Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I say to my colleague, the Senator from Oklahoma, that the Senator from Oklahoma argues against himself. He gives advances as a reason to oppose putting it on this measure, that it will never pass both Houses, and that a budget has to pass both Houses. I say to my colleague, one of the key reasons we have not brought the budget resolution to the floor is because the House passed a 5-year budget when the requirement of the law is a 10-year budget. The President submitted a 10-year budget. We passed a 10-year budget through the Senate Budget Committee. The House passed a 5-year budget, even though they cut taxes and committed to spending money outside the 5-year window. In addition to that, they used rosy scenario forecasts.

Mr. CONRAD. Mr. President, how much time remains?

Mr. CONRAD. Madam President, this is perhaps one of the most challenging years we have faced dealing with the budget of the United States. That is why moments ago I sent a modified amendment to the desk. Let me just outline what is included in that amendment and why I think it is so critically important that we adopt it today. The Conrad-Feingold amendment sets discretionary spending limits for 2003 and 2004. It also extends the 60-vote points of order protecting Social Security, enforcing discretionary spending caps, and requiring fiscal responsibility, and it extends for 5 years the pay-go and other budget enforcement provisions that otherwise expire on September 30. Let me discuss the level of spending that is covered by this amendment. For 2003, it would provide a discretionary spending limit of $768.1 billion. That is precisely the same as the President's budget for 2003. The President sent us a discretionary spending level of $768 billion. I have talked with Mr. Daniels this morning, the head of the Office of Management and Budget. He believes this number is too high by some $9 billion. Even though that is the President's number, even though that is the number the President sent us, we have not adopted the President's policy because the President has proposed switching certain accounts from mandatory spending to discretionary spending. Those are the retirement requirements of people in the Federal Government. In other words, he has proposed switching the retirement accounts that come out of the budget of the various agencies from mandatory spending to discretionary spending. Obviously, that would make discretionary spending more by $9 billion. That is included in the President's proposal. We have not adopted that part of his proposal. Their argument is that would shift back to the mandatory side of the equation and reduce the $768 billion by $9 billion. That is true. They are correct about that. It is also true that their budget needs to be adjusted in a number of ways, I believe, in order to secure passage in the Congress. The President has cut transportation funding, highway construction, and bridge construction by 27 percent, by $9 billion. We proposed adding back about two-thirds of that, about $6 billion. That money has to come from somewhere. The President has proposed cutting law enforcement by over $1 billion. I do not think that is realistic at a time when we face terrorist threats to the United States. The President has proposed a smaller amount for education that is even provided for in his own No Child Left Behind legislation. That is going to have to be acknowledged and dealt with before we finish our work. We are not going to cut that program of No Child Left Behind that the President talked about all across the country. There are other provisions as well that are going to have to be addressed. We are going to need that $9 billion to meet the needs of the country. Again, it still leaves us with an overall amount that is precisely what the President sent us in his own budget. In addition to that, there is a second year of budget caps, of restrictions on what can be spent, and that amount is $786 billion. That is about a 2-percent increase over this year. That is a very sharp restriction on spending, especially given the fact we are under attack, especially given the fact the President, no doubt, will be asking more for defense, more for homeland security. But we have agreed to a cap this year that is exactly the number the President sent us in his budget, and we have agreed on a cap for spending for next year at $786 billion, about a 2-percent increase over where we are now. In addition, the amendment I have sent to the desk limits advance appropriations. This was raised as an issue by Members on the other side of the aisle. They wanted a restriction on advance appropriations, so we included that in this bill. And we have included another request from the other side of the aisle to establish a 1-year defense firewall. What that means is, the money that is allocated for defense would go for defense and could not be used for other purposes. This amendment establishes a supermajority point of order in the Senate to enforce a defense/nondefense firewall in 2003. Again, this was in response to requests from Members on the other side of the aisle. This is the circumstance we face that I think we need to keep in mind as we consider this amendment. Last year, the Congressional Budget Office told us we could expect some $5.6 trillion of budget surpluses over the next decade. That is what we were told just a year ago--nearly $6 trillion of surpluses. Some of us questioned that. Some of us said: Do not rely on a 10-year forecast. There is too much risk associated with that. But others said: No, there will even be more money. That is what we were told repeatedly. Now we get to June of this year and look at the difference a year makes. Not only do we not see any surpluses for the next decade, we see deficits of some $600 billion over the next 10 years. Where did the money go? This chart shows our analysis of what happened to those surpluses, and the biggest chunk went for the tax cuts that were enacted last year and the additional tax cuts passed this year. Forty-three percent of the disappearance of the surplus went to tax cuts; 21 percent went to increased spending as a result of the attack on this country--increased defense spending, increased homeland security spending. That is where all of the increase has gone. Twenty- one percent is from economic changes, that is, the economic slowdown that occurred. That is where 21 percent of the disappearance of the surplus occurred. And the last 14 percent is technical changes. Largely, those are underestimations of the cost of Medicare and Medicaid. That is where the money went, primarily to tax cuts; the next biggest is increased spending as a result of the attack on the country; the next biggest reason was the economic slowdown, and actually those two are equal; and the final and smallest reason is underestimations of the cost of Medicare and Medicaid. That is where we are. What it tells us, as we look over an extended period of time, a 10-year period going back to 1992 when we were in deep deficit, and when the husband of the occupant of the chair came in as President of the United States and fashioned a 5-year plan in 1993 that was very controversial to raise revenue and cut spending, we can see that plan worked. Each and every year, we were pulling ourselves out of deficit under that plan. In 1997, we had a bipartisan plan that finished the job. As a result, we emerged from deficit. We stopped using Social Security funds for other purposes, and we were running surpluses, non-trust-fund surpluses for 3 years. Then last year we had the triple whammy: the tax cut that was too large, the attack on this country, and the economic slowdown. We can see now that we are headed for deficits for the entire next decade. That is Social Security money being taken to pay for the tax cuts, being taken to pay for other items. In fact, we now estimate some $2 trillion will be taken from Social Security over the next decade to pay for the President's tax cuts and other spending initiatives. All of that matters, and it matters a lot because of where we are headed. The leading edge of the baby boom generation starts to retire in 6 years. It is hard to believe, but that is the reality. What that tells us is those surpluses in the trust funds that have helped us offset these deep deficits are going to evaporate; in 2016 the Medicare trust fund is going to turn cash negative; and in 2017 the Social Security trust fund is going to turn cash negative. Then it is going to be like falling off a cliff. This is a demographic time bomb that we are facing as a society. It is unlike anything we have ever faced before because always in our history the succeeding generation has been much larger than the generation retiring. In very rapid fire order, the number of people who are eligible for Social Security and Medicare are going to double. We are headed for a circumstance in which there will only be two people working for every retiree. If that does not sober us, if that does not inform our actions, I do not know what it will take. The first thing we need to do is get these budget spending caps in place for next year and the year thereafter, and couple that with the budget disciplines that give us the chance to fend off ideas for greater spending and for more tax cuts that are not paid for. Yes, we can have spending initiatives. They have to be paid for. We can have additional tax cuts, but they have to be paid for; otherwise, we are going to dig this hole deeper and deeper. There are real consequences to digging that hole deeper. Mr. Crippen, the head of the Congressional Budget Office, told us that when he appeared before the Senate Budget Committee. He said, in response to a question from me: Put more starkly, Mr. Chairman, the extremes of what will be required to address our retirement are these: We'll 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 the 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. I do not know how to say this with more force or more persuasiveness, but we are coming to another moment of truth on this journey in our economic future. Some will rise and say this spending amount is too much; that $768 billion is $9 billion more than the President proposed, even though the $768 billion number is precisely the number the President sent us. Some will say we ought to wait. Some will say there is some other reason to be opposed. Another moment of truth is coming very soon, and the question is, Are we going to have the budget disciplines that otherwise are phased out at the end of September? Are we going to have those to discipline the process as we proceed this year? Are we going to have a budget number that can inform the appropriations process as we proceed, a budget number, I again say, that is identical to the budget number the President sent us? I am swift to acknowledge we have adopted his number but not his policy. It is absolutely correct he wanted to switch $9 billion from mandatory spending to discretionary spending, and when we do not do that, it allows us to use that $9 billion in a way different from the way he proposed. I say to my colleagues, do they really want to adopt a 27-percent cut in highway and bridge construction that puts 350,000 people out of work in this country? I do not think that is the will of the Congress or the will of the American people. We have proposed a reduction from what was spent last year but not as big a reduction as the President has proposed. Are we really going to cut the COPS Program by over a billion dollars when we have a terrorist threat to this country? Are we really going to take police off the street? I do not think so. Are we really going to cut the President's signature education program, No Child Left Behind? I do not think so. Those are the fundamental issues that are before us now. I emphasize to my colleagues that not only is this a spending cap for this year at the level the President proposed in his budget, but in addition to that, it is a spending cap for next year of $786 billion. That is an increase of over 2 percent. That is very tight fiscal constraint. I am ready to take the medicine to get us back on a course to fiscal responsibility, and I believe most of my colleagues are as well. This amendment is the product of weeks of negotiation between Republicans and Democrats and is a good-faith effort to capture in an amendment the positions of Democrats and Republicans on what should be contained in the budget for this year and next; what the limits should be on spending for this year and next; what should be the budget disciplines that are continued so we have a way of enforcing fiscal restraint, and it contains a 1-year defense firewall in the Senate, something requested by Members on the other side. For those of us who believe it is critically important to have a budget process in the Senate, for those of us who believe it is critically important to have budget disciplines in place, this is our opportunity. This is our chance. It may not come again. I urge my colleagues to very carefully consider their votes on this measure. This should not be a Republican vote or a Democratic vote. This should be a vote for the country. This should be a vote for the Senate. This should be a vote that sends a signal we are serious about reestablishing fiscal discipline. This is a vote that should send a signal that fiscal discipline matters to the economy of this country. This should be a signal to the markets that this Congress is serious about fiscal responsibility, and this should be a signal that while the President has asked for the second biggest increase in our debt in our Nation's history, all of us are committed to getting back on track towards a course of reducing the debt of the United States, especially in light of the coming retirement of the baby boom generation. I yield the floor.

Mr. CONRAD. How much time remains?

Mr. CONRAD. Madam President, I thank my colleague. We have heard some arguments advanced by the Senator from Texas as to why Members should not vote for this amendment. The Senator has said this has not gone through the budget process. I reject that argument by the Senator from Texas. The fact is the numbers that are before us are exactly the numbers that passed the Senate Budget Committee on the budget resolution that I took through the committee. That is a fact. The fact is, I reported out of the Budget Committee, pursuant to the budget I proposed, $768.1 billion in discretionary spending for this year. That is precisely the same as what was in the President's budget. It is true we did not adopt his policy. We did adopt his number. The Senator says this is outside what the Budget Committee has recommended. It is not outside what the Budget Committee has recommended. It is precisely what the Budget Committee recommended in the resolution I offered--$768 billion this year, $786 billion next year. Where is the money going? I say to my colleagues who think that is too much money, here is where the money is going: Last year we spent $710 billion. The President has asked for, and we have agreed to, a $45 billion increase for national defense, every penny of it requested by the President of the United States. The President asked for an additional $5.4 billion for homeland security. We have endorsed that, every penny of it requested by the President of the United States. Now there is another $7 billion, $7 billion on a base last year of $710 billion. That is a 1-percent increase available for all the other functions of Government, after the increase asked for by the President for defense, after the increase asked for by the President for homeland security. If we look at the amount of money that is in this budget for this year, the $768 billion, we have provided for the year thereafter an increase of $18.4 billion. That is an increase of 2 percent, and that is precisely what was in the budget resolution that passed the committee. It is true, we have not yet considered a budget resolution on the floor of the Senate. That is not unprecedented for June. There have been many times we have not concluded work on a budget. In fact, 4 years ago, we never did complete work on a budget through the whole process. So we know the reality. We know what has occurred in the past. The fact is, we have passed a budget resolution through the committee. The budget numbers that are in that document are the numbers that are before us today. They represent serious constraint on spending for both this coming year and the year thereafter. When the Senator from Texas says there is a $50 billion increase over last year, it is actually a $58 billion increase. But where is it? Again, I remind my colleagues, it is in defense; $45 billion of the increase is in national defense, every penny of it requested by the President of the United States. Is the Senator from Texas saying he is against that increase in defense? And $5.4 billion is an increase in homeland security, every penny requested by the President of the United States. Is the Senator from Texas against that increase in homeland security requested by the President of the United States? The only other money is $7 billion for everything else, a 1-percent increase. Let's get serious about budgets and let's get serious about what is being discussed. The Senator from Texas raises advanced appropriations. Advanced appropriations have been done for many years. Why? Because the school year does not fit the fiscal year of the Federal Government. The Federal fiscal year ends at the end of September. Everybody knows the school year does not end until May or June. So advanced appropriations were adopted to fit the reality of the school year in America. There is nothing wrong about that. There is nothing wrong with that at all. The Senator from Texas says the House will never agree. That is not our job, to write a budget that agrees with the House. Our responsibility is to write a budget for this Chamber. We will then negotiate with the House on an overall agreement. The first thing we have to do is reach a conclusion in this Chamber. What we are proposing, once again, for discretionary spending for fiscal year 2003, is exactly the same number the President sent up in his budget, $768 billion. That is what was in my mark that passed through the Budget Committee and that is what we are proposing. It is true it is not the same policy as the President proposed. He proposed a different way of spending the money, but he proposed exactly that same number. I am proud of the way the Budget Committee has performed. The Budget Committee had dozens of hearings and produced a responsible document, one that restrains spending, one that did not contain a tax increase or any delay in the scheduled tax cuts, but one that also called on the Congress to put in place a circuitbreaker mechanism so that next year it will be a responsibility of the Budget Committee to come before our colleagues with a plan to stop the raid on Social Security. The Budget Committee had more debt reduction than the President proposed, less deficits than the President proposed and said that additional tax cuts can be had, but they ought to be paid for, and to put in place serious restraint on spending, not only for this year but in the years following. I am proud of that budget resolution. I am proud of the parts of it that are before us now, that give our colleagues a real opportunity to choose. Are we going to have a budget for this coming year and budget caps for the next year? Are we going to have a continuation of the budget disciplines that are critically important to keep this process from spinning out of control or are we not? That is the choice that is before the body. I want to again thank my colleague from Wisconsin who has been a valued member of the Budget Committee and who came to the floor with something he negotiated on both sides of the aisle. I then became involved with him in an effort and we have negotiated with many more Members on both sides of the aisle. I think we have a responsible package, and our colleagues are going to have a chance to vote in a few moments. I hope they will carefully consider the implications of a failure to pass this amendment. I yield the floor, and I reserve the remainder of our time.

Mr. CONRAD

Mr. CONRAD. Certainly.

Mr. CONRAD. No. I think the Senator stated it well. This provides, No. 1, a budget for this year and a budget for next year and caps spending at those amounts. The number for this year is the number the President sent us, $768 billion. It is not the same policy the President sent us, but it is the same total amount of spending that the President sent us. In addition to that, there are the various budget disciplines that expire at the end of September that Senator Feingold is extending in his amendment. I might say, I know Senator Feingold worked this out on a bipartisan basis. There were other Senators on the other side of the aisle who were involved with negotiating this amendment. I can tell you there have been many discussions with Members on both sides with respect to the number and with respect to a continuation of the budget disciplines. This was not something that was done in a partisan way or just on one side of the aisle. This is the result of lengthy discussions over an extended period of time with Senators on both sides.

Mr. CONRAD. I certainly would, but I think, in fairness, the question should be directed at my colleague. He is the author of this amendment. I would certainly be willing to do whatever the Senator from Wisconsin is willing to do. I would certainly accept a reasonable time limit.

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

Mr. CONRAD. Mr. President, I want to stand and commend my colleague, Senator Feingold, for his initiative with respect to the budget circumstance facing the country and the Congress. Senator Feingold has crafted an amendment that represents a compromise on the question of the budget for this year. It is critically important that we adopt a budget for this year, and it is also important that we have the budget disciplines extended. I hope my colleagues realize what we face. In the absence of an extension of the budget disciplines, the budget points of order, the pay-go provisions all expire on September 30. That would mean the things we have used to control spending and to exercise fiscal discipline are gone. They are gone. That means that as we go through the appropriations process, we would not have the allocations to the committees that are enforced by 60-vote points of order to prevent spending from going out of control. We would not have those same 60- vote points of order to protect against additional tax reductions that would threaten the fiscal condition of the country. And we would not have the provisions that allow us to protect Social Security. All of those provisions expire at the end of September. Mr. President, that is what Senator Feingold is before us offering now--an extension of those provisions, an extension that has been worked out with very detailed, bipartisan discussions over an extended period of time. Senator Feingold has played a very constructive role in that regard. He did not end there with the amendment that he is offering. He also has offered budget caps for this year and next year. My judgment is that we ought to adopt spending caps for this year and next year, and they ought to be at levels that are realistic so they can really be enforced. What we have learned in the past is if you set unrealistic spending caps, they are then broken with impunity and we wind up spending much more money, digging the deficit hole deeper. Let me just emphasize that the spending number that Senator Feingold has set out in this amendment is exactly the same number that the President of the United States sent us for the budget for this year. The number he has included for next year as a spending cap takes that amount and increases it by something over 3 percent. That is the number that was in the report of the Senate Budget Committee to our colleagues in the full Chamber. Those are responsible numbers. They allow and accommodate the very large increases in spending asked for by the President for defense and homeland security. All the rest of the spending would actually be reduced from the so-called baseline. Now, that is a responsible budget outline. It accommodates fully the President's request for increases for defense and homeland security, if that is the wish of the Senate and the wish of the House. But it provides a budget discipline that is going to be badly needed here if we are to recover because the harsh reality that we confront is that last year when we were told there were going to be nearly $6 trillion of surpluses over the next 10 years, all of that money is gone; there are no surpluses. In fact, our reestimates indicate that instead of surpluses, we face some $600 billion of budget deficits over the next decade. Mr. President, it is more serious than that. It is really far more serious than that because those numbers lump together the trust funds and the other funds of the Federal Government. If one takes out the trust funds, if one takes out, for example, the Social Security trust fund, what one sees is an ocean of red ink over the next decade-- hundreds of billions of dollars of nontrust fund deficits this year and next year and all of the years to the end of the decade. Instead of a $160 billion budget deficit this year, if one segregates the Social Security trust fund, if one protects the Social Security trust fund, it will be $320 billion. Next year, the budget deficit, instead of being $200 billion, will be $370 billion. That is the depths and the dimensions of the fiscal deterioration that has occurred in just 1 year. These are not just numbers on a page. These are numbers that reflect a larger reality with enormous economic implications for this country. I hope our colleagues are listening. I hope our colleagues are thinking very carefully about the path we have embarked on, where this is all headed, because I want to warn our colleagues that none of this adds up. It does not come close to adding up. It is critically important that we adopt an extension of the budget disciplines that will help keep this from further exploding out of control. It is absolutely critical that we agree to a budget for this year and, as Senator Feingold has offered, a budget for next year as well, with enforceable caps, with provisions that will allow this Chamber to discipline spending and revenue and, yes, protect Social Security. Absent these disciplines, absent a budget, I believe we are headed for a very difficult ending to this session.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Mr. President, I rise to thank my colleague from Wisconsin for his initiative. I was not involved in the development of this amendment. The Senator from Wisconsin negotiated this amendment with one of our colleagues on the other side of the aisle. They produced this amendment. They believed this was a way to advance a return to fiscal discipline. They believed putting caps on spending for this year and next and restoring the budget discipline was a critical first step. This is not the budget resolution I passed through the committee. It has similar elements, but it has additional budget discipline, an entire additional year of spending caps. I believe this is critically important to our fiscal future. I think the amendment that was negotiated by Senator Feingold and one of our colleagues on the other side of the aisle represents the best chance we have this year of moving this country back towards fiscal balance. This will not solve the problem. It will prevent the problem from getting worse, and it will move us in the direction of restoring fiscal discipline. It is a critical first step. My own judgment is, next year, when hopefully the economy is on stronger ground, we will put in place a multiyear plan to balance the budget without using Social Security funds. That is going to take a multiyear effort. The hole has been dug so deep as a result of the tax cut, which is the biggest culprit, combined with the economic slowdown, combined with the attack on the country, combined with underestimations of the cost of Medicare and Medicaid. All of those elements have cooked this stew. Unless we respond, our country is going to get in deeper trouble. Last week, we had to pass a massive increase in the indebtedness of the United States. The President is asking for the second biggest increase in the indebtedness of our country in the history of the United States. That is how serious the situation is. I hope our colleagues will join with an effort to get us back on track.

Mr. CONRAD. There are a number of reasons that are possible for somebody to be in opposition to a continuation of the budget disciplines. One would be they want to spend more money. Another possibility is they want more tax cuts that are not paid for. Both of those are possibilities. A third possibility, with respect to the budget disciplines, is that they have another idea for budget discipline. I suppose that is a possibility. With respect to the actual number, they might disagree. They might say they want less spending or they want more spending, but I say to my colleagues, whatever their disposition is with respect to that, let's vote. Let's decide. Let's move this process forward, but let's do it in a way that is timely. Let's get a budget in place before the appropriations process starts. Let's do that. We have an opportunity to do that now. Let's get those budget disciplines extended before we start the appropriations process; otherwise, we are courting chaos.

Mr. CONRAD

Mr. CONRAD. Mr. President, I yield 4 minutes to the Senator from Minnesota.

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

Mr. CONRAD. I suggest the absence of a quorum.

Mr. CONRAD. Mr. President, I raise a point of order that the pending amendment violates section 311(a)(2)(B) of the Congressional Budget Act of 1974.

Mr. CONRAD. Mr. President, I close debate on our side by pointing out that we are not making these decisions in a vacuum. We have to consider the fiscal condition of the country when we make any spending decision or any additional tax cuts. The fact is, last year we were told we had trillions of dollars of surplus over the next 10 years. Now we see those surpluses are gone. They have evaporated. Instead, we are going to be running massive deficits--this year, a $320 billion deficit. The Senator from Oklahoma said it would be unconscionable to keep this tax. I think it would be unconscionable to drive this country into deeper deficit and deeper debt. That is precisely what the amendment of our colleagues on the other side does. It is very clear the cost of estate tax repeal explodes in the second decade. Not only does it cost $100 billion in this decade, every penny of which is coming out of the Social Security trust fund, but in the second 10 years, it costs $740 billion right at the time the baby boomers start to retire, right at the time there will be unprecedented demands on Social Security and Medicare and, God forbid, on the needs of the defense of this Nation. This is the most irresponsible amendment offered on the floor of the Senate this year. It would gut the fiscal condition of this country when we know it is already teetering. Instead of repeal, we ought to reform this tax. Yes, the estate tax bites at too low a level. So I recommend in my amendment we give an exemption of $3 million for an individual, $6 million for a couple, beginning next year. For 2009 and thereafter, the exemption increases to $3.5 million for an individual, $7 million for a couple. This saves hundreds of billions in the second decade and saves huge amounts of money in this decade, as well. By 2009, only .3 of 1 percent of estates face any estate tax liability under my amendment. In this decade, there is a big difference between these two approaches, the cost of the Republican proposal is $99.4 billion; the cost of my proposal is $12.6 billion. Under my proposal only .3 percent of estates in this country are subject to tax. Not only is it a question of affordability, it is also a question of fairness. Again, my colleague from Oklahoma says it is unconscionable to ask the wealthiest among us to contribute to the fiscal health of the Nation. I don't think it is unreasonable. President Theodore Roosevelt, one of the greatest Republican Presidents, did not think it was unreasonable. President Abraham Lincoln, one of the greatest Republican Presidents did not think it was unreasonable. I think it is unreasonable to say to the American people that we ought to give Mr. Skilling, who ran Enron, a $55 million tax cut and finance it by asking 33,000 Americans, earning $30,000 a year, to put all of their Social Security taxes into the pot so we can give Mr. Skilling a $55 million tax cut. I do not think that is fair. Not only do I not think it is fair, the American people do not think it is fair. In a poll released today by the Fair Estate Tax Coalition, they showed that 58 percent of the American people favor reform over repeal. Mr. President, 37 percent favor repeal, 58 percent favor reform. It is very interesting; in this poll what they found, under Federal budget priorities, is the people of this country overwhelmingly say strengthening Medicare and Social Security is No. 1, 38 percent; increasing spending for education, 33 percent; giving seniors a prescription drug benefit, 29 percent; increasing funding for children's health, 18 percent; retiring the national debt, 16 percent; cutting taxes, 16 percent. What tax cuts do they favor? And that is only 16 percent of the American people who say that is their priority; eliminating the estate tax is the bottom of the barrel. They prefer cutting taxes for moderate- to low-income Americans, eliminating the marriage penalty, a capital gains tax cut; dead last is eliminating the estate tax. This is a fundamental question. Presidents Abraham Lincoln, Theodore Roosevelt, Woodrow Wilson, and Franklin Roosevelt supported inheritance taxes because without them this country would move further from democracy and closer to aristocracy. This is a fundamental misunderstanding of the heritage of America. Meritocracy, not aristocracy; reform yes, repeal no.

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, and I ask for the yeas and nays.

Mr. CONRAD. Mr. President, we should reform, not repeal, the estate tax because repeal is unaffordable, it is unfair, and it is unpopular. First, on the question of affordability: The cost of eliminating the estate tax absolutely explodes in the second decade. It costs $100 billion in this 10-year period. It costs $740 billion in the second decade, right at the time the baby boomers retire, and when we know we already are in deep deficit and adding to the debt. Just yesterday we added to the national debt by $450 billion. Our friends on the other side of the aisle would dig that hole much deeper. My proposal is far more affordable. Instead of $99.4 billion in the next 10 years, $12.6 billion. The elimination of the tax is unfair. One example: Mr. Skilling, the former head of Enron, would get a $55 million tax cut, paid for by the Social Security taxes of 30,000 Americans earning $30,000 a year. That is not fair. On the question of popularity, overwhelmingly, the American people say: Reform, not repeal. By 58 percent to 37 percent, they favor reform over repeal. That is what my amendment does. It takes the exemption to $3 million for an individual and $6 million for a couple next year. In 2009, it goes to $3.5 million for an individual and $7 million for a couple. They would pay nothing. That is fair. It is affordable. And it is what the American people want. I urge my colleagues to support the Conrad amendment. I thank the Chair and yield the floor.

Mr. CONRAD. I yield 3 minutes to the Senator from New Jersey.

Mr. CONRAD. Mr. President, I yield 2 minutes to the Senator from Delaware.

Mr. CONRAD

Mr. CONRAD. I am.

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

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