Kent Conrad

Mr. CONRAD

Mr. CONRAD. The Senator from Connecticut does a very good job of describing the enormous challenge we face. The hard reality is that we have record budget deficits now, and this is before the baby boom generation retires. When the baby boom generation retires, the trust funds will turn cash negative. I want to clear up one thing if I can. The Senator from Oklahoma, the chairman of the Budget Committee, says if you take Medicare and Social Security and lump them together, we are spending more than we are taking in. But what he has done here is mix apples and oranges, if I can say so. First of all, the Social Security trust fund is separate and apart. It is not lumped with Medicare. If you look at the Social Security trust fund, this is what you will see. Right now it is running substantial surpluses. This year the Social Security trust fund will run a $160 billion surplus. We should be using that money to pay down debt or prepay the liability or invest it, but instead we are taking it and using it for tax cuts. We know what is going to happen. In 2018, that trust fund is going to turn cash negative, and when it does, it is like falling off a cliff. At the very time it turns cash negative, the costs of the President's tax cuts explode, meaning only one thing: massive deficits, massive debt. If we look at the Medicare trust fund, and what the Senator from Oklahoma has done, as we know, there is a part A to Medicare. It is largely for hospitals. That has a trust fund. That trust fund is now running surpluses. It is much smaller than the Social Security trust fund, but nonetheless there are surpluses in the tens of millions of dollars. But that, too, is going to go cash negative in 2013 right at the end of this budget period. When it goes cash negative, it goes cash negative in a dramatic way and, again, right at the time the cost of the President's tax cuts explode, leaving us unable to respond to the crisis that is going to occur. If I can conclude by saying what the Senator from Oklahoma has done is he has combined the part A of Medicare, which has a trust fund, the Social Security trust fund, and part B of Medicare, which largely goes to fund the cost of doctors. The part B of Medicare is funded in a completely different way. The Senator from Oklahoma is correct, three-quarters of that money comes not from payroll taxes but comes from general fund transfers. That is what we did long ago. We have had various formulas, but we decided long ago that part B was going to be funded in part by payroll taxes and in part by general fund transfers. Lumping these all together obscures the fact we do have trust funds and that those trust funds are running cash surpluses. They are going to go into massive cash deficit, and to run budget deficits on top of that right before the baby boomers retire, and it is going to force excruciating decisions in the future, either massive cuts in benefits or massive tax increases or some combination. That is the problem I see with the budget plan put to us by the President and put to us by our colleague from Oklahoma.

Mr. CONRAD. Mr. President, I am going to take a few minutes to respond to my able colleague, the Senator from Texas, who is a member of the Budget Committee. He has suggested that on our side we are just out here spending money as much as they have proposed in tax cuts; so it is either take the Democrats' spending or the Republicans' tax cuts, and here come the deficits, and don't worry about the future of Social Security and Medicare. I could not disagree more strongly. Facts are stubborn. The facts show that the assertion by the Senator from Texas simply is without merit. Democrats are not proposing additional spending at the size of the tax cuts proposed on the other side--nothing close to it. The Senator presented a chart that showed a series of amendments offered in the Budget Committee by our side, totaling $440 billion-- additional money for prescription drugs, for education, and for homeland security. Yes, we offered amendments to reprioritize, but we paid for each of those by reducing the tax cut, and every time we went further to reduce the budget deficits. Remember, their tax cuts are $1.4 trillion; with the interest cost, $1.7 trillion. So even if our amendments to change the priorities--more in line with the American people--had been adopted, we would still have been more than a trillion dollars better off in terms of the deficits and debt of this country. That is a fact. The other side is proposing to borrow the money to give these tax cuts and to finance the spending initiatives that are in their plans. They are going to be borrowing money as far as the eye can see--and right on the eve of the retirement of the baby boom generation. Many of us on our side, and I also acknowledge a number on their side, believe that is a mistake. Senator McCain talked this morning about the fact that he thought adding spending or tax cuts at this point is ill-advised. I must say, I agree with the Senator from Arizona. More than that, our colleague is suggesting that somehow their plan reduces deficits. No, it does not. It explodes deficits. We are going to have a debate out here. Let's be truthful with each other and truthful with the American people. Their plan does not reduce deficits; their plan explodes deficits. Two years ago, we had projected surpluses of $5.6 trillion. If we now adopt the President's spending and tax cut plans, instead we will have $2.1 trillion of deficits. Those are not my numbers. Those are the numbers from the nonpartisan Congressional Budget Office. Where did the money go, because that is money over a 10-year period? Thirty-eight percent is going to tax cuts under the President's plan, those already passed and those proposed. That is where the money is going. Twenty-seven percent has gone to spending. Where is that spending? Almost exclusively in increases for defense and homeland security which the President asked for, quite rightly, and which we supported, again, quite rightly. Twenty-six percent is technical changes which simply means overestimations of revenue apart from the tax cuts. The models are not giving the correct answers in terms of actual revenue generated for various levels of economic activity. About 9 percent is the economic downturn. When our colleagues suggest they have a plan that is going to eliminate deficits, that the President's plan somehow does, it does not. We are required by law to exclude Social Security from the calculation of deficits. When we do that, the deficit in 2004 under the President's plan is going to be $512 billion, and those deficits never get below $400 billion every year for the next 10 years. What are they talking about they have a plan that is going to eliminate deficits? There is no elimination of deficits; there is no end to deficits under this plan that the President has put before us. This is from his own budget document. You do not have to take my word for it, take his word for it. This is right out of his budget document, page 43, ``Analytical Perspectives.'' This is what happens, according to the President, looking long term, and what it shows is we are in the ``sweet'' spot now. We are in the good times because this is when the Social Security and Medicare trust funds are producing hundreds of billions of dollars of surpluses. This year alone, the Social Security surplus will be $160 billion. They are taking it all, every penny. And under the President's plan, they are going to do that the entire next decade. Every penny of Social Security surplus will go to pay for tax cuts and other spending. Some of us think that is a disaster for this country. Why? Because very soon the baby boomers are going to start to retire, and then what are we going to do? We should be taking that money and paying down debt or prepaying the liability but not using it to pay other bills, not using it to pay for tax cuts. If there was a private sector firm in America that tried to take the expenses, they would be headed for a Federal institution, but it would not be the Congress of the United States, and it would not be the White House. They would be headed for a Federal facility all right. It would be a Federal prison because that is fraud. Let's just get down and get honest about the fiscal circumstances of the country. The President's budget says we never get out of deficit under his plan, and, in fact, if we adopt his spending plan, if we adopt his tax plan, the deficits explode right at the time we see an explosion of expense to the Federal Government because of the retirement of the baby boom generation, the cost of the President's tax cuts explode, and we have a sea of red ink and deficits and debt that are utterly unsustainable. The head of the Congressional Budget Office told us last year that if we proceed down this path, we will have massive debt, massive tax increases, tax increases of as much as 50 percent, massive cuts in benefits in Social Security and Medicare. Let me predict today, if the President's plan is adopted or anything close to it, very soon our colleagues on the other side will be coming to us with massive cuts in Medicare and Social Security, and if anyone doubts it, just look at the House budget offered this year. They have already started it. They have over $470 billion of cuts to programs such as Medicare and Medicaid, and over $200 billion of cuts to domestic discretionary spending, law enforcement, and all the rest. The jig is going to be up because this does not add up, and this plan drives this country deep into deficits and debt, and that is a fact. That is according to the President's own calculations, his own budget documents. This is not a question that is even a close call as to whether the plan before us increases deficits or reduces them. It dramatically increases them, and it is going to get much worse when the baby boomers start to retire. I was glad to see our colleague put up a chart that showed total outlays and total revenues. It is the relationship between outlays and revenues that determines deficits. Our friends on the other side, or at least some of them, seem to think the only thing that creates a deficit is spending. No, no, no. It is the relationship between revenue and spending that determines whether you have a deficit or a surplus. It is when spending exceeds revenue that one runs a deficit. That is a very simple concept, but somehow it has been lost. That is what creates a deficit. This chart shows the long-term pattern of spending and revenue over the last 20 years. This goes back to 1981. The blue line is the revenue line. The red line is the spending line. You can see we had a big gap back in 1981, 1982. These were the Reagan years. In fact, I will put up what the history of deficits has been under these various administrations. Here it is: When President Reagan came into office, deficits were running about $80 billion. He then pursued the economic policy that is being repeated today, and deficits exploded to over $200 billion a year. They improved marginally before the first President Bush took office, and then they got much worse. In fact, we had the past record deficit under the previous President Bush, $290 billion. President Clinton came in, and we passed a plan in 1993 that every single Republican opposed--everyone in the House, everyone in the Senate. They said it would crater the economy. We can go back and look now. It is very easy to determine who had it right and who had it wrong. Our Republican friends said in 1993: If you pass this plan, it will crater the economy. It will increase deficits. It will increase debt. It will increase unemployment. Let's check the record. We passed the plan in 1993. Every single year of that 5-year plan the deficits were decreased. During this period, we kicked off the longest economic expansion in our Nation's history, the lowest unemployment in 30 years, the lowest inflation in 30 years, and the highest level of business investment in our Nation's history. In 1997, we then passed a bipartisan plan in which we joined together and finished the job and pulled this Nation completely out of deficit and actually stopped the raid on the Social Security trust fund. We stopped taking Social Security trust funds and using them for other purposes, and that was the combined effect of the 1993 plan and the 1997 plan. Actually, the 1993 plan did about 80 percent of the heavy lifting. Then President Bush came into office proposing massive tax cuts and saying we could have it all. He said we could pass the tax cuts and we did not need to worry about deficits, that he had enough margin to be assured that, even if the economy weakened, deficits would not return. Well, he was proved to be wrong, not just because of the tax cuts. Let's be fair. Let's be direct. It is a combination that led us back into the swamp of deficits. In the short term, the biggest effects were the economic slowdown and the attack on this country which required us to increase defense spending and homeland security spending. But over the longer term, over the 10 years of the Bush plan, the biggest reason, as I have indicated, was the size of the tax cuts. It is the biggest single reason for our fiscal deterioration, not in the short term, not in 2003, not in 2002. The biggest reasons in the short term were the economic slowdown and the attack on the country, without question, but over the 10 years of his plan, the biggest culprit is the tax cuts, driving us deep into deficit. These numbers do not even tell the full story because, in truth, the full story is much more serious than these numbers reveal. The truth is, this does not show the effect of taking Social Security trust fund money every year for the next 10 years, in total more than $2.7 trillion of Social Security money taken. Mr. President, I am very pleased to see a former colleague, Senator Mack, join us on the floor. He was an outstanding colleague, who we enjoyed serving with very much, truly a gentleman and somebody who we miss in this Chamber. Nobody did more to add an air of civility to this Chamber than our colleague Senator Mack, and we are delighted to see him back.

Mr. CONRAD. I would be happy to yield.

Mr. CONRAD. No doubt he would if he still were a Member of the Chamber. Let me now turn my attention to the presentation of the amendment that is the next one for consideration because it goes to the central question that we have been talking about. What are we going to do about these deficits? Let me say to my Republican colleagues, it is important to focus on spending, but we cannot just focus on spending. We have to focus on the revenue side as well. And my colleagues cannot say they care about deficits when they are adopting a budget that is going to cost $1.7 trillion in tax cuts and the associated interest costs that are going to drive us deeper into deficit and make believe they care about deficits. That dog will not hunt. Now, we are going to give our colleagues another opportunity to face up to these long-term obligations that we face as a country because the amendment I am offering now takes $1.2 trillion in the tax cuts and redirects them to a reserve fund to strengthen Social Security. Instead of raiding $2.7 trillion, we are going to reduce it. We are going to reduce the tax cut by $1.2 trillion, and we are going to apply it, not for spending but to strengthen Social Security. This is a vote for history. This is a vote for the ages. This is a vote that people are going to look back on, years ahead, and say, who stood up to protect Social Security and who wanted to take the money raised with payroll tax dollars and use it for a tax cut that goes primarily to the wealthiest among us? That is the question before us. I hope every Member of this Chamber will say we ought to reduce the tax cut and use that money to strengthen Social Security. That still leaves almost $200 billion available in tax cuts--actually, something less than that. With that amount of money, we could provide a short- term stimulus along the lines offered by Senator Daschle, a plan that provides important tax relief for working families and small businesses, or we could choose to accelerate the marriage penalty relief and the increase in the child tax credit that were scheduled to be phased in over a period of years when they were enacted in 2001, or we could accelerate the across-the-board tax rate cuts now scheduled to occur in 2004 and 2006. We concluded that was the best way to stimulate the economy. Or we could provide protection for individuals from the alternative minimum tax. My amendment would not prevent us from providing a significant increase in the amount of investment small businesses could immediately deduct rather than depreciating over a number of years. The bottom line is that the amount provided for stimulus in our amendment would allow for considerable flexibility in responding both to the needs of our economy and of our taxpayers. My amendment does not dictate how these resources ought to be used to strengthen the Social Security Program over the long term. Rather, our amendment simply reserves budget resources so that when Congress does act to strengthen Social Security, resources will be available to do it. Nearly every Social Security reform plan that has been proposed requires additional resources. In fact, the plans recommended by the President's own commission to strengthen Social Security requires over a trillion dollars of resources from the general fund. There are a variety of ways that these resources could be used to strengthen the Social Security Program. Some of our colleagues might prefer to use these resources to pre-fund the Social Security benefit through individual accounts or collective investments. Others might support using these resources to transfer revenues to the Social Security trust funds or to pay down debt and free up future resources to meet benefit commitments. Until Congress and the President act to strengthen this important program, the resources in this reserve fund would be dedicated to deficit reduction. Why is this amendment important? Today, we are at an important fiscal crossroads. I think we all know where we are headed. We are in record deficit, and according to the President's own documents, these are the good times. This is the budget sweet spot. We are ready for a leap off the cliff if the proposal before us by the President is adopted. I hope my colleagues will take a close look at this amendment. We know that Social Security goes cash negative, the trust funds, in 2018. We know that Medicare goes cash negative in 2013 and becomes insolvent by 2026. We know these challenges are real. They are not projections. The baby boom generation has been born. They are alive today. They are eligible for Social Security and Medicare. If we put up the chart that shows the future of Social Security, we see that the trust fund now is running substantial surpluses, but they turn to massive deficits after 2018. This is going to happen, and we can either prepare for it or fail to do so. The choice is ours, and the most fundamental choice is going to be made very soon. It is going to be made when we determine the outlines of this budget resolution. It is not just Social Security; it is Medicare as well. The Medicare trust fund is running surpluses now but will turn to massive cash deficits starting in 2013. The question before us is, How do we respond? The CBO Director, Dan Crippen, said to us: Put more starkly, Mr. Chairman, the extremes of what will be required to address our retirement are these: We will have to increase borrowing by very large, likely unsustainable amounts; raise taxes to 30 percent of GDP, obviously unprecedented in our history; or eliminate most of the rest of Government as we know it. That is the dilemma that faces us in the long run, Mr. Chairman, and these next 10 years will only be the beginning. Unfortunately, he has it right. What the President has proposed is truly stunning in terms of the long-term costs of the tax cuts he has proposed. This chart shows the Social Security shortfall, according to the Center on Budget and Policy Priorities, some $4 trillion in the 75-year period; medicare shortfall, $5 trillion. The tax cuts the President proposed and which have already been enacted are $12 trillion. We can take a bad situation and make it much worse or we can begin the process of being serious about our fiscal challenges. That means yes, being tough on spending. It also means being tough on the size of future tax cuts. I urge my colleagues to give careful consideration to this amendment. I ask unanimous consent my colleague, Senator Corzine, be listed as a cosponsor.

Mr. CONRAD. Mr. President, I send the amendment to the desk.

Mr. CONRAD. Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974, I move to waive the applicable sections of that act for purposes of the pending amendment. I ask for the yeas and nays.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. That is the amendment I offered earlier that we will be voting on at 5 o'clock. We are now on my second amendment, an amendment that takes $1.2 trillion of the proposed tax cut and uses it to strengthen Social Security. It is absolutely correct that the other amendment I have offered would create a requirement to a supermajority vote to have new spending initiatives, as well as new tax cuts, other than spending for national defense and homeland security and other than for tax cuts that would provide for an immediate lift to the economy.

Mr. CONRAD

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

Mr. CONRAD. Mr. President, I rise today to offer the first amendment to the budget resolution pending before us. I believe this is a critically important amendment as our Nation is on the brink of war. After the President's speech of last night, I don't know what could be more clear than we are on the eve of conflict. The budget before us, submitted by the President, the budget that came out of the Budget Committee, contains no provision for that conflict. There is no money for conflict. There is no money for reconstruction. There is no money for occupation. There is no money. Some have said, well, they have looked at the history and found that in the past wars were not budgeted for until operations have begun. I suggest operations have begun. We have nearly a quarter of a million troops poised on the border with Iraq. We have hundreds of thousands of reservists who have been called up. We have five carrier battle groups in the area. Operations have begun. We have special forces in Iraq at this moment. We are conducting air operations over Iraq at this moment. Who can assert that operations have not begun? In the past, the Second World War, the First World War, Uncle Sam delivered a message to the American people: It takes taxes and bonds. And the message was that it takes common sacrifice to defend this Nation. But that is not what this budget says. This budget says, let's have a $1.5 trillion tax cut that goes primarily to the wealthiest among us before there has been any assessment of war cost or occupation cost or reconstruction cost or humanitarian aid cost. That strikes many of us as unwise. Many of us believe we ought to take a moment and do a calculation of what this war is likely to cost before we engage in new spending initiatives or before we launch a whole other round of significant tax cuts, given the fact we are already in deep and record deficit. The deficit under the chairman's mark for this year, excluding Social Security, will be over $500 billion in a $2.2 trillion budget. That is a massive budget deficit by any calculation. As I have indicated, it includes no money for potential war cost, none. The amendment I am offering says this: The Senate may not consider legislation that would increase the deficit until the President submits to Congress a detailed report on the overall estimated costs of the war. This measure would be enforced with a 60-vote point of order. In other words, if there were more than 60 votes in the Senate to add to the deficit, we would be able to do that. There are two exceptions. We could add the spending for legislation relating to national or homeland security. That just represents common sense. We certainly don't want to limit our ability to respond to any threat. So we would have an exception from the 60-vote point of order in adding to the deficit for expenditures for national defense or homeland security. The second exception would be an economic recovery and job creation package which does not increase the deficit over the time period 2005 to 2013. In other words, we would be saying the following: We are going to have a 60-vote point of order against any measure that increases the deficit with the exception of additional spending for national defense or homeland security and with the additional exception of a stimulus package for this economy that does not add to the deficit in the years 2005 to 2013. The stimulus package could add to the deficit in 2003 and 2004 but not beyond. I hope my colleagues will think carefully about what this amendment will do and what is in the budget before us. In the Senate Republican plan, there is no money for any part of the conflict. We learn from news reports that there will be a supplemental sent up to us by the White House for between $60 and $95 billion. That means the deficit in 2003 will approach $600 billion when we exclude Social Security, truly a massive deficit. It has been asserted that we don't know the cost of conflict. That is true. That is understandable. The one thing we know, though, is that the cost of conflict is not zero. That is the number that is in this budget. That is what the President has sent us as a budget, that there is no cost. That defies common sense. We know there is cost. We know there are substantial costs. Here are some of them. We are reading in the press that the defense supplemental, the war supplemental the President may send us will be in the range of $60 to $95 billion. I read in the paper this morning that it may be $80 billion. Humanitarian aid, we know we are going to be responsible for refugees, perhaps millions of people requiring feeding, requiring shelter, dispossessed by the conflict. Those estimates, on a conservative side, are $1 billion. Reconstruction of Iraq, not included in the budget, there is a various range of estimates; $30 billion over 10 years, a conservative estimate. The occupation of Iraq, there is no provision in the budget. Estimates run from $17 to $46 billion a year. Aid to allies--Israel, Jordan, Egypt--not provided for in the budget, estimates of the cost run from $6 to $17 billion. We have not listed Turkey here. We negotiated an agreement with Turkey for some $6 billion. There are discussions with Russia, multiple billions of dollars in terms of a package for them. And the war on terrorism in 2004, no additional provision--estimates that that could cost $19 billion. None of it is included in this budget. Does that make any sense when we all know that the conflict is about to start and that we have already experienced substantial costs just moving our forces into position to launch this attack? Many of us don't think so. Congress Daily reported on March 14 the following: Vice President Cheney met with Senate Majority Leader Frist Thursday to discuss, among other things, the timing of a spending request on military action in Iraq. It is not expected that such a request would come until after the House and Senate complete floor action on the budget resolution, a key aide said. That report went on to say: Having a supplemental that could total somewhere between $65 billion and $95 billion come up while the tax cuts in the budget resolution are being debated could threaten the Republicans' economic agenda. House leaders have also said they want the supplemental war request delayed as long as possible to provide breathing room between the tax cuts and war spending. I hope this is not true. I hope very much that we are not engaged in a cynical attempt to hide costs from people so that we make the tax cuts more palatable. If that is true, that is very disturbing. We ought to have all the cards on the table. We ought to be telling the American people the truth as completely and as fully as we can know it. And the truth is, this war is going to cost a lot of money. It ought to be included in our calculations to the best of our information. We know from previous conflicts that initial war cost estimates are often low. Go back to the Civil War. The estimates were it was going to cost $200 million. The actual cost was $3.2 billion, a 1,500-percent increase over initial estimates. World War II: Initial estimates were that it would cost about $112 billion. It wound up costing over $195 billion, a 75-percent increase. Vietnam: Initial estimates were $12.3 billion. It wound up costing $111 billion, an 800-percent increase over the initial estimates. We can all hope that will not be the case here, and I do not in any way suggest we ought to budget for those kinds of dramatic increases over what the initial estimates are. But at the very least we ought to be budgeting for what the estimates are. The President spoke last night. He spoke clearly. He spoke directly. He gave Saddam Hussein and his cadre 48 hours to get out of Iraq. The reports are this morning that Saddam Hussein and his group are not going to leave Iraq. There are already indications the President may address the Nation tomorrow. We are discussing and debating the budget resolution now. We ought to include our best estimates for this conflict in what we are doing now. I go back to the amendment I am offering. It says we should have a 60-vote point of order against anything that adds to the deficit with two exceptions: one, additional costs associated with national defense and homeland security, and, two, additional tax cuts as part of a stimulus package that would be effective this year and next. Those would be the two exceptions--commonsense exceptions. Other than that, we should create a hurdle to additional new spending or additional tax cuts when we do not know the cost of this conflict. When we look back at previous conflicts, this is what we see. This has been the response of Congress and the administration in every conflict America has experienced. The Revolutionary War: Excise and property taxes were enacted to pay for it; War of 1812: Excise and sales taxes were enacted to pay for it; Mexican-American War: There were no Federal taxes during this period; the Civil War: Excise, inheritance and income taxes were enacted to pay for it; the Spanish- American War: Excise and inheritance taxes were raised and war bonds were sold to pay for it; World War I: Income, estate, and corporate taxes were raised to pay for it; World War II: A major expansion of corporate, excise, and income taxes, and war bonds were sold to pay for it; Korea: Income taxes were raised to pay for the war; Vietnam: Business and income taxes were cut in the early stages, and in the midstages they were increased to pay for the war; in the Persian Gulf, the 1990 income tax increase was passed; and in this war, instead of paying for it, the President is saying: Let's have a $1.9 trillion tax cut. That is the cost of the tax cut and the associated interest costs, even though we are already in deep deficit--in fact, in record deficit. We are asking our troops to perhaps make the ultimate sacrifice. We are asking them to be prepared to risk their lives. It seems to me we ought to be asking the rest of the American people to sacrifice as well for this conflict. We certainly at the least should not be having a massive tax cut when we are already in deep deficit and have no idea what the war costs are. We may need every dollar to do what is needed to prevail in this conflict and respond to the terrorist threat that is expanded by it. This morning we awoke to a recommendation from Mr. Ridge, the head of the Department of Homeland Security, to move up the threat level as a result of potential war with Iraq. Intelligence services are telling us it is a virtual certainty that there will be a terrorist attack against the United States in this timeframe. We ought not to be adding to the deficit except for national defense, homeland security, and a stimulus package. Anything beyond that is risky at a time when we are on the brink of war. I hope my colleagues will think about this amendment. It requires a 60-vote point of order. That means if there is some other contingency other than national defense, other than homeland security, other than a need for a stimulus package, we could do it, but it would take a supermajority to add to the deficit when we do not know the cost of the war. I hope colleagues will think very carefully about this amendment before we vote on it. My amendment is at the desk, and I call it up.

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

Mr. CONRAD. Mr. President, I thank the Senator from Michigan for her remarks and for her leadership on the Budget Committee. She has been somebody who is dedicated to fiscal responsibility, and also addressing the priorities of the American people. Whether it is improved education for our children, or expanded health care, she has been a champion of all of that. I say to my colleagues, last night we had a discussion about a number of the issues facing us in this budget. As we discuss our current fiscal circumstance, I wish to remind people where we are, compared to where we thought we were going to be. This is critically important to understanding the choices before us. Two years ago we were told by the administration that we would have $5.6 trillion in surpluses over the next decade. The Congressional Budget Office produced this chart that showed the possible range of outcomes from a worst-case scenario to the best-case scenario with respect to budget deficits and possible budget surpluses. The center point of that range was the $5.6 trillion of surpluses over the next decade. In other words, they said you can have a wide variance of outcomes. You could actually have deficits, or you could have even larger surpluses than the $5.6 trillion that was the most likely outcome that they projected, as did the administration. At the time, the President was proposing a very large tax cut and he said we can have it all. He said we can have a large tax cut, major defense buildup, more money for education, more money for health care. He said we could have a maximum paydown of the debt and protect Social Security--the Social Security trust fund surpluses. We could stop the raid. Well, after the Congressional Budget Office showed us this range of possible outcomes, I tried to alert our colleagues that betting that we could have it all was probably a risky bet, and it would perhaps be a wiser course not to count on any 10-year forecast coming true, and that we had to take account of the possible downside risk as well as the upside potential. The will of this body was to charge ahead and bet that all those surpluses would come true. Now we know that was a bad bet; it was a risky bet. When we go back and actually do a line that shows where we actually are compared to the projections, we see we are below the bottom. Not only are we not at the midpoint of the possible range of outcomes with respect to the surplus, we are below the bottom. The result of that, of course, is deficits are exploding. Under the chairman's mark, we are going to have a deficit this year-- not counting Social Security. If we treat Social Security like a trust fund, as the law requires, we will have a deficit this year of $503 billion. That is before any war costs. There are no war costs in that calculation. If the war cost is $100 billion, as many estimate in the first year, the deficit this year will be $600 billion. We have never had a deficit of more than $290 billion in our entire national history; $600 billion in 1 year would be staggering. It is a fundamental reason I am offering the amendment before us. The amendment says you cannot add to the deficit unless you can get a supermajority vote in the Senate. You have to get 60 votes or more to add to the deficit, with two exceptions. We would not have that requirement for additional expenditures for national defense or homeland security. We would not have that supermajority requirement for a stimulus package to give lift to the economy this year and next when we are forecasting economic weakness. If this does not concern our colleagues about the direction of the fiscal condition of our country, I don't know what it will take to make them concerned. Not only do we see enormous deficits now, but we see it throughout the rest of the entire decade. Again, that is without any war costs. That is without any fix to the alternative minimum tax which now affects 2 million Americans and will affect 35 million Americans by the end of this decade. On top of that, under the chairman's mark, under his budget proposal, we see they will be taking $2.7 trillion of Social Security surpluses over the next decade and using those to pay for the tax cut and other expenditures. This is incredibly unwise. The baby boom generation is about to retire. The leading end starts to retire in 2008. When that happens, the cost to the Federal Government of Medicare and Social Security will increase dramatically because the number of people who are eligible increases dramatically. Instead of using this money for tax cuts and other expenditures, we should be using it to pay down the debt or to prepay the liability we all know is to come. Instead, the money is being spent. It is being used to fund tax cuts. It is being used to fund other expenditures. These taking of Social Security surplus funds and using it for other purposes will create an extraordinarily difficult set of choices for a future Congress and a future President. In many ways what I have already said understates the problem. In talking about deficits, we do not talk about the debt. Yesterday, I talked about the publicly held debt. That is the debt held by the public in this country. The President told us 2 years ago we would be virtually debt free by 2008 if his plan were adopted. We now know instead of being debt free, we will have over $5 trillion of debt by 2008. That is the tip of the iceberg because that is the publicly held debt. That does not count the debt to the trust funds because we are taking the Social Security surpluses, using them for other purposes. That is also debt. That is also debt that has to be paid back. If we look at that debt under the chairman's mark, we can see it will equal $12 trillion by the end of this budget period by 2013. In 2002, the gross debt was just over $6 trillion. In that period of time, we will be doubling the debt, doubling the debt right on the brink of the retirement of the baby boom generation. That is why in the President's own review of his budget, he provided this chart. It is the long-term outlook for the country. What it shows is we are in the sweet spot now. Even though we are running record deficits, a deficit that may approach $600 billion this year, these are the good times, according to the President. This is what happens, he says, if we adopt his spending and tax cut proposals. It is just like falling off a cliff into an ocean of red ink. That is what will happen. Right at the time the costs of Government explodes with the cost of the baby boom generation, the cost of the President's tax cut explodes. What it does is create deficits that are totally unsustainable. It will mean massive debt, massive tax increases, massive benefit cuts. That will be the only way out of this ocean of red ink. This chart should alert everyone as to where we are headed. It shows the size of the Medicare trust fund surpluses in blue that ultimately become deficits, the size of the Social Security trust fund surpluses are in green, and it shows the size of the President's tax cuts in red. Right now there is a fairly rough balance between the surpluses of Social Security and Medicare and the size of the President's tax cuts, both those enacted and those proposed. But look what happens when the trust funds go cash negative in 2016 and 2017. At the very time they go cash negative, the cost of the President's tax cuts explode, driving us into deep deficits, deep debt, deficits that will reach over $1 trillion a year. No one is going to loan us that kind of money. That is not going to work. These are deficits that are absolutely unsustainable. The head of the Congressional Budget Office, who was put in place by our friends on the other side of the aisle, told us last year if we go in this direction, it will mean massive debt; it will mean unprecedented tax increases, tax increases of 50 percent; and it will mean massive benefit cuts. I hope someone is listening. It is as though deficits are not a concern anymore. They better be because it is going to have real effects on real people, and they are going to be dramatic effects. They are going to be harshly negative. We are not paying attention to what we all know is coming. This is not a projection. Those baby boomers have been born. They are alive today. They are eligible for Social Security and Medicare. Those costs are going to explode as they retire. Unlike the 1980s, some of my colleagues say: Gee, in the 1980s we had big deficits and it all worked out--we had time to get well, then. We had time between those massive deficits and the retirement of the baby boom generation. This time, there is no time to get well. The baby boomers are going to retire. That is why the amendment I am offering is important. It says you have to have at least 60 votes to increase the deficit, except for expenditures for national defense and homeland security and except for tax cuts that are part of a package to stimulate the economy to get it growing again in 2003 and 2004. Other than that, you have to have a supermajority to add to the deficit. This is a consequential debate. At some time, the history of the fiscal affairs of our country will be written and looked back at this time and people will be held accountable for the choices they made. I hope they are wise choices. I see my colleague from Iowa is present, and I understand he has remarks. I yield the floor.

Mr. CONRAD. Mr. President, I yield 10 minutes to the Senator from Iowa. Iraq

Mr. CONRAD. Another 5, if that is OK. We have another speaker who is scheduled in that slot.

Mr. CONRAD. Mr. President, if I could interrupt the Senator and ask the time be charged to the resolution, and the other time that has been allotted to the Senator from Iowa be charged to the resolution rather than the amendment.

Mr. CONRAD. Does the Senator from New York seek time?

Mr. CONRAD. I yield 5 minutes off the resolution to the Senator from New York.

Mr. CONRAD. I see my colleague from North Dakota is seeking time. How much time does the Senator wish?

Mr. CONRAD. I yield 15 minutes to the Senator from North Dakota.

Mr. CONRAD. I am happy to yield 3 additional minutes to the Senator from North Dakota.

Mr. CONRAD. How much time does the Senator seek?

Mr. CONRAD. Mr. President, I yield 5 minutes off the resolution to the Senator from Massachusetts.

Mr. CONRAD. Mr. President, it is my understanding we have a vote at noon; is that correct?

Mr. CONRAD. Mr. President, the floor leader, the chairman of our committee, is not in the Chamber at the moment, so I will not propound a unanimous consent request. But I would ask for his staff to consider that we permit another amendment. I see the Senator is in the Chamber now. I say to the chairman, I was just saying that we have this vote. Then it would be my hope that, at some point soon thereafter, we could have a vote on my amendment. I am told we need a window until 3 o'clock for votes. Maybe we could have an opportunity to offer additional amendments in that interim period and stack votes at 3 o'clock, if we are limited in our ability to vote until then.

Mr. CONRAD. Yes. The intention was to do that. We would have the vote at noon. If the vote is done at around 12:30, that is why I am raising the question now of being able to offer another amendment, so we could use that time productively.