Kent Conrad

Mr. CONRAD

Mr. CONRAD. I still control the floor. I would be glad to yield.

Mr. CONRAD. Madam President, let me respond to the Senator from Wisconsin. The alternative is not their proposal versus no rules. That is not the alternative. I will offer an amendment that will extend the supermajority enforcement of budget points of order that extends the Budget Enforcement Act provisions--all of them--and that restores the Senate pay-go rules--in fact, toughens them. That is the alternative: serious budget discipline versus the proposal before us by Senators who are absolutely well intentioned. They have the diagnosis right, which is that we have deficit and debt problems, but their solution takes us back to a provision that did not work in the past and will not work in the future. Have we forgotten 1990? When you base budget discipline and enforcement on projections, you are basing your discipline on quicksand. What could be more evident? In 1990, the Office of Management and Budget told us we were meeting our deficit projections, that the deficit was only going to be $100 billion. It turned out to be $221 billion because the whole budget discipline process was based on projections. That is what this budget proposal does. It won't work. It didn't work then; it won't work now. It is absolutely misleading and will take us down a road not to budget deficits, through budget deficit elimination, not to reduce debt, but to more gimmicks, more game playing, more rosy scenarios. After this amendment I will offer an amendment that has real budget discipline. I retain the remainder of my time.

Mr. CONRAD. The Senator has used his time, and I am going to use mine.

Mr. CONRAD. I yield 5 minutes to the Senator from New Mexico, and then I would be happy to engage the Senator from New Hampshire.

Mr. CONRAD. Madam President, momentarily I am going to yield time to my colleague on the Senate Budget Committee, Senator Domenici. Before I do that, I want to respond quickly to something the Senator from Arizona said. I am in agreement with virtually everything the Senator from Arizona said. I am going to be offering the budget disciplines that are expiring at the end of September after this amendment. I think it is absolutely critical, as the Senator from Arizona indicated, that we continue those budget disciplines. It would be a profound mistake in this country to let those lapse. But I say to my colleagues, the amendment being offered by the Senator from New Hampshire, the Senator from Wisconsin, and others, I believe, has enormous loopholes in it, such that would actually make our circumstance worse rather than make them better. Madam President, I hope my colleagues are listening. Under the current pay-go law, if mandatory spending or tax cuts would increase the deficit, it triggers a sequester at the end of the year. Under this amendment, it would allow projected surpluses--hear me; projected surpluses--to be used to pay for additional spending and more tax cuts, without triggering a sequester. Are colleagues listening? They are talking about fiscal discipline, and they are backing an amendment that would impose fiscal discipline based on projections? We tried that before. It did not work because what we got were gimmicks and rosy projections. My colleagues are well intended. I am absolutely on their side with respect to the fundamental question of fiscal discipline. But this amendment, I believe, opens a major loophole because it is based on projections rather than real results. How much time does the Senator from New Mexico want?

Mr. CONRAD. I will be constrained to object because I am told Senator Byrd would object if he were here. But I am very hopeful we can accomplish that same purpose momentarily.

Mr. CONRAD. I will be happy to yield.

Mr. CONRAD. Will the Senator yield?

Mr. CONRAD. Let me say to the Senator, for example, even if we were not able to agree on a discretionary spending amount for this year, if we have these budget disciplines in place, they would apply to the mandatory numbers from last year's budget. As the Senator knows, we have two pots of money. We have mandatory spending, and we have discretionary spending. In the best of all worlds, what many of us would like to achieve is a discretionary limit agreed to for this year--in effect, a budget for this year. But we also have mandatory spending, and, in fact, mandatory spending is a bigger part of Federal spending than is discretionary. Even if we are not able to agree on a discretionary limit, if we have this budget discipline framework in place, we would have a way of disciplining mandatory spending. In the best of all worlds, we get a discretionary spending limit, and we have these budget disciplines that apply on both sides of the equation, mandatory spending and discretionary spending. But at the very least, if we passed these budget disciplines, if we extend them, we have some way of disciplining mandatory spending. That is the biggest part of Federal spending. It would also be very useful and important and certainly my goal to have a discretionary spending limit as well.

Mr. CONRAD. The Senator asks a very good question. There are really two pieces to this puzzle. We need a number for this year. We also need the budget disciplines reinstated because they expire on September 30. This may be one of our best opportunities, I say to the Senator, to reinstate those budget disciplines. We may also have an opportunity to have the number agreed to today. That would be a full package. That would be a very desirable outcome, I say to the Senator. But at the very least, I think we want to get the budget disciplines put in place. Let's say we do not agree. Let's say we are not able to reach agreement on a number for this year. Does that mean we have lost all opportunity? No. Because, I say to the Senator, then certain of the numbers that were in last year's budget resolution serve as a basis for the disciplines that we would now be extending. In other words, even if we did not reach agreement, at least we would have the structure of budget disciplines that could agree to certain spending levels that come from the budget resolution of last year.

Mr. CONRAD. Yes.

Mr. CONRAD. The Senator is absolutely correct. We are awaiting additional discussions that are going on right now, that the Senator may be aware of, to see if we could reach agreement on that critical component. Obviously, that would be a very important part of this package. I say to the Senator, there are really two parts to this. One is the budget number for this year. The other is the budget enforcement mechanisms. Both of them are necessary. Neither is sufficient. They are both necessary. Even though we do not have yet an agreed-upon number, the reason I am offering this amendment is that at least we would then have the framework and discipline when a number is agreed to.

Mr. CONRAD. The Senator makes an assertion about the Senate Budget Committee that is flatly untrue. The budget I offered that passed the Senate Budget Committee fully funded defense for 2003 and 2004. After that, it increased defense by the rate of inflation and set all of the additional defense spending aside that the President has requested in a defense reserve account. Every penny of that money that is not needed for defense goes to debt reduction. The Senator has said it goes to porkbarrel projects. That is absolutely false. Every penny of that money--every penny--either goes for defense or it goes for debt reduction. When the Senator makes statements, I hope the Senator will at least be constrained by the facts.

Mr. CONRAD. I would like nothing better than to have the opportunity to have a full plan. At this moment, what is at stake is having any plan just for this year. That is clearly in the Nation's interests. It is in the interest of an orderly appropriations process to have a budget for this year and to have the various budget disciplines put in place for this year. That is now what is at risk, much less having a longer term plan. What is at risk at this moment is having any plan. That is what is at risk. There are some Members who do not want any plan, some Members who want chaos. They think somehow they benefit by not having a discipline in this entire process. That is regrettable, I say to my colleague, who is a very valuable member of the Senate Budget Committee. We voted out a resolution, a blueprint on how to proceed, one that was fiscally responsible, that had substantially more debt paydown than the President proposed, one that has no tax increases, one that has no delay of the scheduled tax cuts, one that provides everything the President requested for the defense of this Nation, both in terms of the defense budget and the budget for homeland security. We did that. We are asking for at least the opportunity to vote on one year of that plan so we meet the defense needs, so we meet the needs for homeland security, so we get this supplemental budget in place that the President has requested, so that, yes, we have the budget disciplines continue past September 30 when they expire. We do not want to see a circumstance where spending spins out of control. Just be here in October with no budget disciplines available and see what real chaos can be. I say to my colleagues, I know there are people who have strong feelings on all of these issues. I do, as well. We ought to let the Senate work its will. We ought to have a chance to vote. That is how we determine outcomes here. I have been told there are some who have the idea of preventing the Senate from voting. They do not want a chance to vote because they think they would lose, although there is a 60-vote requirement. They are right. They would lose. We would then have the opportunity to have not only a budget for this year and also the budget disciplines continue, that is very much in the public interest. I hope some of my colleagues overnight will think about the consequences of the failure to act. I thank the Senator from Michigan for her contributions on the Budget Committee.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Mr. President, I want to reflect for a moment on the events of today and say to my colleagues, we have to find a way to break the gridlock. The bill that is before us is for defense, for homeland security, for dealing with the tragedy of the attack on New York, and to deal with some other urgent needs, including the shortfall in Pell grants and VA medical care. The bill before us is a $31 billion bill. Fourteen billion dollars is for defense, money requested by the President to respond to the continuing terrorist threat to this country; $8.3 billion is for homeland security, again funds requested by the President to respond to the continuing threat against our Nation; $5.5 billion is to respond to the needs of New York after the attack of September 11; $1.9 billion is for foreign security assistance to strengthen our embassies against terrorist attacks; $1 billion to deal with the shortfall in Pell grants; $400 million for VA medical care. That is the bill that is before us. Those are requests of the President of the United States. I want to make clear that what is at stake is spending items requested by the President of the United States to respond to the threats against our country and the devastation that occurred as a result of those attacks. I think it also must be said that we need to have a budget put in place for this year. It is needed. Now we are being told by some on the other side, they will block any attempt to have a vote on a budget framework for this year. There are others on both sides who want to work together to achieve that result. There are others on both sides who believe it is important to have a budget put in place for this year, to have the budget disciplines extended for this year. I hoped we could do that before we conclude work on this supplemental. This is one of the best alternatives, one of the best options we will have to put in place a budget framework for this year. I might say that people on both sides of the aisle have worked very hard to do that, are very close to an agreement to do that, but we have to have an opportunity to vote before cloture is invoked or that effort will fall. That is the hard reality. We have an opportunity to put in place a budget for this year, to extend the budget disciplines for this year, and to provide some order to this process. That is in the interest of all of us. That is in the interest of the Nation. I would hope very much that tomorrow we would have the opportunity to vote on that on a bipartisan basis.

Mr. CONRAD. Since the Senator has presented the budget I offered, I would like to complete the description of that and then I would be happy to yield. I do not think it is wise to reduce the highway and bridge construction budget of the United States by 27 percent. No. 1, it would cost over 350,000 jobs in America. No. 2, it would reduce the efficiency of the transportation system in our country. What sense would that make? It does not end there. The other major difference in the priorities of my budget from the President's budget is in education. Everybody says education is their priority, but the President's budget actually cut his signature education proposal, No Child Left Behind. The President, with great fanfare, went across the country drawing attention to the No Child Left Behind Act, but in the first budget he proposed, he cut the funding for No Child Left Behind. I also, in my budget, kept the Federal promise that was made long ago to the States with Disabilities Act funding for education. Educators all across America told us this was the single highest priority. It is the one thing that would help school districts across America the most, if the Federal Government would keep its commitment to fund 40 percent of the costs of the Disabilities Act. That is a promise we have not kept. Under the budget I have proposed, we would keep it. We have some additional funding for education, some additional funding for law enforcement as well. The President cut dramatically the funding for the COPS Program. What sense does that make, when we face a terrorist threat, to cut cops on the street? This is a program that has put tens of thousands of policemen on the streets of America. So we restored that cut. We also dealt with some of the other priorities of the Nation. In addition to education, in addition to law enforcement, we dealt with the health care needs of America. The President had about $250 billion set aside for a prescription drug benefit and to expand health care coverage. The House in their budget resolution set aside $350 billion for a prescription drug benefit and for adjustments to providers. They did not pick up the President's proposal for expanding health care coverage. In the budget I have proposed, we have a $500 billion reserve fund for health care, for prescription drugs, for the President's proposal on expanding health care, and for the third category of adjusting for providers, the Medicare cuts that are in place that endanger the health care of the people of the country because there are additional cuts to hospitals, additional cuts to doctors that go beyond what was anticipated when the 1997 Deficit Reduction Act was put in place. Some have asked, how can it be that there are fewer cuts than the President proposed but on the other hand there is more debt reduction? How can that be? The way we achieved that result was not to adopt the President's proposal of additional tax reductions on top of the stimulus package that has already been put in place this year, and on top of the massive tax cut that was put in place last year that extends over the next 10 years. We say, yes, there can be additional tax cuts, absolutely, but they have to be paid for. I think that is a pretty reasonable budget. Those are principles that ought to be adopted. Those are things that make sense. I want to review how we got in the circumstance we are in today. It was not the fact that we have not yet adopted a budget for 2003 that put us into deficit. I conclude by saying we got in this soup because of the fiscal policy put in place last year by the Senator from Pennsylvania and his colleagues. They are the ones who told the American people: You can have it all; it all adds up, massive tax cut, major increases in spending. They will have maximum paydown of the Federal debt, they will do all these things based on a 10-year forecast that even the people who made the forecast warned was uncertain. But they bought it hook, line, and sinker, and they sold it to the American people. What is the result? Before we have a budget for fiscal year 2003, massive deficit is the result, deficit not just for this year but next year and the next year and the next year and the next year, because that party that claims to be the party of fiscal responsibility put us right back into the soup of deficits, debt, and decline. Their plan did not add up. Now we have an opportunity and an obligation to try to agree on a budget for this year.

Mr. CONRAD. Mr. President, the Senator from Pennsylvania must have missed what has been going on. He has not been party to any of these discussions, any of these talks, but people on his side of the aisle have been, including the ranking member of the Budget Committee and the Republican leader. We have even involved the White House in an attempt to get a budget for this year. The fact is, the Senate passed a budget resolution through the Budget Committee, a budget that is a 10-year budget as required under the law. The President presented a 10-year budget, and we will give our colleagues a chance to vote on that budget as well, just as we did in the Budget Committee. Interestingly enough, some Republicans did not support that budget. We will see if they want to support that budget on the floor. The Senator from Pennsylvania talks about raiding Social Security. The President's budget really raids Social Security. We will give the Senator from Pennsylvania the opportunity to vote on that budget and see if he wants to raid it by $500 billion more. That is what the President's budget does. How are we in this deficit situation? Is it because we have not considered a budget resolution on the floor of the Senate? The Senator from Pennsylvania knows the answer to that question. We are in deficit for as far as the eye can see before a budget has been considered for fiscal year 2003, and I remind the Senator that the new fiscal year does not start until October 1. We have time to get a budget in place for this year. The Senator perhaps has forgotten that the Senate has been involved in the election reform bill, the energy bill, the trade bill--all of these the administration requested us to take up. Now we are on the supplemental bill which the President also asked us to take up and dispose of. So the budget kept getting pushed back. On the fundamental question of how we got in this circumstance where we see deficits as far as the eye can see, the facts are very clear. The Senator from Pennsylvania and his colleagues bear substantial responsibility. They are the ones who put a budget in place last year that plunged us back into deficits. We opposed it. It was the Senator from Pennsylvania and his colleagues who said we can have it all, who said we can have a massive tax cut, we can have a major defense buildup, that we can have maximum paydown of the Federal debt. That is what they told us last year. And now they are here, after saying they were going to have maximum paydown of the Federal debt, asking for the second biggest increase in the debt in the history of the country. This is their fiscal policy that is in place. It is their fiscal policy that has put us back into deficit. It is their fiscal policy that has put this country back into accumulating debt at a record rate. No budget has yet been acted upon for the year 2003. It is their budget, the budget they passed last year, that they offered in both Chambers of the Congress, that they passed that has put us in this deep ditch. That is the fact. Last year, we were told there would be nearly $6 trillion of surpluses over the next decade. In fact, the President's Office of Management and Budget told us there was going to be $5.6 trillion of surpluses over the next 10 years. Now we are told maybe $400 billion, and that is before the revenue shortfall of this filing season. The fact is the money is all gone. Where did it go? More than 40 percent went to the tax cut that the Senator from Pennsylvania and his colleagues pushed through this Congress. Twenty percent of the disappearance of the surplus went from increased expenditures as a result of the attacks on this country, 20 percent, and every Republican supported those expenditures. Twenty percent of the disappearance of the surplus happened because of the economic slowdown. About 20 percent occurred as a result of underestimations of the cost of Medicare and Medicaid. That is where the money went. So if the Senator from Pennsylvania is wondering how the money disappeared and who is responsible, he can look in the mirror because it was his fiscal policy, his budget, his plan, his promises that put us back into deficit and back into debt. That is where we are. I warned against that fiscal policy. I warned that it would put us in danger of raiding Social Security and raiding Medicare and every other trust fund in sight. But, oh, no, the Senator from Pennsylvania and his colleagues said: We know better. There is going to be even more money than has been projected. That is what they said then, and now we reap the whirlwind and the devastation of deficits and debt as far as the eye can see. We have an opportunity to get a budget framework in place. We have an opportunity to put in place the budget disciplines that are necessary to prevent spending from spinning out of control, but this kind of ad hominem attack is not going to solve those problems. We presented a 10-year budget. I am proud of that budget. The budget I presented, that passed through the Budget Committee, did the following: No. 1, fully funded the President's defense request for 2003 and 2004, and for the years beyond put the money in a reserve account so that every penny would be available for the defense of this country if needed. But in those future years, where none of us can say with certainty what might be required for defense, to the extent any of that money is not needed for that purpose, it goes to reducing the debt of America. That is a good policy. It is one we ought to adopt. In the budget I have offered our colleagues, we fully fund all of the money the President has requested for homeland security because we believe everybody in this Chamber understands our first obligation is to defend this Nation. The budget I have offered also has greater debt reduction than the President has offered in his budget, $500 billion more in debt reduction than what the President proposed, if the defense reserve fund is not needed for defense. If it is all required for defense, we still are paying down the debt by $230 billion more than the President's proposal. On the other key issues before us, the budget I offered my colleagues said there would be no additional tax cuts unless they are paid for because we are now in deficit. It contains no tax increases, and it also has no delay of the scheduled tax cuts. The budget I offered also attempts to address the priorities of the American people because it rejects certain of the cuts the President proposed. The President proposed cutting the highway construction program in this country by 27 percent. The President's budget proposes a $9 billion cut in highway and bridge construction funding. I do not think that is the priority of the American people.

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

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. I have no objection.

Mr. CONRAD. Madam President, this amendment is to provide the fiscal discipline that I think we all seek, at least the framework for it. This amendment extends the supermajority enforcement of budget points of order. It extends the Senate's 60-vote Budget Act points of order for 5 years. These points of order, including points of order that protect Social Security----

Mr. CONRAD. Madam President, I raise a point of order that the pending amendment violates section 306 of the Congressional Budget Act of 1974.

Mr. CONRAD. Madam President, does the Senator from New Hampshire still have time?

Mr. CONRAD. Madam President, in conclusion, I agree absolutely with what motivates the sponsors of this amendment. We need budget disciplines. I will offer those as a package, all of the budget disciplines--every one; in fact, a strengthened pay-go provision--after we dispose of the amendment that is before us. Madam President, I say to my colleagues, I believe the amendment before us has a giant loophole, unintended I am sure, but it is based on projections, not real results. We have seen what happens with that kind of budget approach. I go back again to 1990 when we had a similar scheme in place based on projections from the Office of Management and Budget.