Kent Conrad

Mr. CONRAD

Mr. CONRAD. Under this budget proposal, they will probably have to come back as early as next year----

Mr. CONRAD. Yes, $984 billion. The previous record increase was under the previous President Bush, November of 1990, when they got a $915 billion increase in the debt limit. As you know, the House has different rules than the Senate. We will not conclude action on the debt limit here probably until sometime later. But that is what this budget resolution contemplates, an increase in the debt limit now of $984 billion, nearly a $1 trillion increase in the debt.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Let me just say, the Senator has put his finger on what to me is so stunningly irresponsible about this budget. If this money was not being taken and used for other purposes, the surplus money, it could then be used in one of two ways. It could be used to pay down debt that would better prepare us for what is to come, or it could be used, some portion of it, to prepay the liability of what we know is to come. That is what other countries are doing. Other countries, recognizing the same demographic time bomb, are taking the surpluses being generated now in their trust funds and are investing them or they are prepaying the liability. Instead of paying down debt or prepaying liability, we are using the money for tax cuts and for other expenditures of government that leave us less capable to deal with what is to come. That is a profound mistake, and we will live to regret it. And we will then face a circumstance in which we will be asked to make even more draconian reductions in the benefits of those programs, or drastic tax increases. Let me say, the President told us 2 years ago his budget would pay down a record amount of national debt. He said: We will pay off $2 trillion of debt over the next decade. That will be the largest debt reduction of any country, ever. He said then: Future generations shouldn't be forced to pay back money that we have borrowed. We owe this kind of responsibility to our children and grandchildren. I believe the President was absolutely right in saying that. But look at what is happening. There is no record paydown of debt. There is no paydown of debt. Instead the gross debt of the United States is exploding. From $6.7 trillion in 2003, instead of being virtually paid off, which he said would occur by 2008, we are nearly doubling the national debt just in this 10-year period. So the national debt would be $12 trillion at the end of 2013 if this budget is adopted, the plan that it contains. The President this year told 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. In this very budget, what we see contained is a call for the biggest increase in the debt limit in the history of the country. They are asking for a $984 billion increase in the debt limit as part of this proposal. That is the biggest increase in the national debt in the history of America.

Mr. CONRAD. I have yielded to the Senator from Massachusetts for 15 minutes.

Mr. CONRAD. Mr. President, perhaps it does no good to prolong this. But this was the chance we had to put in place the spending limits for last year and this. It was our chance to establish what a budget resolution does. A budget resolution outlines what are the resources available, and it was our best chance to put in place that structure, to have the Appropriations Committee know what was available to them. That vote was held. I am happy to yield to the Senator from Massachusetts.

Mr. CONRAD. Let me finish the thought and then I will be happy to yield. Maybe we are looking at different things, but I offered an amendment to the Feingold amendment providing for these categories, providing for the discretionary amount, providing for these other categories. That appears in the Record as an amendment numbered 3916 to amendment No. 3915. That is what I am discussing here. I do yield 15 minutes to the Senator from Massachusetts. I am sorry. Would the Senator from Massachusetts withhold. The Senator from Pennsylvania wanted to ask a question. I am happy to yield to him.

Mr. CONRAD. I will not yield until I finish. The Senator had an opportunity. Every Senator had an opportunity. And it is not the typical order to have a 1-year budget in the Senate. We deal with 5- year or 10-year budgets, not 1-year budgets. Last year, in an attempt to achieve a budget on a bipartisan basis, we brought a 2-year budget to the floor. It was rejected; 59 Senators voted aye. It was a bipartisan vote; 41 voted no. They had their chance to have a budget, and they decided not to.

Mr. CONRAD. The Senator from North Dakota reclaims my time, and I say to the Senator from Pennsylvania, the Senator from Pennsylvania voted no. We had a 2-year budget. The Senator said he supported a 2-year budget; he voted no. The Senator had a chance last year to vote for a 2-year budget. He voted no; 59 Senators voted for it. We had an opportunity.

Mr. CONRAD. The decision, it is fair to say, was a collective decision and probably was the wisest course given the circumstances we faced at the time. We could ask the 41 who voted against the 2-year budget: Why did they fail to vote for what was a bipartisan budget proposal right here on the floor of the Senate that would have provided the budget blueprint? They had the chance; 59 Members voted for it, for a budget outline; 41 did not. The question ought to be directed to the 41 who voted no.

Mr. CONRAD. I didn't make that determination. That was made in a higher pay grade than mine. The budget we had done in the committee was a 10-year budget, and the budget in the House was a 5-year budget. We had used the more conservative CBO assumptions, and they used the Office of Management and Budget assumptions. We went to a 2-year budget because we thought that had the best prospects of securing the votes necessary to actually have a budget blueprint in the Chamber. We did get 59 votes. We did get a unanimous consent agreement from the appropriators to stick to that number. For other reasons there was disagreement with House appropriators outside of the budget with respect to priorities. I say to my colleague, no question, we would be better off to have a budget. That is a fundamental responsibility. It did not happen last year for lots of reasons. I have tried to enumerate some of those. I personally am committed to the budget process. I think it is critically important. I agree with the Senator with respect to that observation.

Mr. CONRAD

Mr. CONRAD. All right. Mr. President, let's all understand what we are voting on. This is not a tax cut of $350 billion. There is a tax cut contained in this budget resolution for $1.3 trillion. There may be some side deals that have been arranged to reduce the reconciled amount of that tax cut, but the budget resolution before us provides $1.3 trillion in tax cuts. This is at a time of record budget deficits. We have the biggest budget deficits we have ever had. The budget deficit for this year will be between $500 and $600 billion, not counting Social Security. If we treat Social Security the way it was intended and we don't take it and use it for other things, the operating deficit is between $500 and $600 billion this year. This is advertised as a growth package, something that will grow the economy. In our analysis, nothing could be further from the truth. The deadweight of these deficits and debt will burden the economy for years. It threatens the economic security of our country. This is the analysis of the people who were hired by the White House and the Congressional Budget Office to do the economic analysis. This is what they say: Initially the plan would stimulate demand by raising disposable income, boosting equity values, and reducing the cost of capital. However, the tax cut also reduces national saving while offering little new permanent incentives for either private saving or labor supply. Therefore, unless it is paid for with a reduction in Federal outlays, the plan will raise real interest rates, crowd out private sector investment, and eventually undermine potential gross domestic product. In other words, this plan hurts the economy. It doesn't help it. It hurts it. That is the analysis of the people who are paid to do it by the White House themselves. The White House's own budget document reveals the long-term circumstance we face: Exploding deficits as a result of exploding costs to the Federal Government from the retirement of the baby boom generation, coupled with exploding costs of the tax cut that is proposed and contained in this budget. The result: we never get out of deficit, ever, at least until the year 2050, according to the President's analysis. The deficits just get deeper and deeper and deeper, threatening the economic security of the country. I close with this piece that appeared in the New York Times op-ed page on Wednesday. This is a piece done by six of our most distinguished colleagues: three former Senators--two Democrats, one Republican--two members of President's Cabinet in the past--one Republican, one Democrat--and Paul Volcker, former head of the Federal Reserve. I don't know his political affiliation. They are warning us of the direction we are going. They conclude by saying this: Congress cannot simply conclude that deficits don't matter. Over the long term, deficits matter a great deal. They lower future economic growth by reducing the level of national savings that can be devoted to productive investments. They raise interest rates higher than they would be otherwise. They raise interest payments on the national debt. They reduce the fiscal flexibility to deal with unexpected developments. If we forget these economic consequences, we risk creating an insupportable tax burden for the next generation. That is what is at stake here. Are we really going to pass a budget that contains authorization for another $1.3 trillion in tax cuts, when we are already in record budget deficits, when we are in a war, the cost of which we do not know, and we are on the brink of retirement of the baby boom generation, which is going to explode the cost to the Federal Government? Mr. President, anybody who votes for this budget is voting to increase the deficits by $2.4 trillion. It is precisely the wrong thing at this time. It is precisely the wrong thing. I urge my colleagues to vote no.

Mr. CONRAD. Mr. President, we anticipate now that the vote will start at 5:20. We want to alert our colleagues to that. Let me just wrap up, if I may. And then would the chairman like to conclude this debate?

Mr. CONRAD. How much time remains on our side?

Mr. CONRAD. I appreciate very much the Senator from New Jersey, who is the former ranking member of the Budget Committee, and, of course, has a history of extraordinary success in the private sector as well as tremendous contributions in the public sector.

Mr. CONRAD. Fifteen and a half minutes. Could I yield 10 minutes to the Senator from New Jersey?

Mr. CONRAD. Mr. President, I thank the chairman and want to echo that for Members on our side. We are very close now to being able to go to the final vote. How much time remains on our side, Mr. President?

Mr. CONRAD. Mr. President, I say to my colleague, I do not have that additional amount of time. I will give him an additional 2 minutes.

Mr. CONRAD. I yield 15 minutes to the Senator from Delaware.

Mr. CONRAD. Mr. President, I take issue with my colleague on this question of spending. This chart demonstrates the long-term relationship between spending and outlays going back to 1981. This is the outlay line, the spending of the Federal Government. It was over 23 percent of gross domestic product in 1982 and has been brought down steadily. When Democrats were in control in 1993, we put in place a 5- year plan. Look what it did to spending. I hear the allegation that Democrats are the spenders. Let's look at the historial record. When Democrats had control in 1993, this is the trajectory we put spending on--down as a percentage of our gross domestic product, which economists say is the right way to measure spending over time because you are taking out the effects of inflation. We did increase revenues because we faced massive deficits. These deficits during this period were huge as a percentage of gross domestic product. So we cut spending; we raised revenue; we balanced budgets; we turned deficits into surpluses; we stopped raiding Social Security trust funds. We kicked off the longest period of economic growth in our Nation's history. We had the lowest unemployment in 30 years, the lowest inflation in 30 years, the strongest business investment in history. That is our record. We are proud of it. When the talk is about spending, let's look at the comparison. This chart looks at, from 1981 going forward, the difference in the Democratic alternative and the Republican budget before the Senate. Here is the difference. They are at 19 percent of gross domestic product, and we are at 19.3. We are both dramatically down from the peak of 23.5 percent in 1982. We have demonstrated spending restraint. This increase in spending that occurred was totally bipartisan. The increase in spending that occurred was for defense and homeland security almost exclusively. We participated in that spending increase together. We all agreed we ought to increase defense and we ought to increase homeland security. I hope my colleagues, when we talk about the record around here, will reflect on the whole record, and Democrats, despite what we hear all the time, were disciplined in spending, reduced spending when we were in a position to control it, reduced it for 5 years in a row as a percentage of gross domestic product, and balanced the budget. I give them high marks for getting a budget resolution. But what is in this budget resolution deserves low marks. It is red ink as far as the eye can see, with absolutely no concern for balancing budgets, ever. Our friend on the other side said this has a plan to pay off the debt. There is no plan to pay off the debt. If this budget is adopted, it doubles the debt. He is talking about a plan to pay off the debt; there is no plan to pay off the debt. This exploded the debt. If they want to get partisan about fiscal accomplishments here they are: The deficits of the Reagan administration, the Bush administration, the Clinton administration, and now this Bush administration. The only time we have been out of deficit, the only time was when the Democrats were in charge and we actually not only got out of deficit, we stopped the raid on the Social Security trust fund. That is a fact. And the deficits this President proposes are deep and long lasting and could not be timed in a worst way. Here we are on the eve of the retirement of the baby boom generation that will absolutely explode the deficits, and the President's tax cuts will explode in costs at the same time, putting us into a sea of red ink. How much time does the Senator from Delaware seek?

Mr. CONRAD. Mr. President, we welcome the Vice President to the Chamber. We congratulate you on the success of our forces half a world away in Iraq. We deeply appreciate that success. We have concluded action now on the budget resolution. This has been an item of significant debate in the Chamber, and disagreement, but we respect the outcome. Everyone had a chance to express their view. Everyone hopes this works out for the best for our country. I conclude by thanking the chairman of the committee, who worked very hard in difficult circumstances to produce a budget resolution. We congratulate him on his success. We also thank his excellent staff, who were terrific to work with. Although we had, obviously, disagreements on the two sides, the tone of this debate has been excellent. I also thank all of my colleagues who expressed themselves, who participated in this debate and made their feelings known. I conclude by thanking my own staff, my staff director, Mary Naylor, Jim Horney, Sue Nelson, my counsel, Lisa Konwinski, and all of the other staff members who worked long and hard as we considered this resolution. I yield the floor.

Mr. CONRAD. I am happy to yield 20 minutes to the Senator from West Virginia, ranking member of the Appropriations Committee, and also an extraordinarily valuable member of the Budget Committee.

Mr. CONRAD. How much time would the Senator like?

Mr. CONRAD. Mr. President, I say to my colleague, he may get a budget resolution, but there is no fiscal discipline here. Let's not mislead anybody. This is a prescription for record budget deficits, for red ink as far as the eye can see, for the explosion of deficits and debt. This may be a budget resolution, but it is not a prescription for fiscal discipline. People can make all the deals they want. We are going to vote on a budget resolution. This budget resolution authorizes $1.3 trillion in tax cuts. That is what is provided for here. And they can do this fandango dance that they instruct on one hand the Finance Committee to do $550 billion of tax cuts, then turn around and make a supermajority point of order against any actual product of that committee over $350 billion, and the chairman of the committee can come out and commit not to bring back from conference committee anything more than 350. I have respect for the chairman of the committee. When he gives his word, I believe it. I commend him for it. But let's not be under any illusion that that restricts what is happening to $350 billion of tax cuts. It does not. What is in this budget we are going to vote on is $1.3 trillion of tax cuts when we already have record budget deficits, and it also increases spending by $1.1 trillion. Guess what? You are going to have deficits as far as the eye can see. And they are not small deficits; they are huge deficits. And they are going to mushroom when the baby boom generation retires. Is the Senator from West Virginia seeking time?

Mr. CONRAD. Mr. President, while I welcome what I have just heard the Senator from Iowa say, no one should be under any illusion that there will only be $350 billion in tax cuts provided for in the budget resolution. This budget resolution provides for $1.3 trillion of tax cuts. Focusing on the reconciled tax cuts is only half of the story. It is a very important part of the story because those are the provisions that have special protection. There is a whole other part of the tax cut package part of this budget resolution that gets little reported. We are still left with well over $1 trillion of tax cuts. People keep asserting it is a growth package. This is the work of the people who determine the effect of various packages, the very people who are under contract to the White House, the people who are under contract at the Congressional Budget Office who have looked at the President's plan. This is what they say: Initially the plan would stimulate aggregate demand significantly by raising disposable income, boosting equity values and reducing the cost of capital. 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 GDP. Not a growth package, it is a package that hurts economic growth. That is the hard reality. The fundamental reason for it is revealed in the President's own budget that shows his long-term outlook with respect to budget deficits if his budget plans are adopted. This is from his budget document. It shows we never get out of deficit. It shows the deficits explode because the baby boom generation retires and the cost of his tax cut package explodes. The result is a heavy load of deficit and debt that burdens this economy and prevents the kind of economic growth for which we had all hoped. The Senator from Montana is seeking time. I yield 15 minutes to the Senator from Montana.