Kent Conrad

Mr. CONRAD

Mr. CONRAD. I would just like a few more minutes.

Mr. CONRAD. Mr. President, the Senator from Texas began by saying I was a good advocate but I was playing a weak hand. I say to him, he is an outstanding advocate. I do not agree with him. I think his prescription for America really is not the priorities of the American people. Most of all, I always enjoy listening to him, but I must say, the words he speaks bears almost no relationship to the facts and certainly no relationship to the budget I have offered. What I find most enjoyable is that the Senator from Texas has been giving this same speech for 20 years, and it does not matter if the facts have changed completely, he sticks with his speech. So I applaud him for his consistency. When he says this is a question of more and bigger Government or smaller Government, that is not what this is about. No, no, no. That is the old debate. That is the old, tired debate, but that is not what this budget resolution is about. The budget resolution I have offered today would shrink the role of Government and would dedicate more of the money to debt reduction. The truth is, the fundamental difference between our budget proposals is we have dedicated about 70 percent of this projected surplus to short-term and long-term debt reduction. The President's plan devotes about 35 percent to short-term and long-term debt reduction. That is the big difference. They have a much bigger tax cut. We have much more money for short-term and long-term debt reduction. That is the real difference. When the Senator from Texas says there has just been this explosion of Federal spending, come on. We know better than that. That is not what has been happening. There has not been any big explosion of Federal spending. Let us deal with the facts. This is what has happened to Federal spending from 1962 to 2002. This is what has happened to Federal spending as a share of our gross domestic product, which is the best way to compare so we are not just looking at inflated dollars. We see that the Federal spending is now at the lowest level since 1966. We are down to 18 percent of gross domestic product being consumed by the Federal Government. Of course, where does most of the money go? Most of the money goes for Social Security, direct payments to the American people; Medicare, direct payment of the health bills of the American people; interest on the debt, the debt of the American people. Another big expenditure this year is paying down the debt, the debt of the American people. The President has said very often, this is the people's money; we ought to give it back to the people. First of all, I agree with the first part of his formulation. This money is the people's money. Absolutely. We should give some of it back to the American people. Absolutely. But this debt is the debt of the American people. Social Security goes to the American people. Medicare goes to the American people. National defense is for the American people. A prescription drug benefit goes to the American people. Improving education is the education of the American people. All of these are the people's needs and the people's priorities. This is not a case where the money goes to the Government, the Government sticks it in a sock somewhere. This is a question of how we best use our resources to provide a significant tax cut to protect Social Security and Medicare, to improve education and defense, and the rest. When the Senator from Texas says we have been on a spending binge, it is just not true. As I indicated, we have been seeing the Federal Government spending share come down each and every year since 1992. We were at 22 percent of gross domestic product in 1992; we will be at 18 percent of gross domestic product this year. The Federal share of the national income has been going down steadily. Under the Democrat alternative that we have offered and are proposing to our colleagues, we continue to bring down the share of the Federal income going to the Federal Government. We continue to shrink the size of the Federal Government from 18 percent of gross domestic product to 16.4 percent at the end of this period, the smallest part of national income going to the Federal Government since 1951. This dog won't hunt. This tired old debate that it is tax cuts versus spending and those are the only options--those are not the only options. Those are false choices for the American people. The truth is, the choices are more complicated than that. It is not just a question of spending or tax cuts; it is a question of spending or tax cuts or debt reduction, short term and long term. On our side, we have said the highest priority is additional debt reduction. Why? Because we know where we are headed when the baby boomers start to retire and this long-term debt takes off like a scalded cat. It is interesting; the Republicans claim that this is just a question of our spending versus their spending. Under their plan, they may well be spending more money next year than our plan provides. Our plan provides a 5-percent increase in overall spending next year. The Republican plan may be as little as 4.9 percent, slightly less than ours, but if they use their contingency fund they have set aside, they could have as much as a 10-percent increase in Federal spending. Our Republican friends are trying to have it both ways. They are claiming they are against spending. Yet they have created a contingency. By the way, you have to wonder where else it will be used because the President has said very clearly, his tax cut is $1.6 trillion and no bigger. He has said he will pay down $2 trillion of national debt and no more. Yet they have established a contingency fund. If it is not going to go for a tax cut, if it is not going to go for paying down more debt, the only place it can go is more spending, in which case our friends on the other side of the aisle have more spending than we do. What a surprise. This is the same old shell game they have engaged in for years, to try to suggest this is a question of tax cuts versus spending. That is not the choice. We are saying, devote most of these resources, 70 percent of this projected surplus, to paying down short-term and long-term debt. We are dedicating nearly twice as much to that--$1.8 trillion more--to paying down short-term and long-term debt. They are dedicating more to a tax cut. That is the fundamental choice. It is not a choice of spending versus tax cut; it is a choice of tax cut versus paying down the debt. That is the fundamental choice before the American people in the budget resolution we offer versus the budget resolution they offer. There are other choices as well. We have provided $750 billion to start to address our long-term debt that will be created by the retirement of the baby boom generation. We have put aside $750 billion to strengthen Social Security. They have a big goose egg for that purpose; they have nothing. We talk about who is being fiscally responsible. I will vote for our side. I am happy to take our budget and defend it anywhere because we have devoted twice as much money to short-term and long-term debt reduction as the other side. Now my colleague from Texas says: The Democrats didn't support the Social Security/Medicare lockbox we proposed last year or in 1999. No, we didn't support their lockbox. Certainly, we did not. It was a leaky lockbox. It didn't lock up anything. In fact, the Treasury Secretary said it endangered our ability to pay the debt of the United States. That was the lockbox they offered. The lockbox we voted for, to protect Social Security and Medicare, was a lockbox I offered on the floor of this Senate last year. It got 60 votes, including, I think, 14 Republicans. When the Senator suggests Democrats didn't support protection for Social Security and Medicare, it is just false. He knows it is false. He knows it is absolutely false. We supported protection for Social Security and Medicare, and it is the proposal that passed here with the highest number of votes in the Senate, 60 votes. The Senator from Texas says: They didn't vote for my constitutional amendment to balance the budget. He is exactly right; we didn't vote for his constitutional amendment to balance the budget because it defined ``balancing the budget'' as one that looted the Social Security trust fund to achieve balance. He is darn right we didn't vote for that. We have been able to balance the budget subsequent to that without raiding the Social Security trust fund. Who is right and who is wrong about that dispute? He came out here with a constitutional amendment and said we had to pass it; it was the only way to balance the budget, and he defined ``balancing the budget'' as raiding the Social Security trust fund to achieve balance. What a fraud. What an absolute fraud that would be for balancing the budget. No, we didn't vote for it. We voted against it because we wanted to balance the budget without counting Social Security. That was the right thing to do. The Senator from Texas said we increased spending last year by $561 billion. No, we didn't. There was no $560 billion increase in spending last year. Let's go back to the record. Here is what has happened with spending. As a share of the economy, Federal spending has gone down each and every year, including last year. Under the plan we are proposing, it will continue to go down as a share of our national income, as a percentage of our gross domestic production. That is the way economists say is the best way to measure changes in spending over time because that is adjusting for inflation. The Senator from Texas says this is a question of more Government or more opportunity. Those are not the choices before us. That is a good speech line, but it has almost no relevance to the choices before us in this budget resolution. The fact is before us are a series of choices, not just one or the other; it is a series of choices. The first choice is do we reduce the size of the President's proposed tax cut in order to have more short-term and long-term debt reduction? We say yes. We say we ought to reduce the size of his tax cut so we have more short-term and long-term debt reduction. We also say we ought to reduce the size of his tax cut to set aside money to strengthen Social Security for the long term. We also believe we ought to reduce the size of his tax cut to improve education and to provide a prescription drug benefit and to strengthen national defense because those are also priorities of the American people. But we only endorse those spending initiatives in the context of maximum paydown of our publicly held debt, of putting aside money to deal with our long-term liabilities, and also within the context of continuing to shrink the role of the Federal Government. Let's go back to that chart that shows, under the plan we are proposing, we would continue to shrink the role of the Federal Government from 18 percent of gross domestic product today, down to 16.4 percent at the end of this period, the lowest level since 1951. That is the lowest level in 50 years. The Senator from Texas also said we are paying down all the debt we can pay down. No we are not. That is not true. We had very clear testimony before the committee on how much debt can be paid down. I thought the most compelling testimony was by the man who has managed the successful debt paydown of the previous administration. The President is saying we can only pay down $2 trillion of the publicly held debt over this period. That is not the case. We have $2.6 trillion of debt coming due during this period. We can certainly pay down all of that. If we reserve all the Social Security and Medicare trust funds, and those moneys are used to pay down publicly held debt, we have no cash buildup problem until the year 2010. That is what a detailed cashflow analysis demonstrates. It is a red herring to suggest we are going to have to pay these big premiums to foreign bondholders. That is all nonsense. We are not going to have to pay any big premiums to anybody. We are just going to retire the debt of the United States as it comes due, not renew it, not issue new debt. They want to issue new debt to pay for their tax cut. We do not. We think we ought to dump this debt while we have the chance because we know what happens when you get past this 10-year period and the debt of the United States takes off like a scalded cat. This is a fundamental choice. The thing the Senator from Texas and I do agree on is that this debate is important. It is going to shape the economic future of our country. I say to those who are listening, the President's plan is fatally flawed. The President's plan is fatally flawed because he uses virtually all of the non-trust-fund money for his tax cut. In fact, here is the projected surplus: $5.6 trillion, as uncertain as it is. If you take out the Social Security trust fund, $2.6 trillion. Then you take out the Medicare trust fund, $500 billion. That leaves you with an available surplus of $2.5 trillion. Then the President proposes a tax cut of $1.7 trillion. His tax cut plan requires additional adjustments in what is called the alternative minimum tax. Today there are 2 million people affected by the alternative minimum tax, but if we pass the President's plan, 30 million are going to get caught up in the alternative minimum tax. It costs $300 billion to fix that problem. The interest costs associated with the first two are $500 billion, the President's spending initiatives over the so-called baseline are $200 billion, for a total cost of his plan of $2.7 trillion--when there is only $2.5 trillion available, if you safeguard the Social Security and Medicare trust funds. The numbers do not add up. The President's plan is $200 billion in the hole and that is before any defense initiative that he might propose, that is before any of the other things that may be suggested by this administration in terms of additional tax cuts, as we have seen come over from the House--$300 billion over and above what the President has proposed; and before additional funds for education or a prescription drug benefit. That is before any adjustment in the forecast because of the economic downturn. We have a President's budget that is eating into the trust funds already and it is headed for much worse. Many of us believe it would be a very serious mistake to make a decision that locks in for the next 10 years a tax cut that is so big that it threatens the Social Security and Medicare trust funds. Let's remember, when we get past this 10-year period we are faced with a totally different situation; The retirement of the baby boom generation, the explosion of demands on Social Security and Medicare. The truth is, the choices in this budget resolution are critically important to the country's economic future. The question is, Do we have more of a tax cut or do we have more debt reduction? Do we reserve resources to improve education, national defense, and provide for a prescription drug benefit or do we go on the cheap on education? Do we go on the cheap on the health care of the American people? I hope very much, as this debate continues, we will have a chance to really inform the American people of what the choices are. I believe the choices we made on our side are the choices they would make in their own families. If they had a windfall I do not believe they would go blow it all on a vacation or fancy car. I think they might take a vacation, but I think they would also pay down that mortgage. I think they would also use those resources to invest for the future. Those are the principles and the values that have formed the budget we are offering on our side. It is a budget that protects every penny of the Social Security and Medicare trust funds, a budget that takes what is left and provides a third for a significant tax cut for all Americans, including addressing the marriage penalty and reforming the estate tax; and with an additional third addressing those high-priority domestic needs of improving education, strengthening national defense, and providing a prescription drug benefit; and with the final third, taking that money to strengthen Social Security for the long term, to address this long-term debt that is building. We think that is a pretty good set of priorities, and we hope our colleagues will endorse it before this week ends. I thank the Chair. I yield the floor.

Mr. CONRAD. Mr. President, the Senator from New Mexico has talked further about reconciliation. Let me make it clear this will be one of the most consequential votes in the Senate in any of our memories. If this precedent is adopted that says you can totally take away the safeguards of the Senate, change the constitutional structure of this body by using that methodology for a $1.6 trillion tax cut, then the door is wide open for every kind of abuse. The Senator from New Mexico says reconciliation can be used by either side. That is true. It is also true it can be abused by either side. I remember very well in 1993 and 1994 when we had massive health care legislation being considered and a group of Senators were approached and asked if we would support the use of reconciliation that short- circuits Senators' rights to debate and amend, to pass that legislation. A group of Senators said, no; that would be an abuse of the process to pass a $138 billion spending initiative based on limited debate and limited amendment. That is not what the Senate was designed for; that is not what the Founding Fathers intended for this body. The Founding Fathers intended for this body to be, as I described before, the cooling saucer, where we could have extended debate and unlimited amendment to determine the outcome to protect the American people, to protect the rights of a minority. We are on the brink of sweeping all of that aside in the name of a tax cut, to take away those protections for a minority, to take away those protections for an individual Senator to represent his or her constituents, to take away those protections for this institution. It is wrong; it is dead wrong. It was wrong in 1993 and 1994 to use it for a spending provision. It would be wrong, dead wrong, to use it now for a tax cut. The whole purpose of reconciliation was for deficit reduction. The Senator from New Mexico quite correctly says in 1993 reconciliation was used by our side--he is exactly right--for deficit reduction. That was a package that cut spending and raised taxes to reduce deficits. This package is the opposite of that. This package is the opposite. When the Senator talks about previous precedents, he cites 1997. Yes, reconciliation was used. But, again, that was part of an overall package of deficit reduction. We have gone over the precedents with respect to budget reconciliation. We find only one case, back in 1976, where reconciliation was used for a tax cut, absent other deficit reduction provisions. That was a $6 billion item. It was vetoed. In 1993, reconciliation was used. It was used for deficit reduction. In 1997, reconciliation was used. It was used for deficit reduction. That is the reason we have those provisions. I cite Senator Domenici himself in a letter I wrote to the Parliamentarian. Senator Domenici said: Frankly, as the chairman of the Budget Committee I am aware of how beneficial reconciliation can be to deficit reduction. But I'm also totally aware of what can happen when we choose to use this kind of process to basically get around the rules of the Senate as to limiting debate. Clearly, unlimited debate is the prerogative of the Senate that is greatly modified under this process. I have grown to understand this institution. While it has a lot of shortcomings, it has some qualities that are rather exceptional. One of those is the fact that it is an extremely free institution, that we are free to offer amendments, that we are free to take as much time as this Senate will let us, to debate and have those issues thoroughly understood both here and across the country. That was Senator Domenici, on October 24, 1985. The Senator was right then. He is wrong now. He said later, on October 13, 1989: There are a few things about the U.S. Senate that people understand to be very, very significant. One is that you have the right, the rather broad right, the most significant right among all parliamentary bodies in the world, to amend freely on the floor. The other is the right to debate and to filibuster. When the Budget Act was drafted, the reconciliation procedure was crafted very carefully. It was intended to be used rather carefully because, in essence, Mr. President, it vitiated those two significant characteristics of this place that many have grown to respect and admire. Some think it is a marvelous institution of democracy. And if you lose those two qualities you just about turn this U.S. Senate into the U.S. House of Representatives or other parliamentary body. The Senator was right then. He is wrong now. It is an absolute abuse of reconciliation to use it for purposes other than deficit reduction. If we allow it here, we are going to open the floodgates. Someday it may be used or abused for spending, as was attempted back in 1993-1994, when a group of us on our side stood up and said: No, don't you dare. Because we will not be any part of damaging this institution or undermining the constitutional role of the Senate. It is as wrong to have used reconciliation for a $138 billion spending initiative as it is to propose it for a $1.6 trillion tax cut. Both of them are dead wrong. Reconciliation was designed, not for spending, not for tax cuts, but for deficit reduction. Senators agreed to restrict their fundamental rights to amend and debate in the interest of deficit reduction. Now we are talking about Senators giving up their fundamental rights to debate and to amend--for what? For the opposite of deficit reduction. That would be a profound mistake. As Senator Domenici himself observed in 1989, that could change for all time this Chamber and its role in the United States and the Congress of the United States. I hope very much we do not go down that road. I hope very much that wiser and cooler and calmer heads will prevail. We can address the President's tax cut under the regular order. We can use the normal procedures of the Senate just as was done in 1981 with the big Reagan tax cut. They didn't use reconciliation; they used the normal procedures of the Senate that permitted debate and amendment and not a short circuiting of the process or an abuse of the process. Mr. President, How much time have I used?

Mr. CONRAD. Will the Chair notify me when I have used another 10 minutes?

Mr. CONRAD

Mr. CONRAD. I thank the Chair and I thank the Senator from New Mexico. I thank all of my colleagues who have worked hard to bring us to this position today. However, we don't believe we ought to be on the budget resolution tonight. We don't believe we ought to be on the budget resolution because we don't have a budget from the President. Not only do we not have a budget from the President, because he has not even provided sufficient detail for the Joint Committee on Taxation or the Congressional Budget Office to give us an independent review of what his tax proposal costs, but we believe we should have waited until that analysis was available. Third, there has been no markup in the Budget Committee. Always before, with one exception, we have had a markup in the Budget Committee. And always we have at least tried in the Budget Committee to mark up a budget resolution for our colleagues on the floor. This year, there was not even an attempt. Fourth, there will be an attempt in the budget resolution to use reconciliation for a $1.6 trillion tax cut, which we believe threatens the constitutional role of the Senate. Now ``reconciliation'' is a word that I am certain many of our listeners really have no idea of its meaning. I must confess I didn't fully understand reconciliation until a detailed review of that process. What it provides is that the typical operation of the Senate was to provide a ``cooling saucer'' in our constitutional construct, so that the House of Representatives reacted immediately and responded to the will of the people at the moment. The Senate was designed to be the cooling saucer, where calmer and cooler reflection could permit a further analysis, unlimited debate, with every Senator having the right to amend. Those are the fundamental constructs of this institution. All of that is short- circuited under reconciliation. All of that is out the window, and the Senate becomes a second House of Representatives. We believe the Bush budget puts this country in the hole because if you start with the projected surplus of $5.6 trillion and subtract out the trust funds of Medicare and Social Security, that leaves you with an available surplus of $2.5 trillion. When we look at the cost of the Bush tax cut as partially reestimated, and the alternative minimum tax that will have to be reformed because of the Bush tax cut, which costs another $300 billion, and the associated interest costs of $500 billion, and the spending proposals in this budget of $200 billion, you have a total cost of the Bush plan at $2.7 trillion. That tells us this President's plan puts us right into the trust fund and puts us in the hole by $200 billion. On our side, we will offer an alternative that does the following: We will protect the Social Security and Medicare trust funds in every year. We will pay down the maximum amount of the publicly held debt. We will provide for an immediate fiscal stimulus of $60 billion. I might add, that is what we think we should be doing this week. We think we should be passing on the floor of the Senate an immediate fiscal stimulus. That is what we think should be done. Fourth, we will provide significant tax relief for all Americans, including rate reduction, marriage penalty relief, and estate tax reform. Finally, we will reserve resources for the high priority domestic needs, including improving education, a prescription drug benefit, strengthening our national defense, and funding agriculture. Finally, we will provide $750 billion to strengthen Social Security and address our long-term debt. So this is a fundamental debate about the economic future of our country. We look forward to it on our side. We look forward to a healthy and vigorous and polite debate. Mr. President, I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, maybe we can have an exchange here so that we really understand the proposals on the two sides. The Senator asked the question, When we reserve $750, $800 billion to strengthen Social Security, where is that money going to go? The situation we face as a Nation is right here. This is from the General Accounting Office. This is the long-term budget outlook for the United States. It shows that while we are enjoying surpluses now, even if we save all the Social Security trust fund money, the deficits for the country are going to mushroom when the baby boomers start to retire. We have a very strange accounting system in the Federal Government. We don't account for our long-term liabilities that are growing. In fact, there is a lot of talk about the publicly held debt, and the Senator said the President is paying down the publicly held debt. What he hasn't talked about is the gross Federal debt. The gross Federal debt, during this period, is actually going to grow from $5.6 trillion today to nearly $7 trillion at the end of this period. What I am saying is, we should do two things: We should make a maximum effort on paying down our publicly held debt, pay down more of it than the President proposes, but we also ought to reserve money to deal with this long-term problem that is confronting us, which we all know is there. There have been a series of proposals as to how to do that. One is to establish individual accounts. Senators on the other side, by and large, support that approach. They support privatization, which I don't support, but they say that would be a way to go. I just say to my colleague, if you are going to do that, you have to get the money from somewhere. If you are going to do other things to strengthen Social Security and address this long-term debt problem, you have to get the money from somewhere. Every proposal to reform Social Security that has been proposed--the Archer-Shaw proposal, former chairman of the Ways and Means Committee in the House; Senator Gramm's proposal; the Aaron-Reischauer proposal, Kolbe-Stenholm proposal, the leaders in the House of Representatives; the Gregg-Breaux proposal, one of the key alternatives in the Senate; and the Clinton-Gore proposal of the last administration--every one of them requires money. Our budget plan sets aside $750 billion for that purpose. Their plan sets aside nothing. That is a fundamental difference. That is not some plan that is out there in the ether. That is a plan that is necessary if we are going to begin to cope with our long-term debt bomb that is facing this country as a result of the baby boom generation. We can either say the problem doesn't exist and not do anything about it, which is what their budget plan proposes, or we can reserve resources now to begin to cope with our long-term imbalances that everyone knows is right beyond this 10-year period. I am saying let's reserve money now to deal with this long-term debt crisis; in addition to aggressively paying down our publicly held debt, doing it more aggressively than they propose, I am also proposing dealing with our long-term debt, something for which they have not reserved a dime. That is the reason for that part of the plan, and we will be happy to discuss this more tomorrow and say we look forward to additional debate in the morning.

Mr. CONRAD

Mr. CONRAD. Madam President, we have not seen an estimate from the Congressional Budget Office nor the Joint Tax Committee of the cost of the President's plan, except for pieces of it, the estate tax provision of the Senator from Arizona, and two pieces of it from the House. But we don't have an estimate of the President's full plan.

Mr. CONRAD. No, I will be very brief. Was the Senator aware that in 1993 there was sufficient detail from the President to have the Joint Tax Committee and the Congressional Budget Office estimate the cost of the President's tax proposals? That is totally different from this year. In this year, we have insufficient detail from the President for the Joint Tax Committee and the Congressional Budget Office to give us an independent estimate of the cost of the President's proposals.

Mr. CONRAD. May I be permitted a brief question?

Mr. CONRAD. Will the Senator further yield just for a brief question?

Mr. CONRAD. Will the Senator from Arizona just yield for a question?

Mr. CONRAD

Mr. CONRAD. I thank the Senator from Oklahoma. I will be very brief.

Mr. CONRAD

Mr. CONRAD. I thank the Chair and the Senator from Oklahoma. Mr. President, I wanted to further engage the Senator from Arizona because the Senator from Arizona asserted that we have received the estimates of the cost of the President's tax package, and that is simply not the case. It is not true. If he has received it, I would like him to give me a copy because we haven't received it. We haven't received it because the Joint Tax Committee has said they don't have sufficient detail about the President's package to do such a reestimate, and so we are being asked to go to a budget resolution without having the President's budget, without having the estimates from an independent source of the cost of the President's budget proposal, and with no markup in the Senate Budget Committee, which is unprecedented, not even an attempt to mark up in the Senate Budget Committee, and all under a reconciliation which denies Senators their fundamental rights to engage in extended debate and amendment. There were remarks made on the floor that are just not true. It is one thing to have a disagreement, and we can disagree. We can even disagree on the facts. The facts are clear and direct. The differences between the present and 1993 are sharp. In 1993, we did not have the full President's budget. We did have sufficient detail for an independent, objective review of the cost of the President's tax proposals. We do not have that now. We do not have the reestimate. We do not have an objective independent review of the cost of this President's tax plan. What has been reestimated is part of the plan. And what has been reestimated is the estate tax plan of the Senator from Arizona, not the President's estate tax plan, because the Joint Tax Committee has made clear they don't have sufficient detail to make such a reestimate. This body is being asked to write a budget resolution without the budget from the President, without sufficient detail from this President to have an objective, independent analysis of the cost of his proposal, without markup in the committee. That is another difference. In 1993, we had a full and complete markup in the Budget Committee. This time there is none. It has never happened before. Some on their side will say, well, in 1983, we went to the floor with a budget resolution without having completed a markup in the committee. That is true. But at least we tried to mark up in the Budget Committee each and every year. Virtually every year we have succeeded, except this year. There wasn't even an attempt to mark up the budget resolution in the committee. As I say, we are now being asked to go to the budget resolution with no budget from the President, without even sufficient detail to have an independent analysis of the cost of his proposal, which is a massive $1.6 trillion tax cut that threatens to put us back into deficit, that threatens to raid the trust funds of Medicare and Social Security, and we have had no markup in the committee. The majority is proposing to use reconciliation, which was designed for deficit reduction, for a tax cut. That is an abuse of reconciliation. It would be an abuse if it was for spending; it is an abuse if it is for a tax cut. That was not the purpose of special procedures in which Senators give up their rights, their rights to debate and amend legislation. That is wrong. That turns this body into the House of Representatives. I say to my colleagues on the other side, in 1993, when our leadership came to some of us and asked to use reconciliation for a spending program, we said no. This Senator said no. That is an abuse of reconciliation because reconciliation is for deficit reduction, not for spending increases, not for tax cuts. We are not to short-circuit the process of the Senate--extended debate, the right to amend--because those are the fundamental rights of every Senator. That is the basis the Founding Fathers gave to this institution. The House of Representatives was to act in a way that responded to the instant demands of the moment. The Senate was to be the cooling saucer where extended debate and discussion could occur, where Senators could offer amendments so that mistakes could be avoided. All of that is being short-circuited. All of that is being thrown aside. All of that is being put in a position in which the fundamental constitutional structure of this body is being altered. Because the Senator from Oklahoma was so gracious, I am going to stop for the moment so he can make his remarks. Then I will resume at a later point in time. I wanted to do this as a thank-you to the Senator from Oklahoma for his good manners and graciousness. I appreciate it.

Mr. CONRAD

Mr. CONRAD. It would. It would require a simple majority in the committee. When we get out here on the floor, as the Senator well knows, we have a different situation.

Mr. CONRAD. That is correct; on a motion to strike. As the Senator knows, we may face a series of different parliamentary circumstances both in the committee and on the floor, and the test, based on the parliamentary circumstance we face, may be different in the committee rather than on the floor. On the motion to strike, the Senator is correct.

Mr. CONRAD. First of all, I am still retaining some hope that the chairman of the committee will go to markup in the committee. I really believe that is the right thing to do. Failing that, the Senator is exactly right. The Budget Committee is discharged on April 1, so we could have a budget resolution on the floor on April 2. I hope that in the spirit of comity and bipartisanship we are permitted some time to review what the Budget Committee chairman will offer before we are expected to debate it and discuss it on the floor of the Senate, amend it, and vote on it--we would have an opportunity to review it.

Mr. CONRAD. The Senator may recall, I was here in 1993, as was the Senator from West Virginia. The Senator from West Virginia, as always, was in a critical role in the Appropriations Committee. I was serving on the Budget Committee. There are a series of differences from 1993. First of all, the budget outline we had from that President was far more detailed than the budget outline we have from this President.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. No. That was a 5-year plan. That was a 5-year plan; this is a 10-year plan. And, of course, that means the whole basis for the plan is even more uncertain. Now, I tell you, I used to have to project the revenue for my State. That was one of my jobs. I had to do it for 30 months--30 months. That was very difficult to do. The truth is, nobody can foretell 10 years into the future. There isn't a soul who knows what is going to happen-- what we are going to face in terms of international conflict, what we are going to face in terms of natural disaster, what we are going to face in terms of a health threat, what we are going to face in terms of what this human genome research is going to mean to medical costs. There isn't a soul who can tell us today what we are going to face in terms of international threats, in terms of requirements for our military. There isn't a soul who knows, with any certainty, what is going to happen for 10 years. Yet we have people who are betting the entire farm--I am from North Dakota. That is a phrase we use. We talk about betting the farm. You don't bet the farm in a cavalier way. And that is what is happening. We are betting the farm on a 10-year forecast that the forecasting agency itself says has only a 10-percent chance of coming true.

Mr. CONRAD. Yes.

Mr. CONRAD. Well, the Senator is quite right. What is being contemplated now is to use this special process that avoids the rules of the Senate called reconciliation. The reconciliation process was designed to reduce deficits. That is the whole purpose it was put in place. That was back in the time when we had massive red ink, running huge deficits, again, because of what happened in the 1980s, which I am very much fearful we could repeat this year. So a special provision was put in place back at the time that the Senator has addressed, a special procedure that avoided the rules of the Senate, that circumvented the rules of the Senate; and it was designed for one reason, which was to reduce deficits. And now it is being used to expand debt. It is standing the whole purpose for reconciliation on its head. I conclude by saying we are talking about coming to the floor to do a budget resolution before we ever receive the President's budget. This is the point the Senator from West Virginia was making. We have received an outline from the President. It does not have much detail in it--a lot of pages but not much detail about where the money is supposed to go. We have not yet received the President's budget. Yet we are talking about the Senate passing the budget resolution for the year before ever seeing the President's budget. It makes no sense at all. It makes no sense. It seems to me we should spend that week--instead of debating a budget when we have never seen the President's recommendations--to provide for a stimulus package so that we are dealing with the immediate weakness in the economy and then come back to this longer term plan that the President proposes after we have seen the President's budget.

Mr. CONRAD. Yes.

Mr. CONRAD. We had a good deal of detail from that administration with respect to their recommendations to us on how much money we should spend on various items--what the tax base of the Federal Government should be; what we should be doing with respect to the deficits. There was really a rather detailed outline that is, frankly, missing from what we have been sent so far this year. When you think about it, it is really a very odd circumstance. Not only did we have a full markup in the Budget Committee at that time, so that when it got to the full Senate they had guidance, they had a blueprint for the administration that had substantial detail, and they had full detail from the Senate Budget Committee. What they are proposing this year is little detail from the President and no help from the Senate Budget Committee: Let's just put the budget of the United States out here. It is going to be chaotic because you don't have substantial guidance from the President; you have none from the Senate Budget Committee. There is going to be a free-for-all out here. When they say 1993 should be a role model for what we should do now, there is no comparison. There is no ``there'' there.

Mr. CONRAD. Madam President, I thank my outstanding colleague from West Virginia, Senator Byrd. I rise today to discuss a matter of great importance to this body and I believe to the country that has to do with the formulation of a budget for the United States for the coming year. Last week, the chairman of the Senate Budget Committee told me he does not intend to hold a markup in the Budget Committee to craft a budget resolution for this year. All of the Democrats on the Budget Committee have written the chairman asking him to hold a markup. Today I again publicly ask the chairman of the Senate Budget Committee to allow the Budget Committee to do its work. Never in our history have we failed to have the Budget Committee write a budget resolution for the country--never. There is no reason not to try this year. I understand we have an unusual circumstance because the Budget Committee is divided equally between Democrats and Republicans. That has never happened before either. I do not think any of us can know what would happen if we met as a committee, if we debated, deliberated, and voted; it is amazing what can happen when we listen to each other. I just had the experience of the staff of the Senate Budget Committee, the staff of the chairman, totally misrepresenting the plan I have proposed--totally misrepresenting it. It is clear to me they are not doing that on purpose because I know they are people of good will and they are honest people. I know that. I know they are not misrepresenting it willfully. They are misrepresenting it because they do not understand it. They are misrepresenting it because we have not had a full chance to hear each other. That is why we have committees. That is why we have held hearing after hearing on the questions of how should we craft a budget for the country for the coming year. That is precisely what the Budget Committee has done. The result is there is no group of Senators that has spent more time analyzing what the budget should be. There is no group of Senators that has more fully considered the question of the revenue base, the question of what the spending ought to look like going forward, what we ought to do in terms of paying down national debt. I think it would be a profound mistake for us to miss the chance to have the Budget Committee do what it was designed to do, which is to make the work of the larger body easier because of the concentration of effort of the members of the committee on the responsibility they have. As I sat last week and heard my colleagues on the other side taking my budget proposal and completely misrepresenting it, I realized even more clearly why it is essential that we have a markup in the Budget Committee because that is one place where 22 Senators can sit across the table from each other and debate, discuss, explain, and vote. If we just come out here on the floor, it is going to be chaos. Trying to write a budget for the United States out here on the floor of the Senate will be utterly chaotic. It is not the responsible thing to do. The chairman says we are deadlocked. How do we know? We have never tried. We have never debated, discussed, or voted. That is the role of a committee. I do not think anybody can say where it would end. Last week our colleagues were saying that my plan has more debt reduction in it than there is debt available to be retired. That is just not the case. The plan I have offered saves every penny of the Social Security surplus for Social Security. It saves every penny of the Medicare surplus for Medicare. That is a principle I think most people would endorse. We ought not raid the trust funds. Then with what is left, my plan takes a third for a tax cut--$900 billion--takes a third for high-priority domestic needs, such as improving education, providing a prescription drug benefit, strengthening national defense, dealing with the agricultural crisis, and then with the final third, it starts to address our long-term problem with the retirement of the baby boom generation by dealing with our long-term debt, the debt that is going to face us when the baby boomers start to retire and the requirements and the liabilities of Social Security and Medicare escalate dramatically. What my friends on the other side of the aisle have done is to take the money we have set aside for Social Security and Medicare and say that since that money is not needed immediately, all of that will go for paying down the publicly held debt. And that is the case. That is exactly how the President's plan works with respect to the $2 trillion of publicly held debt he wants to pay down. He is getting that money from the Social Security trust fund because that money is not needed right now. So all of that money is available to pay down the publicly held debt. That is the way my plan functions in part as well, although I set aside all of the Social Security trust fund and all of the Medicare trust fund. The President sets aside just part of the Social Security trust fund and none of the Medicare trust fund. The total for paydown of the publicly held debt under my plan is $2.9 trillion. We just had testimony from the man who managed the very successful debt buydown program under the Clinton administration, Mr. Gary Gensler, that there is that much debt available to pay off. And in fact, it is very clear there is that amount of debt to pay off because just in terms of debt that is maturing in this next 10-year period, there is $2.6 trillion. The President's people have said they can only pay off $2 trillion. It is just not true. I don't know a nicer way to say it. It is just not true. There is $2.6 trillion that matures during this 10-year period alone. Clearly, you can pay all that. We have done a detailed cashflow analysis, saving all the Social Security trust fund, all the Medicare trust fund. People have said, well, you have a cash buildup problem in the Federal coffers if you reserve all of the money for Social Security and Medicare. It is just not true. We have done a detailed year-by-year cashflow analysis, and it shows very clearly there is absolutely no cash buildup problem until the year 2010. And who knows, there may not be a cash buildup problem then because we are all operating off a 10- year forecast--a 10-year forecast--that the forecasting agencies say themselves there is only a 10-percent chance it will come true. That is the forecasting agencies, the people who made the projection, saying to us: We want to alert you; there is only a 10-percent chance this projection is going to come true; there is a 45-percent chance there will be more money; there is a 45-percent chance there will be less money. How would you bet, based on what has happened in the last 6 weeks with the national economy? Do you think that forecast which was made 8 weeks ago is going to be on the high side or the low side? I know where I would be betting. I certainly would not be betting the farm that that number is going to come true. That is unwise. There is not a company in America that would decide to make 10-year commitments of all its nontrust fund money--all of it-- based on a forecast, a forecast that has only a 10-percent chance of coming true. It is just not wise. It is not prudent. It is certainly not conservative. After my plan sets aside all of the Social Security surplus and all of the Medicare surplus, as I said, it then divides the rest in equal thirds--a third for a tax cut, a third for high-priority domestic needs, and a third for our long-term debt. That is where the confusion has come from with the other side. They think anything that has to do with debt must be the publicly held debt. Thus, they are taking the money I have set aside for Social Security and Medicare, which will go to paying down publicly held debt because that money is not needed for the other purpose at the present time, and adding it to the $900 billion we have set aside in our plan to deal with long-term debt. They have assumed that means we are trying to pay off $3.8 trillion of publicly held debt. It is just not the case. It is not what the plan does, not what the plan says, and obviously we know there is only $3.4 trillion of publicly held debt that is currently on the books of the United States. We are not trying to pay off debt we do not have; we are trying to pay off debt we do have. We do have $3.4 trillion of debt today, publicly held debt. That is not the only debt we have because in addition to that, we have the gross debt. The gross debt of the United States as we sit here today is $5.6 trillion. And at the end of this 10-year period, if we follow the President's plan, it will be $7.1 trillion. Gross debt is going up as the publicly held debt comes down. How can that be? That can be because what is happening here is a transfer. As the publicly held debt gets paid down, it is getting paid down under the President's plan and any other plan by the surpluses of the Social Security trust fund. And guess what happens. That money from the Social Security trust fund--under the President's plan, $2 trillion of it--is being used to pay down publicly held debt. So the Social Security trust fund has money in surplus at the present time. Part of that money is being used to pay down the publicly held debt. Guess what happens. The general fund of the United States that is receiving that money to pay down debt now has an IOU to the Social Security trust fund for the same amount. It is similar to taking one credit card and paying off your other credit cards and thinking you are debt free. We are not debt free. The gross debt of the United States is growing. What my plan intends to do is not only address that short-term debt, the publicly held debt, and pay that down, but also to address our long-term debt crisis that is going to get much worse--not because of projections, not because of the forecasts, but because of what we all know is true: The baby boomers have been born, they are living, and they are going to retire. That process starts right beyond this 10-year period when we are all talking about these big surpluses. If we really honestly account for things, if we do it the way any company accounts for things, we do not have a surplus. All this talk about surpluses. Well, I hate to rain on the parade, but there really is no surplus. If we were really being straight in the accounting systems, we would find we do not have a surplus because we have these long-term liabilities that we do not account for in the Federal system, and they are real; they are here to stay. We can just kind of forget about them and wish them away or put them off until tomorrow, but the hard reality is they are there, and they are growing. During this period when we are all talking about surpluses and we are all talking about paying down the debt, the gross debt of the United States is actually growing--$5.6 trillion today. It is going to be $7.1 trillion at the end of this 10-year period. Those are not Kent Conrad's numbers; those are the numbers that are right in the President's book he sent us, the budget blueprint. It says very clearly that gross national debt is growing. The distinction between this publicly held debt and gross debt is the following: The publicly held debt is held outside government hands. The economists argue that is where you should pay attention because it is that debt of government which is competition with other debt. That is debt that is in the public marketplace. That is debt that has to be financed by somebody. That is the debt that is in competition with other, private sector players who are seeking to finance what they do-- whether it is build a building, build an Internet highway, or build new housing. That is why economists say: Pay attention to the publicly held debt. It is also true that this other debt, the gross debt of the United States, has exactly the same legal claim on our government as the publicly held debt. Just because the Social Security Administration holds the bonds and says, Federal Government, you have to pay us back, that is no different than a German bondholder, holding that bond, saying, we want to be paid back. Both of them constitute legal claims against this government. Both of them require our attention. So far the President only talks about the publicly held debt. He says he is paying off as much of it as can be done. We disagree on that point. We think we can pay off much more of the publicly held debt than he asserts. We think the hearing before the Budget Committee last week demonstrated that quite clearly, that there is more publicly held debt to be paid off than the President asserts. The much larger point is the President is not addressing this long- term debt, this gross debt that is growing every day. He is doing nothing in terms of setting aside money to deal with that long-term debt. That is why the plan I have proposed uses 70 percent of these projected surpluses--70 percent--for debt, both short term and long term. The President's proposal reserves about 35 percent of these projected surpluses for debt. The plan that I have proposed on behalf of Democrats pays down about twice as much debt as the President's plan. He has a much bigger tax cut; we have a much smaller tax cut. Our tax cut is about half as big as his because we are paying down twice as much debt. That is the biggest difference. There are also some differences in spending, although they are more modest differences than the difference between what we are doing on the debt and what he is doing with respect to tax cuts. The big difference is, we are more aggressive at paying down debt; he is more aggressive with the tax cut. He says it is the people's money. He is exactly right; it is the people's money, but it is also the people's debt. Don't make a mistake about this. We are the ones who are going to have to pay this debt. It is the people's Social Security and it is the people's Medicare and it is the people's defense. This is not a question of the government versus the people--not at all. The truth is, this is the people's money. I don't think any of us ever forget that. This is the people's money. It is also the people's debt. And that debt will come due just as certainly as we are standing on this floor today. If we have failed to be responsible about getting ready for when that debt comes due, all of us who are here now who make the fateful decisions are going to be held to account. It will be our names in the book of history as to what was done at the critical time in our Nation's economic future. It is our responsibility to be good stewards of the people's money. I end by urging the chairman of the Senate Budget Committee to have a markup in the committee to establish a budget for the country for the coming year. We have that responsibility. The suggestion that we are deadlocked before we even start misses the point. We are often deadlocked before we debate and discuss and vote. That is why we have debate, discussion, and votes--to break deadlocks. I hope very much that the Budget Committee will meet its responsibility and attempt to write a budget resolution. That is our obligation. I hope we will meet it. I thank the Chair.

Mr. CONRAD. I am happy to yield.