deficits if his plan is passed--his spending plan, his revenue plan. Here is what he says will happen. You can see we never get out of deficit and that once we get past this 10-year period, when the trust funds are throwing off big surpluses, the Social Security and Medicare trust funds are now producing big surpluses--once we get past that point, the baby boomers start to retire, the cost of the President's tax cut explodes, and the deficits explode into large, unsustainable amounts that will fundamentally threaten the economic security of this country. Again, this is not my chart, this is the President's chart showing what happens, in his view, if his policies are passed--his spending plan, his tax plan. The deficits explode. Remember, what is most sobering is that we already have record deficits. Where you see the relatively small amount of red ink, that represents record budget deficits--the biggest we have ever had in the history of the country. What the President is saying is it is going to get worse with his plan--much worse. A fundamental reason for that is shown on this chart. On this chart, the blue bar is the Medicare trust fund. The green bar is the Social Security trust fund. The red bar is the tax cuts that have passed Congress in the budget. What this shows us is the trust funds right now for Social Security and Medicare are running big surpluses. This year alone, Social Security is going to run a surplus of over $160 billion. But we are not taking that money and paying down the debt or prepaying for the liability that is to come. Instead, that money is being taken to pay for tax cuts and to pay for other expenses of Government. You can see that this is the level of the tax cuts that have been enacted so far and that are proposed. Look what happens. As the trust funds start to move from big surpluses in this decade and start to be reduced as the baby boomers retire--and you can see that, ultimately, in the next decade they go negative, cash negative--then the trust funds are losing money. That is at the very time the cost of the President's tax cuts explode, leading us deeper and deeper into deficits, deeper and deeper into debt, when we are already experiencing record deficits. This is a disconnect from reality that is very hard to understand. Mr. President, some are now saying, well, deficits don't really matter; you can run budget deficits like this as long as the people will continue to loan you money. It is OK and it doesn't have an adverse effect on the economy. I don't believe that. What is amazing to me is most of my Republican colleagues didn't used to believe that. They believed deficits matter. I always have. But I am certainly not alone in that judgment. This quote is from Chairman Greenspan, head of the Federal Reserve, the man who has the dominant responsibility in this country for managing the economy--at least from the monetary point of view. That is the obligation of the Federal Reserve. What does he say? He said: 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. Of course, that is right. How does it affect long-term interest rates? I think if you just think about it in commonsense terms, to the extent the Federal Government is going to be borrowing money, it is competing with everybody else who is trying to borrow money--people trying to borrow money to buy a home, people who are trying to borrow money to buy a car, people who are borrowing money to run a small business, or even a large business; and to the extent there is more competition for those dollars that are available, the higher cost of borrowing money; the higher cost of borrowing money, interest rates go up. When the Government runs big deficits, that is reducing the pool of money available for investment. It reduces the pool of societal savings when the Federal Government is running deficits. If you reduce the pool of money available for investment, you reduce investment. Without investment, you cannot grow. That is why many of us believe the President's so-called growth plan is an antigrowth plan. It is not going to help growth; in the long-term, it is going to hurt growth because it is all financed with borrowed money. It is all financed by putting it on the credit card. It is all financed not by cutting spending or raising other revenue, it is financed by borrowed money. Chairman Greenspan just came before the House Financial Services Committee. As noted in the New York Times, he said: Tax cuts without spending reductions could be damaging. He said very clearly: The economy was poised to grow without further large tax cuts, and the budget deficits, resulting from lower taxes without offsetting reductions in spending, could be damaging to the economy. We are not talking about a growth package here. We are talking about a package that is going to undermine growth. That is not just my view. It is not just the view of the Chairman of the Federal Reserve. The distinguished economist Mark Zandi did an analysis of the competing plans before us to boost economic growth. He found that the Democratic plan would provide about twice as much job growth in 2003 and 2004 as the President's plan but not have the negative consequences of the President's plan over the next decade. He found the President's plan actually hurts economic growth because it is all financed with borrowed money. It increases deficits, reduces the pool of societal savings, reduces the pool of money available for investment, and hurts the economy long term. It is not just Chairman Greenspan, it is not just me, it is not just distinguished economists like Mr. Zandi. In fact, we have now had 10 Nobel laureates in economics come out and say the Bush tax plan will not help the economy, it will hurt the economy; that long term, it will reduce economic growth, not increase it. Interestingly enough, that is also the conclusion of Macroeconomic Advisers, who have been hired by the White House and the Congressional Budget Office to do this kind of economic analysis. Do you know what they found? The President's plan will give a boost in the short term, but it is worse than doing nothing after 2004. After 2004, it will actually hurt economic growth, will hurt job opportunity, will hurt the strength of the American economy. Why? Because, once again, it is financed with borrowed money. It runs up the deficit. It runs up the debt. It reduces the money available for investment, and that hurts economic growth, not help it. The Congressional Budget Office has just done what is called dynamic scoring. You will recall that some have said, and the President has said if we cut taxes, it will actually increase revenue. We will get a big boost from cutting taxes in the economy, and that will raise revenue. The President's own economists do not believe that. They say if you cut taxes, as the President has proposed, you will reduce revenue and reduce it dramatically. The Congressional Budget Office is now headed by a man who was previously on the President's Council of Economic Advisers. He was appointed by our Republican friends. They control the Senate and the House. They had the ability to choose the new head of the Congressional Budget Office. He came from the President's Council of Economic Advisers. He did an analysis of what our Republican colleagues and what the President are telling America. The President is saying: If you go out there and cut taxes, you get more revenue. That is not what the head of the Congressional Budget Office found. He found you get increased deficits. Guess what? If you cut the revenue when you already have massive budget deficits, the deficits get bigger. That is his conclusion. Our Republican friends have said: If you just use dynamic scoring, if you just take into account the effect of the tax cuts, you will see that you get more revenue. Their own appointee did just that. He used dynamic scoring. He took into account the effect of the tax cuts, and here is what he found: The net effect of the proposals in the President's budget on economic output could be either positive or negative . . . Importantly, regardless of its direction, the net effect through long-term changes to the supply side of the economy . . . would probably be small. He did not stop there. He did seven different ten-year analyses of the President's budget proposal. Using the old method called static scoring, CBO projects the President's budget has a $2.7 trillion impact on the deficit--negative impact. In other words, it is going to take $900 billion of forecasted surplus. It takes that first and then goes $1.8 trillion in the hole. So it is a negative total impact of $2.7 trillion. The new head of CBO, who just came from the President's Council of Economic Advisers, did an analysis using the dynamic scoring our Republican colleagues wanted him to do. Do you know what he found? In four of the seven ten-year models, the deficits would be even larger than under the old method of analyzing deficits. Why? Because the deficits are increasing. It is increasing the debt, and the dead weight of those deficits and debt hurt the economy. They hurt the economy because they reduce societal savings. They reduce the money available for investment, and without investment, you cannot grow. Is anybody paying attention to these linkages? Is anybody paying attention to the long-term implications of what is being proposed? They did dynamic scoring. In four of the seven long-term models, they found deficits even larger than what occurred using the old method of analysis because the effect of these tax cuts is not positive. Over time it is negative because they are not offset by spending reductions. They are all financed by borrowed money. You cannot borrow your way to prosperity. Nobody ever has. No country certainly ever has. When they did this analysis, they found three models that showed somewhat smaller deficits than would occur using static scoring. Using dynamic scoring in three of the seven long-term models, they had somewhat smaller deficits, although not much smaller; instead of $2.6 trillion, $2.5 trillion, and $2.3 trillion. Do you know what their assumption was here? That over the next decade--this is using dynamic scoring--over the next decade, people would work harder in anticipation of the large tax increases to come as a result of the President's policy now; that the President's policy now will require huge tax increases in the future to balance the books and, as a result, people will know that and work harder over the decade; meaning, they will make more money, there will be more tax revenue, and, as a result, the deficits will be somewhat smaller. Let's do a reality check on this question of if we just put these tax cuts into effect, we will get more revenue. I remember very well 2 years ago. I came to this floor on many occasions. In the Budget Committee, I showed this chart on many occasions. This was CBO's analysis of where the deficit was headed, the range of possibilities from the best-case scenario, in terms of the surplus, to the worst-case scenario. This is what they told us 2 years ago was the range of possibilities, and they adopted the midrange of this possible series of outcomes as their $5.6 trillion ten-year surplus projection. I had so many of my Republican colleagues come to me and say: But, Kent, you are being way too conservative. You are saying that we might not get this midrange of outcomes, that it might be worse, and so we ought to be cautious about what we do. Do you not understand that when we put in place these big tax cuts, there will be more revenue, not less revenue; that there will be more revenue and so there will not be $5.6 trillion of surpluses, there will be $7 trillion of surpluses or $7.5 trillion of surpluses? It will be much higher than the midrange of the forecast. What has happened? Here is reality. That is the red line on this chart. This is what is projected based on what has actually happened in the real world and what the President has proposed. This is where things come in, not at the midpoint of the range, not at the bottom end of the range of CBO's forecast of possible outcomes for the surplus and the deficit, but below the bottom end of the range. So much for dynamic scoring saving the day. We did the big tax cuts that the President said would produce more revenue. It did not work. It did not come close to working. We are going down a blind alley. We are going down a path that will inexorably lead to massive budget deficits, a massive buildup of debt, and fundamentally threaten the economic security and strength of this country. That is where we are headed, and it is just as clear as it can be. Newspapers all across the country are questioning the wisdom of what the President is proposing. The Cleveland Plain Dealer from April 24: Although the dividends tax cut Bush seeks might some day be a reasonable step, that day is not now. Not amid talk of a Federal deficit approaching $500 billion next year. Not when Alan Greenspan, the Federal Reserve chairman Bush just reappointed, sees no economic stimulus in a plan he said, if enacted, should be paid for by offsets elsewhere to avoid the danger of deeper deficits. Not when there is no end in sight to the costs of recreating Iraq as a democracy. It is not only the Cleveland Plain Dealer. It is others as well. The St. Louis Post-Dispatch: The national debt isn't free. We'll pay interest on it for decades. Every dollar of interest is a dollar that can't be used for education, law enforcement, defense, or help for the poor and elderly. The public senses this, and that is why it is not eager for a new tax cut. . . . In fact, Mr. Bush is steering the economy toward an iceberg. Massive deficits year after year contribute to higher interest rates. Higher rates can choke off prosperity. They have it right. Here is what has happened to jobs during the current administration. We have lost 2.7 million jobs since January 2001. Let me be clear, the President's economic policy is not responsible for all of this. This is a combined effect of the bubble bursting, of a runup in investments that was unprecedented. It is, in part, the effect of the attack on this country which, without question, hurt this country's economy. It is also, I believe, in part a result of an economic policy that does not generate confidence going forward. We cannot run record budget deficits and go out and propose increasing the spending and cutting the revenue dramatically, but that is what the President is proposing. We have record budget deficits now. He is not talking about cutting spending. He is increasing the spending by over $600 billion above the baseline. He is cutting the revenue. Think about this. If one were at home and they couldn't pay their monthly bills--their bills were more than their income--would their answer be to go out and increase spending and reduce their income? Is that what one does? That is what the President is proposing we do as a nation. We are going to have the biggest budget deficits in the history of America this year. The President's answer is, increase spending and cut the revenue. That might make sense as a short-term measure. That might make sense for the moment to give a lift to the economy. The President is not proposing this as a short-term measure. He is proposing increasing spending and cutting revenue over the entire next decade and beyond, driving us deeper into deficit, deeper into debt, right at the time we know the baby boomers are about to retire. This is the record on job growth of this administration compared to previous administrations. We can see in every previous administration we have had positive records of job growth. In this administration, we have had negative job growth. This plan is not working. I said at the beginning I would talk about the latest numbers we have seen on revenue, and they are truly alarming. We have just received the results of the first 7 months of this year in terms of the revenue. What we are finding is that revenue is running $100 billion below the forecast for the first 7 months of the year. We already have a projection of record budget deficits, the biggest in the history of the country. Now we learn that in the first 7 months the revenue is running $100 billion below the forecast. That means, obviously, the deficits will be $100 billion higher if those trends continue. All of us hope they do not, all of us hope they are reversed, but if they do continue, here is what we see: Revenues, as a percentage of our national income, as a percentage of our gross domestic product, are headed toward the lowest level since 1959. Remember, 3 years ago revenue was at the highest level we have had since 1969. In fact, the President used that as a reason to have a big tax cut. Remember? He said revenue is coming in at a higher rate as a percentage of our national income, as a percentage of our gross domestic product, as it has been since 1969--I think he used since 1970 at the time in making the argument. And so he said: We have to cut taxes. Guess what. Now the revenue is going to be the lowest it has been since 1959, and his answer is cut taxes some more, increasing spending and cutting taxes. This is a prescription for deficits that are deep and abiding and that will fundamentally hurt this economy. That is what Chairman Greenspan is telling us. That is what 10 Nobel laureates are telling us. That is what over 500 economists are telling us. That is what the Committee for Economic Development, made up of 250 of this country's leading corporations and academics, is telling us. They are saying this is a policy that is unwise. That is what former Secretary of the Treasury Bob Rubin, former head of the Federal Reserve Paul Volcker, and former Republican Senator Warren Rudman who served on the Budget Committee with great distinction are all warning us about. When you run record budget deficits, you cannot add on top of that record tax cuts and increase spending and wind up with anything more than even deeper deficits and deeper debt. That is especially unwise given the fact the baby boomers are about to retire. The Washington Post said this morning in an editorial labeled ``Tax Cut Trickery: Part II'': The House Ways and Means committee plans to take up a tax plan that makes President Bush's look like a model of budget honesty, fiscal probity, and distributional fairness. The plan concocted by Chairman Bill Thomas junks the president's proposal to end taxes on dividends in favor of a proposal to cut the top rate on both dividends and capital gains to 15 percent. The Thomas plan is more straightforward than the administration's complicated proposal but has not much else to recommend it. First, it is tilted even more heavily to the very wealthy. An analysis by the Urban Institute-Brookings Tax Policy Center shows that households with annual incomes of more than $1 million would see their taxes drop an average of $42,800 under the Thomas capital gains-dividend cut, compared with $26,800 under the Bush dividend plan. Taking the two plans as a whole, those households would receive an average tax cut in 2003 of $105,600 under the Thomas plan and $89,500 under the Bush plan. Let me repeat that. The Washington Post is reporting that under the Thomas plan, the chairman of the House Ways and Means Committee, taxes on those earnings over $1 million a year would be cut by over $100,000 for 2003 alone. Taxes under the President's plan for people earning over $1 million would be cut by almost $90,000. This is at a time when we are in record budget deficits, at a time we are on the eve of the retirement of the baby boom generation that will double the number of people eligible for Social Security and Medicare. This is going to dramatically increase the cost to the Federal Government. This is disconnect from reality. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent time under the previous quorum call be charged equally.

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

Mr. CONRAD

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Yes. We now estimate the budget deficit, under this budget resolution, will be between $500 and $600 billion for this year alone on a $2.2 trillion budget. Some have said these deficits are small. There is nothing small about them. They are massive. They are record. They are the biggest we have ever had in dollar amount. If we look back to 2 years ago when we were told that we could expect--instead of deficits--nearly $6 trillion of surpluses, we now know, if we adopt what is before us, instead of $5.6 trillion of surpluses--if we adopt the budget resolution before us--we will have over $2 trillion of deficits over that same period.

Mr. CONRAD. Record budget deficit.

Mr. CONRAD. Yes. I would be pleased to yield.

Mr. CONRAD. The Senator is on to something very important. Really, this understates the cost of the tax cut. The tax cut that is in this resolution, $1.3 trillion, has an additional cost, the associated interest cost, because this is all borrowed money. That would be another about $300 billion. So the total cost goes to $1.6 trillion--truly stunning when we are already at record budget deficits, when we are at war, the cost of which no one knows, and when we are on the eve of the retirement of the baby boom generation. So there can only be one result; that is, to dramatically explode deficits and debt.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Mr. President, this is, I believe, the worst budget this Chamber has considered perhaps in its history. It is radical, reckless, dangerous, and extreme. At a time of record budget deficits, it proposes to cut revenues by over $1.3 trillion and increase spending by over $1.1 trillion, driving us deeper into deficits and debt. It explodes deficits when we are at war, the cost of which is unknown, and right on the eve of the retirement of the baby boom generation which will dramatically increase the cost of Social Security and Medicare. Make no mistake, the cost of the massive tax cuts in this budget explode at the very time the cost to the Government of the baby boom generation's retirement explodes. There can only be one result, and that is to drive this country off the cliff into deficits and debt on a scale and magnitude never seen in this country's history. That is not just irresponsible, it is wildly irresponsible. This budget is not a document that represents a conservative approach to governance. It is radical and it is extreme. It says deficits do not matter, that taking virtually every penny of the Social Security trust fund surpluses to fund tax cuts for the wealthiest among us, is the priority for this Nation. This budget flunks every test of fiscal responsibility and basic fairness. This budget proposes taking trillions of dollars raised from the payroll taxes of middle-class Americans, generated to support Social Security, and uses them to fund an income tax cut overwhelmingly for the benefit of the most wealthy among us. The President's proposal, which this budget resolution seeks to support, would give a $90,000 tax reduction to those earning over $1 million a year and funds it by taking the payroll tax money of middle- class Americans to pay for it. To the extent it is not paid for by that mechanism, it borrows the money and charges the cost to future generations. That is class warfare of an extreme nature. It takes from the many to give to the few. The proponents of this budget claim it contains a growth package. It does not. It contains a radical expansion of deficits and debt that can only undermine our long-term economic strength and security. Oh, yes, it will give a momentary and modest lift to the economy. But like the drug addict who gets a momentary high, it will be inexorably followed by the lows brought on by the deadweight of deficits and debt. The best economists in America tell us that this budget proposal hurts long-term economic growth and threatens our economic security because it is all financed by borrowed money. It is a borrow-and-spend philosophy that doubles our gross national debt over the next decade, right before the baby boom generation retires. This is the time we should be paying down debt or prepaying the liability we all know is to come. Instead, this budget says: Forget about what we know is happening and what is about to happen; let's live for the moment and not worry about the future. As bad as this budget is--and it is bad--the process that brought it here is even worse. I believe it represents an attack on the Constitution itself. Our Founding Fathers intended the Senate to be the place where a determined minority could slow down and perhaps even stop measures that the minority believed could damage our country. So the Senate adopted the right to unlimited debate and the ability to offer unfettered amendments. The budget process used in this conference report has never been done before and fundamentally denies Senators those basic rights. The process, called reconciliation, which restricts Senators' rights to debate and amend, has been twisted like a pretzel into something unrecognizable from what was intended. Reconciliation was meant to provide a fast-track process to reduce deficits, and now it is being used to explode them. Understand that this budget says both bodies, under the reconciliation provisions, are instructed to cut taxes by $550 billion. If anybody believes this is a measure to cut taxes by $350 billion under reconciliation, that person is profoundly misled. The instruction says clearly: Cut taxes by $550 billion under these fast-track procedures that mean Senators are denied the basic protection of unlimited debate and amendment. In the next breath, the Senate is told to forget that instruction because there will be a supermajority point of order in the Senate if it is followed. But in the conference committee, the higher tax cut can be adopted and come back to the Senate and be passed on a simple majority vote under special time limits and with restrictions on amendments that deny every Senator their most basic rights. All this was made possible by a procedure never considered or debated in either body. This scheme was concocted in the conference committee without a single member of the minority present--not one. We were locked out. So four members of the Senate majority, with two members of the House majority, have constructed a procedure, never contemplated in either Chamber, which allows the special restrictions and limitations of reconciliation to apply to a tax cut that never passed this Chamber. This stands the plain meaning of reconciliation on its head. No true reconciliation between the House and the Senate has ever occurred. There was no true meeting of the minds. So they conjured up a new point of order in the conference committee as a figleaf to hide their failure. Colleagues should understand the extreme nature of what is being done. If a conference committee can add new provisions never debated or contemplated in either Chamber, and do so without the minority, where does it end? Could an abusive minority of the majority, in a conference committee, decide that a supermajority point of order would apply to an individual Senator's right to offer an amendment? Could just a handful of Senators and House Members in a conference committee create a supermajority point of order against amendments on a particular subject? What is to prevent a minority of the majority in a conference committee from fundamentally altering the rights of individual Senators? This way lies chaos and a descent into unconstitutional government. Mark my words, the Senate will live to regret this day. Unintended consequences, we have seen in the past, flow from very little things. In 1975, a tax cut of $6 million was used as precedent for using the reconciliation process that was designed for deficit reduction. It was used as a pretext to allow tax cuts of over $1 trillion, tax cuts that have pushed us now into deep deficit and growing debt. This is what has been agreed to in the conference committee. The reporting has been almost uniformly wrong. They say the tax cut permitted is $550 billion. That is not true. The tax cut in this budget resolution is $1.3 trillion, and that does not count the associated interest costs. It is only one part of the tax cut which is $550 billion. That is the so-called reconciled amount. Those are the amounts that will move under special protection, that will restrict Senators' right to amend, restrict Senators' right to unlimited debate, fundamentally restrict the determined minority's ability to stop what they believe will damage this country in a fundamental way. I hope anybody voting on this understands. If you vote for this budget resolution, you are voting for $1.3 trillion of tax cuts, of which $550 billion is reconciled, moving under special protection that fundamentally restricts the Senators' basic rights to amend and debate.

Mr. CONRAD. Mr. President, I want to respond to something my colleague from Idaho indicated during his remarks when he stated that marriage penalty relief has been attacked as a tax cut for the wealthy. I know of no example of that. I do know that on our side, Democrats moved to accelerate that relief in 2001, but virtually every Republican voted against it. I would be happy to have that vote printed in the Record at this time, so people can check the record and determine whether or not that allegation has merit or not. I ask unanimous consent that be printed in the Record.

Mr. CONRAD. I also need some time to wrap up, I say to my colleague, in maybe 10 minutes. Maybe we can work these all down in a way that fits within the time constraints.

Mr. CONRAD. Mr. President, I tried to be as frank and forthcoming as I could be. When the Senator says there were no categorizations, there were. I would be happy to enter it into the Record. It is not true to say there were not. There were. You had the discretionary spending amount and the other elements that I described for the highway category, for the discretionary category. I don't know what the Senator is looking at.

Mr. CONRAD. Mr. President, I suppose reasonable people could differ on what constitutes a budget for 2 years. The amendment that was offered last year was an attempt to adopt the budget that had been formed in the Budget Committee. And what that amendment provided--and I have it before me now and the Senator is correct--was caps on spending. It provided, for fiscal 2003, an overall amount for discretionary spending of $764,722,000,000. For the highway category, it provided $28.9 billion in outlays. For the mass transit category, it provided $1.445 billion. For the conservation spending category, it provided $1.922 billion. It provided the framework--perhaps that is the best way to say it--of the budget that we had constructed in the committee. It was an attempt to give the appropriators the budget framework to go forward so they could do their work. That is what the attempt was. I think it is fair to say it was not a full budget resolution. I would say that to my colleague. A full budget resolution is not a 2-year document. What the Budget Committee does with the full budget resolution is either a 5-year or a 10-year allocation of resources, both for taxing and spending. But it became evident we did not have the votes for that. So what we tried to do was put in place this framework of a budget for 2 years, with caps set for 2 years, with the categories specified for the 2 years; but, more than that, to also provide an extension of pay-as-you-go provisions to include the budget enforcement mechanisms that were otherwise going to lapse and to provide the other elements that were important for the consideration of the individual decisions that the appropriators have to make. I note my colleague from Massachusetts is here. He has asked for time. I yield 15 minutes to the Senator from Massachusetts.

Mr. CONRAD. Mr. President, we can debate economic theory for a long time. What is not open to debate is what has factually occurred. Let's go back. Two years ago, we were told this was the range of outcomes looking forward in terms of the budget surplus. The Congressional Budget Office and the President's Office of Management and Budget said they adopted the midpoint of this range. We are going to have $5.6 trillion of surpluses. Our friends on the other side said: Oh, no, it is going to be better than that because we are going to cut taxes; it is going to lead to bigger surpluses; it is not going to be the midpoint of the range of possible outcomes, it is going to be even better than that. That was fantasy world stuff. We tried their approach. It failed. It did not even come close, not even hailing distance of what happened. Here is what happened. We wound up below the bottom of the range of projected outcomes with deficits and debt as far as the eye can see. What is the answer of the other side? Let's do it again. Let's try it again. Let's dig the hole deeper. Let's run up more deficits, add more debt, and that will strengthen the country. Does anybody honestly believe that more deficits and more debt are going to strengthen the country when we are on the eve of the retirement of the baby boom generation that is going to explode the cost to the Federal Government, and these folks come forward with tax cuts that explode at the very same time when we are already in record deficit? I tell you, is there no common sense left? Here is what our Congressional Budget Office, headed by their appointee, straight from the Council of Economic Advisers of the President of the United States, tells us if we adopt this proposal. He has done seven different models. He used their dynamic scoring, the idea that we are going to get more money if we cut the taxes. What did he find? In four of the cases, the deficits are even bigger. In three of the seven, the deficits are somewhat smaller, although all of them massive. What does he say: CBO estimates show lower deficits relative to so-called static scoring only by assuming large tax increases beginning in 2014. Hello, is anybody listening? He is saying, all those who said the problem is they are not using dynamic scoring, they are not showing the positive effects of the tax cuts, if we just do that, we will see the deficits are not going to be so bad. So we turned it over to their guy, straight from the President's Council of Economic Advisers, and he comes back and says to us: Oh, no, the deficits are not going to be smaller, they are going to be bigger because of the deadweight of deficits and debt. You cannot take on all this borrowing and strengthen the country. You weaken the country. Then he looked at three other possibilities. He ran three other models. Do you know what he said: Yes, the deficits could be somewhat smaller than would otherwise be the case, but that is on the theory that people are going to work harder over the next decade in preparation for the massive tax increases to come. Let me repeat that: The only way the deficits are smaller than so- called static scoring is if you assume the American people are going to work harder in anticipation of the massive tax increases to come to deal with these deficits that are exploding out of control. If anybody can seriously come out here and justify this proposal and these budgets, come on out, let's debate it. I do not see them. Where are they? Come on out here; let's debate. Let's debate what the effect of this budget is, $1.3 trillion of tax cuts on top of an initial $1.1 trillion of spending when we are already in record deficit on the eve of the retirement of the baby boomers, we are at war, a cost of which we do not know. There is only one possible outcome: More deficits, more debt in a way that is totally unsustainable, and that will lead to massive cuts in Social Security and Medicare and all the rest of Government. That is what is coming next.

Mr. CONRAD. While the Senator is waiting, I would like to show my colleagues what we have faced, what we were told would be the surpluses over the next decade. The Congressional Budget Office made their estimates 2 years ago, when they gave us a range of outcomes they said we could expect over the next decade. This is what they told us 2 years ago. They said this gray area were the possible outcomes, from least favorable to most favorable. They adopted as a prediction the midline. That is what told us we were going to have $5.6 trillion of surpluses over the next decade. I showed this chart repeatedly back in 2001, when we were considering the tax cuts, and warned my colleagues that we should not count on any 10-year projection. Some of my colleagues said: You are being way too conservative. We won't have the midpoint of this range of possible outcomes; we will have much more than that because the tax cuts will produce more revenue. That is the same song we are hearing now. They said: No, we won't have $5.6 trillion in surpluses; it will be much more than that because the tax cuts will kick off additional economic activity and that will bring us even more revenue. Well, let's go back to a reality check and see what happened. This red line is what has happened. It is below the bottom of the projections that were made just 2 years ago. That is where we really are. We are not at the midpoint. We are not at the low point of the range of projections. We are below the bottom. All those who said if you just cut taxes, you get more money, that is dream world stuff. It didn't work. It didn't come close to working. They were wrong. They weren't just a little bit wrong, they were totally wrong. The result is deep deficits and debt that will burden this society for decades to come. That is the fact. I thank the Chair and yield the floor.

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

Mr. CONRAD. I would say to the Presiding Officer, in response to my colleague, it is truly a perverted result we have here. Aside from the substance of this budget, which I find appalling, the procedure is even worse. The procedure that was designed to provide a fast-track procedure to reduce deficits has now been seized upon to expand deficits. If that isn't standing history on its head, I don't know what is. What they have done here is, they couldn't get a vote out of this Chamber to have a tax cut bigger than $350 billion. So what they did is, they went into a secret meeting in a room with the minority locked out, and they conjured up a scheme that says both committees are given an instruction, the tax committees, to cut taxes under these special fast-track procedures by $550 billion and another $725 billion on top of that outside of the fast-track procedures. And with respect to those that are given the special protection, the $550 billion, the Senate Finance Committee is told, oh, wait a minute, there will be a supermajority point of order if you report anything more than $350 billion. But don't worry about that because when it goes to a conference committee between the House and the Senate, you can come back with the bigger number and still enjoy the protections, the special provisions of reconciliation that take away a Senator's fundamental right to debate and amend. That is what is happening here. I say to my colleagues, we will rue the day this procedure is adopted. It has never been done before--never. What is going to happen here is going to fundamentally alter the Senate. The Senate was designed by the Founding Fathers to be different than the House of Representatives. It was designed to let a determined minority slow things down, to reconsider. But when it comes to reconciliation, forget it, because we have become just an extension of the House of Representatives. It will render the Finance Committee of the Senate irrelevant. All the Members of the Finance Committee should be aware of that. They are going to be irrelevant to this discussion because what is going to matter is what comes out of a conference with three or four people from both Chambers. They will come back here with whatever they decide. It will be an up-or-down vote, and a simple majority will pass it. And the fundamental role of the Senate is altered and diminished, and the strength of our Founding Fathers, the constitutional structure they created to protect this Nation, weakened. This is big stuff that is about to happen here. This is history-making stuff that is about to happen here. It is a dark day for this Chamber and for this country, in this Senator's view. I yield the floor and suggest the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. I thank the Senator. I yield now to the Senator from New Jersey.

Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from New Jersey and any additional time he requires.

Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from New Jersey. Mr. President, how much time do I have remaining?

Mr. CONRAD. Mr. President, I thank the very distinguished senior Senator from West Virginia. As I indicated, he is a very valuable member of the Budget Committee and the ranking member of the Appropriations Committee. He has said very clearly what this budget before us represents: a plunge off the cliff into unending deficits and debt--at the worst possible time. Here we are at war, the cost of which we cannot know, right on the brink of the retirement of the baby boom generation. We are already in record budget deficits. The Senator said the budget deficit, as some private forecasters indicate, will be over $400 billion this year. That doesn't count the $160 billion they are going to take out of the Social Security trust fund. On a true operating basis, we are going to have a deficit this year of more than $600 billion. Is anybody listening? And it doesn't end this year. We don't see the deficit on an operating basis, if this budget is adopted, ever getting below $300 billion to $400 billion a year. This is the sweet spot--the time the trust funds are throwing off big cash surpluses. When the baby boomers retire, we will go into cash deficits. Then the cost of the President's tax cuts truly explode, driving us off the cliff into deficits, and deficits that are totally unsustainable. I note the Senator from New Jersey is seeking time. He is also an extraordinarily valuable member of the Senate Budget Committee. He is somebody whose expertise in financial matters has been demonstrated in the private sector and public sector. Very few have been as successful as he has been in the private sector, and he was successful in understanding how the economy works. How much time does the Senator seek?

Mr. CONRAD. Mr. President, I salute the Senator from Montana, the ranking member of the Finance Committee, the former chairman of the Finance Committee, for, with great specificity, pointing out the extraordinary danger of what is being proposed here. In order to accomplish a short-term goal, we are endangering the ability of this body to responsibly manage the budget of this Nation. I believe this is a dark day for the Senate. I believe we will live to regret the day this was adopted. It is a sham. It will create enormous problems in the future. Whoever is in the minority--whoever is in the minority--is going to face a dramatic diminution of the power and the ability to influence outcomes.