Kent Conrad

Mr. CONRAD

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

Mr. CONRAD. I yield time to the Senator from Montana.

Mr. CONRAD. Mr. President, I want to respond briefly to my colleague from Iowa who said a series of things that are just not so. He said this amendment is bad medicine for seniors. Come on. This amendment protects the Social Security trust fund, and it protects the Medicare trust fund. It prevents them from being looted and raided for other purposes. That helps seniors. He says it suggests there is a trust fund surplus in Medicare. It doesn't just suggest it; there is one. This is from the Congressional Budget Office. It says very clearly there is $400 billion in surpluses. The President's budget says $500 billion in the Medicare trust fund. The Senator from Iowa says you can't have a tax cut with this amendment. Nonsense. You can have a tax cut with this amendment. This only says don't raid Social Security, don't raid Medicare. The only way it endangers a tax cut is if their intention is to raid Social Security and Medicare to pay for one. Now, finally, Senator Grassley has the plan I have talked about being all mixed up. He has taken the $2.9 trillion dedicated for reduction of the publicly held debt and he added that to the $900 billion that is reserved for strengthening Social Security for the long term and says all of that money is designed to deal with short-term debt. Wrong. That is just wrong. The $2.9 trillion is to eliminate our short-term debt. The $900 billion is to deal with long-term debt. Unfortunately, they have not set aside any money to deal with long-term debt. This amendment is simple. It is designed to protect the trust funds of Social Security and Medicare against raids for other purposes. I yield the floor.

Mr. CONRAD. Mr. President, the argument of my colleague from New Mexico that somehow we are going to be paying big premiums to foreign debtholders has nothing to do with my provision here. My provision protects the trust funds of Social Security and Medicare against raids for other purposes. If you save the Social Security and Medicare trust funds in that way, there is no cash buildup problem until the year 2010--2010. If the issues the Senator from New Mexico addresses become a problem, we have a lot of time to deal with it. You can save every penny of these trust funds and not have any of the problems he talked about, at least until the year 2010. Many of us believe we will never have them. Mr. President, what is this amendment about? It is very simple: It says we are going to provide the same protection to the Medicare trust fund that we provide the Social Security trust fund. It says we are going to provide additional protection to the Social Security trust fund so that this Congress can't go back to the bad old days of raiding every trust fund in sight to pay for other purposes. That is what we used to do. We have stopped that practice. Let's make certain it doesn't start again. Let's protect the trust funds of Social Security and Medicare. It is the fiscally responsible thing to do. Pursuant to section 904 of the Congressional Budget Act, I move to waive the applicable sections of the act and ask for the yeas and nays.

Mr. CONRAD. Mr. President, let me respond briefly and then we will have a chance to hear from the chairman of the Finance Committee. Senator Domenici said Democrats voted against a lockbox last year. That is only part of the story. Democrats voted for the lockbox that passed on a bipartisan basis. We voted against one version of the lockbox that threatened, according to the Secretary of the Treasury, the ability of Congress to pay the national debt. Yes, we voted against the lockbox provision that threatened the good credit of the United States, but we supported the lockbox that protected Social Security and Medicare that passed on a bipartisan basis. Second, the Senator says the House passed, by a huge margin, the lockbox he is offering. The House was not permitted to consider an alternative. This alternative, the one I am offering that passed the Senate last year, is far stronger. Third, the Senator says we would take the Medicare Part A trust fund off budget. That is exactly right. We would treat it the same way we treat the Social Security trust fund to give it the full protection it deserves. Finally, the Senator says we threaten Medicare reform and the ability to write a prescription drug benefit. That is not the case. My amendment creates a point of order against legislation that makes the trust fund less solvent, not more solvent. Medicare reform is intended to make Medicare more solvent, not less solvent. In addition, new spending for a drug benefit would not reduce the Part A surplus and, therefore, would not be subject to any point of order under my amendment. This measure is not meant to defeat a tax cut or any other measure. It is designed to protect the Social Security and Medicare trust funds. This is what we voted for on a bipartisan basis last year. I hope we will do the same this year and say, whatever else we do, we are not going to raid the trust funds of Social Security and Medicare. I yield the floor.

Mr. CONRAD. Mr. President, my amendment is designed to protect the Social Security trust fund and the Medicare trust fund. It has been called the Medicare-Social Security lockbox. That is a good description. It is designed to try to prevent these trust funds from being used for other purposes, from being used as we saw in the past for spending on other programs. A quick description of what my amendment provides is the following: First, it protects Social Security surpluses in each and every year; Second, it takes the Medicare Part A trust fund off budget just as we have taken the Social Security trust fund off budget, again to try to protect it from being raided and used for other purposes; Third, it gives Medicare the same protections as Social Security; Fourth, it provides strong enforcement legislation and strong enforcement provisions to make certain that protections hold. The alternative--the legislation that will be offered by my colleague, the Senator from New Mexico, chairman of the Senate Budget Committee--does not take Medicare off budget. It contains huge trapdoors for anything labeled ``Social Security and Medicare reform.'' In other words, they have a lockbox that leaks. They have a lockbox where the door is wide open. The money can be used for other purposes as long as they call it Social Security or Medicare reform. There is absolutely no definition of what constitutes Social Security or Medicare reform. The proposal of my colleague does not add any new protections for Social Security and does not protect Medicare from sequester. This constitutes what I call the broken safe. The door is wide open to what my colleague from New Mexico is presenting. Under the President's budget, not a penny is reserved for Medicare. In fact, the President takes the Medicare trust fund and puts it into a so-called contingency fund available for other purposes. In fact, as we have already heard, he went to my State and told folks there that if they need money for agriculture, go to the contingency fund. If people need money for defense, they are being told to go to the contingency fund. If they need more money for education, go to the contingency fund. If they need money for a prescription drug benefit that really delivers something, go to the contingency fund. That money is going to be spent four or five times over. Some on the other side say: Look, there is no trust fund surplus in Medicare. That is not what the Congressional Budget Office says. On page 9 of the ``Budget Outlook,'' under the table ``Trust Fund Surpluses,'' they start with Social Security. Then they go to Medicare. And they point out that Part A of Medicare has over a $400 billion surplus. They point to Medicare Part B. And that is in rough balance over the 10 years of this forecast period. Some on the other side say: Oh, there is a huge deficit in Medicare Part B; therefore, we should not worry about the surplus in Medicare Part A. I just say to them, the law does not say that. The actuaries do not say that. Medicare Part A is in surplus. Medicare Part B is in rough balance. There is no justification for taking the Medicare trust fund that is in surplus and moving that money into this so-called contingency fund that is available for other spending. That is precisely what will get us into financial trouble in the future. I hope my colleagues will support having a protection mechanism for both the Social Security trust fund and the Medicare trust fund. It makes sense for the country, it makes sense for taxpayers, and it makes sense for beneficiaries. Most of all, it makes fiscal sense. And that is what my amendment is all about: to wall off the Social Security trust fund and the Medicare trust fund so they cannot be raided for other purposes. I thank the Chair and yield the floor. Mr. DOMENICI addressed the Chair.

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

Mr. CONRAD. Mr. President, is it in order at this point for me to raise a point of order against the amendment?

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

Mr. CONRAD. Parliamentary inquiry: Didn't the Senator from New Mexico have to have raised a point of order against my amendment before the amendment was voted on?

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise this morning to discuss once again the amendment that will be voted on after the party caucuses at 2:45. The amendment I am offering is to wall off and protect the Social Security and Medicare trust funds from being raided, from being used for other purposes. I think every Member of this body remembers very well the time in which, for years, Social Security trust funds were regularly raided for other purposes. We only stopped that practice 3 or 4 years ago, and I think all of us do not want to go back to those days. The best way to assure that we do not go back to those days is to agree to the amendment I have offered today, the amendment that is virtually identical to the amendment I offered last year that got 60 votes in the Senate. We call it the Social Security and Medicare lockbox amendment because it protects both the Social Security surplus and the Medicare surplus. In fact, if we go to the detail of what we are discussing, this amendment protects the Social Security surpluses in each and every year, takes the Medicare Part A trust fund off budget in the same way we have taken the Social Security trust fund off budget, and gives Medicare the same protections as Social Security. This legislation contains strong enforcement language--budget points of order--to assure these funds are not used for some other purpose. One of the things that leaves out, for anyone studying the President's budget proposal, is unless he uses Medicare trust fund money in 2005, he runs an $11 billion deficit in that year. That is part of the problem with this budget. It threatens to put us back into deficits because the tax cut is so large. Some of us believe it is critically important that we protect both the Social Security trust fund and the Medicare trust fund so they are not used for other spending in the Federal budget. Some have argued, well, there really is no surplus in Medicare; that there are two trust funds, and there is a surplus in one--that is, Part A of Medicare, the hospital coverage part of Medicare, and Part B that covers largely doctors' services, which is in deficit. I have heard this argument made over and over, but it is just wrong. It is not what the law says. It is not what the actuaries say. It is not what the detailed financial reports that have been made to the Senate say. This is the page right out of the budget book from the Congressional Budget Office. It says on the table on page 19 ``trust fund surpluses.'' The first one is Social Security. It shows year by year the surpluses we will have in Social Security. Then it talks about Medicare. The first trust fund it discusses is Part A. You can see year by year the surpluses that are projected for Medicare Part A. Under the Congressional Budget Office scoring, this adds up to over $400 billion. In the President's analysis, it is over $500 billion of surplus in Part A. Then it goes to Part B. While some have argued that Part B is somehow in deficit and therefore there are no surpluses in Medicare, that isn't what the report shows. The report shows that over the 10-year period there is a rough balance in Part B--not a deficit. It is not any big surplus. Those who have argued that there is no Medicare surplus--I don't know what it is based on. But it is not based on the facts, and it is not based on the law. Some have tried to argue, well, because Part B is funded 25 percent by premiums and 75 percent by general fund revenue, therefore Part B is in deficit. Again, that isn't what the law says. That isn't what the actuaries say. That isn't what Congress has said. Congress made the determination that Part B would be funded 25 percent by premiums, and 75 percent by general fund revenue. We made that determination. It is not in deficit. If one follows the logic, and one says, well, if Part A is in surplus, Part B is in balance, therefore it just doesn't matter somehow because they are claiming Part B is in deficit because 75 percent of its funding is from the general fund, we can just forget about the Part A surplus, and we can move it, as the President does to this so-called ``contingency fund,'' what does that do? That moves up the date of insolvency of Medicare by 15 or 16 years. And Medicare will go broke in the year 2009 and 2010 instead of the year 2025. What kind of a policy is that? What earthly sense does it make to raid the Medicare trust fund and use it for other purposes? I suggest to my colleagues that it makes no sense. It is precisely what we should not do. In answer to my amendment, my colleagues on the other side of the aisle are offering an amendment. This amendment claims to be a lockbox, but the door is wide open. This is what I call the ``leaky lockbox'' because there is no lock. There is no box. And it is wide open to abuse and to raid. There is not a penny that is reserved for Medicare under the President's budget. That happens to be the reality. He takes the whole $500 billion under his calculation of what is in the surplus and moves it to the so-called ``contingency fund'' and goes around the country on Air Force One, as he did in my State, and tells people who are concerned about his cutting the agriculture budget to not worry about that; the money is in the contingency fund. Go to the contingency fund. Boy, are people going to be surprised when they go to the contingency fund and they find that there is nothing there because it is virtually all Medicare trust fund money. There is supposed to be some money there. I don't know what the source of it is other than maybe he is going to raid the Social Security trust fund, too, because there is no money there. Add up the President's budget. I will do it in a minute. There is no money there. We will get a chart that shows those numbers. Let's look at what the Republican amendment says. I must credit and give compliment to those who crafted the language on the other side. It is very attractive language. Here is what it says. They say they have a lockbox for Medicare. But then they have this clause which they call ``exception''. ``Subparagraph A''--that is the language that gives protection-- ``shall not apply to Social Security reform legislation or Medicare reform legislation.'' Who can be against reform? I am certainly not. I have been an advocate and have voted for reform--even sometimes unpopular legislative proposals--because of the clear and compelling need for reform. But when you write language such as this, it is a giant trapdoor because there is no definition of what constitutes ``reform.'' You can do anything and call it reform and use the money. That is what is wrong with the amendment on the other side. You could, under the cloak of reform, cut taxes. Under the cloak of reform, you could say with Medicare that we are going to take that money and pay for prescription drug benefits. Some might call that reform. The problem with that is that it is classic double counting. That is exactly how we will get in trouble around here--if we first say money is attributed to the Medicare trust fund for the purposes of keeping the promises already made, and then we take a part of it and use it for new promises. That is a mistake. That will do nothing but create financial trouble for this country. The trouble it will create is if money is diverted from the Social Security trust fund or the Medicare trust fund--that money which is currently reserved for paying down the publicly held debt because it is not needed until a later point in time--it reduces the amount of money available to pay down the publicly held debt. That means you pay down less debt. That means you have more of a hole to dig out of when the baby boomers start to retire. I know the occupant of the chair disagrees with this analysis. He and I had a long conversation on the bus the other day. I think it is undeniable that if you take money that is in the trust funds of Medicare and Social Security and divert that money for any other purpose, you are reducing what is used to pay down publicly held debt. I think it is undeniable. That has real economic consequences. I want to go to the question of the President's budget because we have heard over and over that there is this contingency fund. I am unable to locate the contingency fund as I add up the President's numbers. First of all, we have the $5.6 trillion projected surplus. Everybody agrees that is the projection. I think the first thing we should remember is that it is a forecast, and it may or may not come true. In fact, the forecasting agency itself has told us there is a 10-percent chance that number comes true; there is a 45-percent chance it is bigger; there is a 45-percent chance it is smaller. There is also agreement on what follows. The Social Security trust fund is $2.6 trillion, according to the President's Office of Management and Budget. The Medicare trust fund is $500 billion. If we set them aside, that leaves $2.5 trillion. That is not what the President's budget does because it only uses $2 trillion of the Social Security trust fund--he only reserves $2 trillion. The other $600 billion is left for, perhaps, privatization. I have been told by people close to the administration that is their intention. As to the Medicare trust fund, they do not reserve it at all. But if we were to reserve it, as most of us believe is important, it leaves us with an available surplus of $2.5 trillion. Then we look at the Bush tax cut, advertised at $1.6 trillion. Part of it has now been reestimated by the Joint Tax Committee for action in the House, and those two parts that they reestimated increased by $126 billion. So unless the President changes his proposal, the cost of his tax cut is now $1.7 trillion. In addition to that, the President's proposal will have a dramatic effect on the alternative minimum tax. The alternative minimum tax today affects about 2 million taxpayers. The Joint Tax Committee has now told us that if the Bush plan passes, it will affect, at the end of the 10-year period, over 30 million taxpayers in the United States. Over 30 million taxpayers will be affected by the alternative minimum tax under the Bush proposal. And to fix it will cost $300 billion. This is not part of the President's plan, but it is made more necessary by the President's plan. He provides no resources--none, zero--to deal with it. I do not believe, for one moment, that this Congress is going to allow over 30 million people to be caught up in the alternative minimum tax. But if we do not provide the resources to fix it, it will happen. The third is the interest cost associated with the first two. That is another $500 billion. Then we have the Bush spending proposals, those proposals that are above the so-called baseline of $200 billion. That adds up to $2.7 trillion. And that is before any defense initiative the President might apply or send as a suggestion. The result is, we have a package here that simply does not add up. So I hope, I say to my colleagues, that before the end of the day we adopt this amendment to protect both the Social Security trust fund and the Medicare trust fund. I thank the Chair and yield the floor.

Mr. CONRAD

Mr. CONRAD. I will be happy to yield with the understanding I be recognized after the Senator from Pennsylvania takes care of the business he has brought to the floor.

Mr. CONRAD. Mr. President, I ask unanimous consent the time be extended so both sides have their full morning business time.

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank my colleague for nice, kind words this morning. I appreciate that. I rise this morning to talk about what I think is a very important amendment. It is an amendment I offered yesterday to provide protection to the trust funds of Social Security and Medicare. We call it the Social Security and Medicare off-budget lockbox. It is designed to save both the trust funds of Social Security and Medicare. Mr. President, this is critically important because it is right at the heart of the debate that is going to occur this year over our budget priorities. My Social Security and Medicare lockbox amendment protects Social Security surpluses in each and every year, takes the Medicare Part A trust fund off budget, gives Medicare the same protections as the Social Security trust fund, and it contains strong enforcement provisions. This is the amendment we voted on last year on the floor of the Senate. We had 60 votes, a strong bipartisan vote, to protect both the Social Security trust fund and the Medicare trust fund. Speaker Hastert, in speaking on a bill offered in the House said: We are going to wall off Social Security trust funds and Medicare trust funds . . . and consequently, we pay down the public debt when we do that. So we are going to continue to do that. That's in the parameters of our budget and we are not going to dip into that at all. In other words, the Speaker is endorsing the principle, at least, of what is contained in this amendment, this legislation. Unfortunately, if you look at the lockbox they passed in the House, it has a giant trapdoor. It is not really protecting the two funds, the Social Security and the Medicare trust fund. I think we can do better here in the Senate. We did last year, and I think we can again this year. Really, what they passed is what I call a ``leaky lockbox.'' It doesn't really protect Social Security and Medicare trust funds because it has a big exception that will allow them to be used for other purposes, to be used for new commitments for Social Security and Medicare. I think all of us know we need the Social Security and Medicare trust funds to keep the promises that have already been made. We have additional challenges, no question about that. We have a long-term challenge of Social Security that will not be solved even by saving every penny of the trust fund. We are going to have to put more money into it. But I don't believe we should set those funds up to be raided for any other purpose. Some will say if you save the Social Security and Medicare trust funds, you are going to build up cash, and then the Government will have to figure out what to do with that cash. Let me just say that we have done a detailed cashflow analysis. You can save every penny of the Social Security and Medicare trust funds and have no buildup of surplus cash until the year 2010--2010 is 9 years from now. That gives us plenty of time to adjust to that, if indeed it begins to happen. If these forecasts that have been made actually develop, if we actually see them coming true, we will have plenty of additional time to adjust. I go back to a statement made by a fellow Budget Committee member, Senator Phil Gramm of Texas, who is also on the Finance Committee. He said, back in 1998, in the Budget Committee deliberations: But the fundamental strength of it is, whether they are Democrats or Republicans who have gotten together in these dark corners of very bright rooms and said, what would we do if we had a half trillion dollars to spend? The obvious answer that cries out is Medicare. I think it is logical. People understood the President on save Social Security first, and I think they will understand save Medicare first. Medicare is in crisis. We want to save Medicare first. What we are saying in this legislation is, we want to save Social Security and Medicare. We ought to treat the trust funds of Social Security and Medicare in the same way. We ought to protect them both, give them the same protections. We don't in current law. In current law, we give much more protection to the Social Security trust fund than we do the Medicare trust fund. We all know the Medicare trust fund is in greater danger; we face insolvency in a more recent timeframe than we do with Social Security. So what we are saying is, let's protect them both. That just makes common sense. The chairman of the Budget Committee said this at that same time back in 1998: For every dollar you divert to some other program, you are hastening the day when Medicare falls into bankruptcy and you are making it more and more difficult to solve the Medicare problem in a permanent manner into the next millennium. That is absolutely right. The chairman of the Budget Committee was right then, and this same sentiment is right now. We should not raid the Medicare trust fund for other purposes. That hastens its insolvency. Let me say the proposal the Republicans have made that will be the competing proposal to what I have offered, which will be voted on on Tuesday, I refer to as the ``Republican broken safe.'' Under the President's budget plan that he has sent us, not a penny is reserved for the Medicare trust fund, not a penny. That is kind of startling and almost hard to believe, but it is true. So their broken safe has a wide open door on it. It has a wide open door because the President doesn't reserve any money for the Medicare trust fund. It has a wide open door because the proposal that has come over from the House is very leaky. It has a huge, ``we will protect the Medicare trust fund, unless we don't.'' That is not going to work, or sell, and it should not because it is not right. One of the reasons this proposal is necessary is because, if you look at the President's budget proposal, it simply does not add up. As I have gone through the numbers and tried to determine the President's plan and the effect of the President's plan, here is what I have found: The projected surplus is $5.6 trillion. That is what the CBO says and what the OMB says, and we all know that is a 10-year forecast, and we all know it is highly uncertain. We all know there is only a 10-percent chance that is really going to come true. The people who made the forecast told us there is a 45-percent chance it will be greater than that. There is a 45-percent chance it will be lower than that. That counsels to many of us that we ought to use caution here. The President says the Social Security trust fund is $2.6 trillion out of that $5.6 trillion. His documents say the Medicare trust fund is $500 billion of that $5.6 trillion. If you subtract out the Social Security and the Medicare trust funds, you wind up with an available surplus of $2.5 trillion. If we look at the cost of the Bush tax cut, here is what we find. It has been advertised as a tax cut of $1.6 trillion, but when the House considered parts of the President's tax cut, they reestimated the cost, and they increased the cost by over $100 billion. For just part of what the President has proposed, they have increased the cost by over $100 billion. Part of that is moving up the effective date. Part of it is a reestimate of the true cost of parts of the President's proposal. Instead of a $1.6 trillion tax cut, it is a $1.7 trillion tax cut. In that same reestimate done for the House, we learn that there is a very serious problem that will be created or made worse by the President's proposal, and that is the alternative minimum tax. The alternative minimum tax today affects about 2 million taxpayers. The Joint Tax Committee has now told us if we pass the President's plan, the alternative minimum tax will affect not 2 million people, but over 30 million people. Let me repeat that. The Joint Tax Committee has now told us that if we pass the President's tax plan, it will affect not 2 million people in the alternative minimum tax, which is currently the case, but over 30 million people, and that it will cost $300 billion to fix it. That has to be added to the President's plan. It is not in the President's plan. It is not there, but this is made more necessary by the President's plan, and it will cost $300 billion to fix. The interest cost associated with this tax cut and the alternative minimum tax reform is another $500 billion because anytime you spend money or cut taxes, that means you have greater interest costs and the interest cost associated with that tax cut and the alternative minimum tax reform that it makes more necessary is $500 billion. Then we have the President's spending initiatives over the baseline. That is $200 billion. If you add up the President's tax cut, his spending initiatives, it is $2.7 trillion, but if you are protecting the Social Security and Medicare trust funds, you only have $2.5 trillion available. He is, by my calculation, $200 billion in the hole already and counting, and it will be more because we have yet to have the estimate of what his estate tax elimination costs. We can be confident it is going to be far higher than the previous estimate because of the economic changes that have occurred in the interim. They have not reestimated his marriage penalty proposal, which we know is going to be higher, again because of changes that have occurred in the economy since the previous estimate. This is before any defense initiative sent forward by the President. Does anybody in this Chamber not believe the President is going to send up a major defense initiative next year? We all know he is. I personally believe he should. I think we are going to need more money in defense, but it does not end there. Some of the tax extenders are included in the President's baseline; others are not. We all know the provisions that affect energy are going to be extended in the Tax Code. There is a cost to that. That is not in these calculations, and it does not stop there because we now know the President's prescription drug proposal is badly deficient in terms of the resources he has dedicated to a prescription drug benefit. The Republican chairman of the Finance Committee said to us the number is going to have to be much higher to have a serious prescription drug benefit; it is going to be much higher than what is in the President's budget. The President has $153 billion in his estimate for a prescription drug benefit. The Congressional Budget Office is telling us the estimates on all the prescription drug proposals are being increased by about one-third because of new information on what is happening to the cost of pharmaceuticals. I am saying this to my colleagues and I am saying this to anybody who is listening because when you add these things up, the President's proposal simply does not make it. There is this tremendous gap between what is available if we are protecting the Social Security and Medicare trust funds and what is being used. In fact, it is very clear that the President is using all of the non-trust-fund money for his tax cut and its related expenses. It is clear, I just do not know how any of this can be in any serious question. We all agree on the projected surplus, and I think most of us understand it is highly uncertain. It is a 10-year number. The forecasting agency itself has told us it is highly uncertain. This is the President's own number for the Social Security trust fund. This is his number for the Medicare trust fund. The Bush tax cut--this is the reestimate done on the House side of just part of his plan, and it added $100 billion to the $1.6 trillion that has been so much discussed. We know there is an interest cost associated with any tax cut or any spending proposal. The spending initiatives of the President are not in dispute. It is $200 billion above the so-called baseline. The only question there can be of these figures is this one, fixing the alternative minimum tax. The President has not included it in his plan, but it is clearly made necessary by his plan. We cannot take 2 million people who are currently caught up in the alternative minimum tax and have it affect 30 million people. That will never be tolerated in this country, and it should not be. It would be unfair for 30 million taxpayers. And they are not saying 30 million, they are saying substantially in excess of 30 million people will be caught up in the alternative minimum tax if the Bush tax cut proposal is passed. It costs $300 billion to fix. That is not Kent Conrad's number. That is the number of the Joint Committee on Taxation. There is something else people should know in this Chamber that I call the dirty little secret of the President's budget proposal. The President's budget is in deficit in the year 2005 if he does not raid the Medicare trust fund. The reason I believe his proposal does not protect the Medicare trust fund is that he needs the money in the year 2005 to avoid being in deficit. These are the numbers from his proposal. What they show is that in the year 2005, the President's budget is in deficit unless he is using the full Medicare trust fund surplus. Some of us believe that is a profound mistake, that that is not a place we should go; we should not raid the Social Security trust fund surplus for any other purpose; we should not raid the Medicare trust fund for any other purpose; we should hold those funds for the purposes intended. We should protect the Social Security trust fund. We should protect the Medicare trust fund. We should not allow them to be raided for any other purpose. This year, certain Republicans have asserted there is no trust fund surplus in Medicare. It is a bizarre argument, is the only thing I can say. Their argument is there is a Part A trust fund to Medicare and there is a Part B trust fund. They say the trust fund of Part A is in surplus by $500 billion. They say the Part B surplus is in deficit. As I said yesterday, there is no Part B trust fund deficit. There is none. They are arguing there is a surplus in Part A, there is a deficit in B, so let's not count the trust funds at all in Medicare. What a bizarre argument. No. 1, they are factually wrong. There is no deficit over the 10 years in Part B. I direct them to page 19 of the Congressional Budget Office report. Page 19 of this report, available to every Member of Congress, makes it very clear in table 1. It is titled ``Trust Fund Surpluses.'' First is Social Security. We all know Social Security has a trust fund and it is in surplus. That is, it is in surplus during this period of time. It is needed when the baby boomers start to retire. So ``surplus'' is a little misleading. It is in surplus temporarily, but it is committed to future liability. The next trust fund mentioned is the Medicare trust fund's Part A. The Congressional Budget Office showed over a $400 billion surplus. Their numbers are somewhat different from the President's numbers. The President has an even larger surplus in trust fund Part A. He has a $500 billion surplus. In Part B, where some are claiming it is in deficit, the Congressional Budget Office shows very clearly there is no deficit over the 10-year period in Part B, it is roughly in balance. The argument that some on the other side are making is, since only 25 percent of the Part B trust fund is for premiums and 75 percent comes from the general fund, that means it is in deficit. That isn't what the law says. That isn't what the actuaries say. That isn't what the Congressional Budget Office reports. They report the Part A trust fund is in surplus. They report that the Part B is in balance over the 10- year period. There is no justification for making the claim that if you put the two together there is no surplus at all, because there clearly is. Even if there weren't, if there were a deficit in Part B, what earthly sense would it make to move the Part A trust fund surplus to a category called ``undesignated,'' called ``contingency fund'' in the President's plan? That is what he has done. He has taken all of the Medicare trust fund money and moved it from a committed category, a trust fund category, to an undesignated category, a category available for every other kind of spending. In my State yesterday, he stated he has this fund, this uncategorized fund, this undesignated fund, and if you need more money for agriculture, go to that fund. It is kind of the magic asterisk. There is no such fund. There is no such fund unless you raid every penny of the Medicare trust fund. If somebody does it, they will be held to account, because some of us are going to tell the truth and we are going to remind people there is a trust fund of Medicare and a trust fund of Social Security and that both of them deserve protection and both of them deserve support and both of them should not be used for other purposes. I frankly think we ought to put more money in agriculture, but I am not for taking it out of the Medicare trust fund. Any move to use the Medicare trust fund money for other purposes moves up the date of insolvency, and in fact the President's plan to take the $500 billion from the Medicare trust fund and use it for his so-called contingency fund that is available for defense spending or agriculture spending or any other kind of spending, that moves up the date of insolvency of the Medicare trust fund. In fact, the actuaries say if we do what the President has proposed and take the money from the Medicare trust fund, put it in the contingency funds, and make it available for other spending, we move up the date of insolvency of the Medicare trust fund by 16 years and it goes broke in the year 2009. Some of us will not have any part of that plan because it is wrong. It is wrong for the country. It is wrong for Medicare. It is wrong to take trust fund money that has been designated for a specific purpose and seek to raid it for other purposes. That is what has gotten us into financial trouble in the past. That is what would get us into financial trouble in the future, if we permitted it to happen. This is a debate that deserves to be heard all across this country. It is fundamental to the economic future of America. Do we raid the trust funds to try to provide an oversized tax cut, or do we protect them? That is the question. I believe our colleagues will rally around a principle they have rallied around before, which is the fundamental notion, you don't raid trust funds: You don't raid Social Security trust funds, you don't raid Medicare trust funds; those funds ought to be lockboxed, they ought to be walled off, they ought to be protected. That is what this amendment is all about. I believe this is what the American people support. On Thursday, the Los Angeles Times reported that the American people, if they are asked: Are you for the Bush tax cut? Are you against it? overwhelmingly, they say they are for it. If you ask the American people about the choices, they give quite a different answer. When The Los Angeles Times asked in a nationwide poll if they would prefer the Bush tax cut or the Democratic proposal that had a tax cut half as big as the President proposed, with more money for Medicare, more money for education, and more money to pay down debt--which would they prefer-- then the American people gave this answer: 30 percent said they were for the Bush tax cut; 55 percent said they were for the alternative plan to reduce the size of the President's tax cut in half and to have more money to strengthen Medicare, to improve education, and to pay down more of the debt. That is what the American people are supporting. Yes, they want a tax cut, but they want one that is affordable. They want one that gives room to strengthen Social Security, improve Medicare, enhance education, strengthen defense, and pay down more of our national debt. That is where the American people are. That is where I hope this Chamber will be. The first fundamental test is on Tuesday. The basic question: Do we protect the Social Security and Medicare trust funds? I hope very much we get the same result this year as we got last year. The result last year was 60 votes, on a strong bipartisan basis, for the fundamental principle that we do not permit a raid of the Social Security or the Medicare trust funds. That is important for the future of our country. It is important for the future of our economy. I hope very much this Chamber will say we are not going to abandon fiscal discipline. We are not going to abandon the notion that we ought to pursue the maximum paydown of both our short-term and long-term debt. That is in America's interest. That is what is at stake on Tuesday. I thank the Chair. I yield the floor. I suggest the absence of a quorum.

Mr. CONRAD

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

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

Mr. CONRAD. I object.

Mr. CONRAD. Mr. President, the amendment I have sent to the desk is an amendment to provide protection to both the Social Security trust fund surplus and the Medicare Hospital Insurance Trust Fund surplus. Mr. President, this is legislation I offered last year that passed the Senate on a bipartisan basis with 60 votes. I hope that again this year we can send a very strong signal in this body that we fully intend to protect the Social Security and Medicare trust funds; that we intend to establish a lockbox to wall off those trust funds from being used for any other purpose; that we would assure the American people that the Social Security trust fund and the Medicare Trust Fund will not be raided, will not be used for other spending, will not be used for any other purpose, will not be used for a tax cut; that we will assure those who are the beneficiaries of Social Security and Medicare--those who make payments to those programs--that the money they have paid in will be used for the purposes intended. This amendment, very simply, takes the Medicare Hospital Insurance trust fund completely off budget the same way we have protected the Social Security fund. It would add points of order to ensure that neither Social Security nor Medicare surpluses could be used for any other purpose. As you know, Social Security is already off budget. This amendment would treat the Medicare Trust Fund the same way as we already treat the Social Security trust funds. It would also create points of order against any legislation that would reduce the Medicare Hospital Insurance trust fund surpluses. Similar points of order already apply to Social Security. In addition, the amendment strengthens existing rules that protect Social Security. For example, we establish a point of order protecting Social Security's off-budget status. Our amendment also includes a point of order protecting Social Security surpluses in every year covered by a budget resolution, which is a strengthening over current law. Again, this is largely, almost entirely, the amendment that passed the Senate Chamber last year with 60 votes, and it was a strong bipartisan vote. Many of us believe we should not raid the Social Security and Medicare trust funds, period. Ninety-eight Senators voted last year in favor of this principle; 60 voted for my proposal; I believe over 50 voted for Senator Ashcroft's proposal. But when you looked at the vote, 98 Senators voted for one or the other. I ask my colleagues to again endorse that principle. Again, if we look at the specifics, it protects Social Security surpluses in each and every year. It takes the Medicare Hospital Insurance trust fund off budget. It gives Medicare the same protections as Social Security, and it contains strong enforcement. That is precisely what we offered last year. That is precisely what passed last year. I hope we don't take a step backward this year and water down these protections. Now, some have said if we save both the Social Security and Medicare trust fund surpluses that we will get into excess cash buildup between now and the end of this 10-year budget forecast period. Let me just indicate, as this chart shows, we can save all of the Social Security surplus, and all of the Medicare Hospital Insurance surplus, and not have any cash buildup problem until out in the year 2010. So we don't have a problem for 9 years of any cash buildup, no problem at all until the year 2010. So we have plenty of time to respond to that, if, indeed, it ever develops. As we all know, this is based on a 10-year forecast. It is a forecast that may come true, and may not come true. We are all working off a CBO projection that is a 10-year projection, which the forecasting agency itself tells us only has a 10-percent chance of coming through--10 percent. When we use this figure, $5.6 trillion surplus over the next 10 years, the forecasting agency has told us that only has a 10-percent chance of coming true. There is a 45-percent chance it will be more; there is a 45-percent chance it will be less. The only prudent thing to do in those circumstances is to bet that it may well be less because if, in fact, we overestimate, that has very serious implications of putting us back into deficit. Speaker Hastert said this about the House lockbox bill: We are going to wall off Social Security trust funds and Medicare trust funds and consequently, we pay down the public debt when we do that. . . . So we are going to continue to do that. That's in the parameters of our budget, and we are not going to dip into that at all. Unfortunately, the version that passed the House has an enormous trapdoor in it. They say they are walling off Social Security, they say they are walling off Medicare, but then when you read the fine print, you find out they do not really intend to do that at all. They are fully prepared to dip into those trust funds for other purposes. Our amendment prevents that. If we do not protect the Medicare surplus, we will reduce the solvency of the Medicare Hospital Insurance Trust Fund, reversing years of steady progress in shoring up this program. Let's have a brief history lesson and remind ourselves that in 1992 the Medicare trust fund was projected to become insolvent in the year 2002. That is just 9 years ago. The actuaries studied the program and said we are headed for insolvency in the Medicare program in the year 2002, but by last year, that date was estimated to be 2025, an improvement of 23 years. That is because of actions that were taken in the Congress of the United States to extend the solvency of the Medicare program. Those efforts have worked, but if we now start to spend from the trust fund, and if we take the $500 billion Medicare Part A trust fund surplus projected for the next 10 years and use it for other purposes, we will make Medicare insolvent by the year 2009, 16 years earlier than is now projected. Some have argued that since beneficiary premiums only cover 25 percent of Medicare Part B costs, there is a deficit in that part of Medicare. Part B is funded by premiums and by the general fund. The question before this body is, Do we protect the Hospital Insurance Trust Fund that exists for Medicare in the same way that we protect the trust fund that exists for Social Security? Last year, overwhelmingly our colleagues said yes: we should provide the same protection to the Medicare trust fund that we provide the Social Security trust fund. I hope we will provide that same protection again this year. Some say because Part B only has 25 percent of its costs covered by a premium, therefore it is in deficit. That is not what the law says or what the actuaries report, but that is the rhetoric being used by some who want to justify a raid on the Hospital Insurance Trust Fund for Medicare. They are saying, yes, there is a trust fund for Part A of Medicare and, yes, it is in surplus by $500 billion, but they say Part B only gets 25 percent of its costs covered by premiums; therefore, it is in deficit; therefore, there is no surplus anywhere in Medicare. That is simply false. We know that there is a Hospital Insurance Trust Fund designated in law, and it has $500 billion, according to the Administration. For those who say because Medicare overall is challenged fiscally, therefore there is no reason to protect the Hospital Insurance Trust Fund, let's just take that money and jackpot it and make it available for other expenditure, make it available for defense, make it available for agriculture, make it available for education, make it available for whatever other worthy purpose somebody might conjure up, make it available for a tax cut. The problem with that is, if you take the trust fund surplus that is in existence today in Medicare and you raid it and you use it for other purposes, you shorten the period of solvency of Medicare and you bankrupt the program. It is that simple. It is robbing Peter to pay Paul. It is digging the ditch deeper before starting to fill it in. We should not tolerate raiding either the Social Security trust fund or the Medicare trust fund. In the private sector, if anybody tried to raid the retirement funds of a company, if anybody tried to raid the health plans of a company, they would be in violation of Federal law. They would be on their way to a Federal institution. It would not be the Congress of the United States, and it would not be the White House. They would be incarcerated because they would have violated Federal law. This is a critically important decision that we will make. This is a fundamental decision. Do we protect the Social Security trust fund? Do we protect the Medicare Hospital Insurance Trust Fund or don't we? Do we open the door to a raid on both those funds? I very much hope that the answer in this Chamber, as it was last year, is a resounding no; that we make very clear to any who would raid these trust funds that they are off limits, that they will not be touched, that we are not going to accept using these funds for other purposes. That is what the American people want us to do. That is what we will have an opportunity to do when we vote on this amendment, and we should not take other plans that use the same words but have a trapdoor to them that opens the door to a raid on these trust funds. That would be, I believe, a serious mistake. One other thing I want to point out about the President's budget that is carefully hidden in the numbers: Although the President claims there is enough in his so-called contingency fund to protect Medicare, in fact that is not the case. In the year 2005, the contingency fund totals $36 billion, but the Medicare trust fund surplus is $47 billion. That means if you protect Medicare under the President's budget, you will be raiding the Social Security trust fund to the tune of $11 billion in that year or you will be in deficit by $11 billion. I think that is another demonstration that the tax cut offered by the President is so large that it threatens to put us back into deficit, because that is exactly what it does in the year 2005 if you protect Social Security and Medicare. Under the President's budget, we will be back in deficit in the year 2005 if, in fact, we protect the trust funds of Social Security and Medicare. I believe Senator Kerry is to be recognized for final debate on his amendment. I look forward to talking more about this amendment tomorrow, on Monday and again on Tuesday. I conclude by saying once more that last year we had a strong bipartisan vote. We had nearly 20 Republican Senators join a group of Senators on this side. We had over 60 votes to protect Social Security and Medicare trust funds. I hope we have a vote that is even stronger this year. I yield the floor. Amendment No. 26

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

Mr. CONRAD

Mr. CONRAD. Many malting barley growers believe that current GIPSA measurement standards are unacceptable. When the Congress reauthorized the Grain Standards Act late last year, the Senator and I discussed these measurement standards. The Senate suggests that the Federal Grain Inspection Program Grain Standards division of GIPSA consider new technology that would allow for the more accurate measurement of DON in barley.

Mr. CONRAD. Mr. President, I believe the Senator from Indiana, the chairman of the Agriculture Committee, is aware that barley growers are concerned about the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration testing of deoxynivalenol, or DON, levels in malting barley. Is that correct?

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to join my colleagues in mourning the death of our former colleague from California, Senator Alan Cranston. The nation lost a truly remarkable man last December. Senator Alan Cranston had a long and effective career of public service spanning six decades, including 24 years as a United States Senator. He first entered public service in 1942 as Chief of the Foreign Language Division of the Office of War Information in the Executive Offices of the President. This began his very productive life of public service. I served side-by-side with Senator Cranston for six years. In those six years alone he had his hand in many fundamental pieces of legislation. For example he produced the Cranston-Gonzales National Affordable Housing Act of 1990, the first major piece of housing legislation in a decade. He was also the original author of the California Desert Protection Act, which was enacted in 1993. Throughout his long career, Senator Cranston was a true advocate for the environment, civil rights, and world peace. Whether one agreed or disagreed with Alan Cranston's views, we here in the Senate will always remember him for his integrity and dedication. Alan Cranston fought tirelessly for his beliefs, no matter what the consequence. Yet he was also kind, energetic, and thoughtful. Put simply, I admired and respected Senator Alan Cranston. I would now like to take this opportunity to extend my thoughts and prayers to his sister Eleanor Cranston, his son Kim, his daughter-in-law Collette Penne Cranston, his granddaughter Evan Cranston, and to his remaining friends, family and staff. We will all miss him.

Mr. CONRAD

Mr. CONRAD. The Comptroller General of the United States alerted us that just beyond the 10 years lie massive deficits. We are talking about short-term surpluses, but there are massive deficits to come and we ought to take this window of opportunity to strengthen ourselves for the future. We had four demographers today before the Senate Budget Committee with this same message, telling us that if we would set aside some of these acorns, instead of using them all, consuming them all in a tax cut or spending--but, instead use some of it to pay down this long-term debt and address this long-term demographic time bomb, the retirement of the baby boom generation--that we will have a much stronger economy in the future. It is really a message that Senator Sarbanes has delivered so powerfully in the past to the members of the committee. If we are really thinking ahead, we will realize we ought to take some of these funds and invest them for the future to reduce our long-term indebtedness, to expand the pool of savings, to expand the pool of investment, to take pressure off of interest rates, and to have a much bigger economy when the baby boomers start to retire. That is really the lesson that Senator Sarbanes has provided to us day after day in the committee as well.

Mr. CONRAD. Will the Senator yield for a question?

Mr. CONRAD. The Senator may recall that Mr. Anderson put up a chart and the chart showed that in the fifth year of this 10-year forecast, based on the previous variances in their projections, we could have a budget that was anywhere from a $50 billion deficit to more than a $1 trillion surplus.