Kent Conrad

Mr. CONRAD

Mr. CONRAD. The Senator from Massachusetts makes an interesting point. We have to be very careful in our use of language around here. When people talk about Government instruments as being IOUs, I suppose in a way that is true. But it probably leaves people with a misimpression. These are Government bonds, U.S. Government bonds. There is no more valued instrument in the world than a U.S. Government bond. I would love to have somebody give me Government bonds worth $700 billion. The suggestion that that has no value is an absurdity. It is an absurdity. They are backed by the full faith and credit of the U.S. Government. There has never, ever been a default on an obligation of the U.S. Government. So this kind of careless use of language I think misleads people. Of course they have value. They have exactly the value that is on their face. These are bonds that have $700 billion worth of value, plus they earn interest. The fact is, this suggestion that it doesn't make any difference if you transfer these instruments, these bonds, to the trust fund is just wrong. They extend the solvency of the Medicare trust fund by 12 years. Is that the only thing we should do? Certainly not. Senator Breaux is exactly right. That is not the only thing we should do. Maybe it is not even the first thing we should do. But we have to decide on a budget resolution right now. We do not have the luxury of waiting until the reform plan is passed. We have to make a decision how resources are going to be used around here. What we are suggesting is the resources ought to be used in a certain priority order. The first priority is using every penny of the Social Security surplus for Social Security. Then we are saying, in the non-Social Security surplus, the next priority ought to be to strengthen Medicare. We think that is a priority of the American people. Yes, there ought to be reform as well, and then we ought to also have some resources that are available for high-priority domestic needs like education and defense--and, yes, tax relief. But the first priority of the non-Social Security surplus is not tax relief, especially tax cuts that are designed to go to the wealthiest among us. We had, yesterday, a discussion of what some on the other side want in terms of an across-the-board cut. To those who are earning $800,000 a year, they would give $20,000. To those earning less than $38,000 a year on average, they would give $99. I think it is a higher priority for the American people to strengthen Social Security and extend its solvency than to go out and give back $20,000 to somebody who is making almost $1 million a year. That is a question of priorities. It is the difference between us. The Senator from Massachusetts is right on this question.

Mr. CONRAD. Mr. President, I hope people think very carefully about this amendment as drafted. Because it seems to me, if they vote for it, they are saying they do not want to do anything to extend the solvency of the Medicare trust fund. They are adopting, it seems to me, a view that, at least with respect to the surpluses that are projected over the next 15 years, they do not want to dedicate any of that money to extend the Medicare trust fund solvency, and the fact is the Medicare trust fund is in more immediate danger than is the Social Security trust fund. We expect insolvency in the Medicare trust fund by 2008. That is why some of us feel strongly that we ought to keep alive the possibility of transferring some of these surpluses that we now project to strengthen and preserve the Medicare system. Beyond that, I think we have to ask the question, are we ready to say that the solution we want to adopt is what the National Commission on the Future of Medicare adopted? They couldn't reach agreement in terms of the supermajority that was required of them to make a recommendation. It seems to me we ought to keep our powder dry until we consider all of the options that we might want to adopt to reform Medicare. Again, I say this with the greatest of respect for Senator Breaux and Senator Kerrey and other Members who served on that Commission, along with Mr. Thomas and others. I have real concerns about what is included in this amendment. Part of it, I think, is just factually wrong. The suggestion that the President is not reserving 15 percent in his framework for Medicare defies the facts. It defies what is clearly in his plan. I do not think it is wise to adopt something that makes false statements. Mr. WELLSTONE addressed the Chair.

Mr. CONRAD. How much time would the Senator like?

Mr. CONRAD. Mr. President, I am pleased to yield 5 minutes to the Senator from Minnesota.

Mr. CONRAD. Mr. President, I have respect for the Senate Finance chairman. When he says he is going to do something, my experience with him is, he does it. That is not at issue here or at question. But I must tell you, I do not read this as a bipartisan amendment. There may be some Democrats who are on it--and I can understand why they are on it--but I tell you, this does not look, to me, like a real bipartisan message that is being sent with this amendment. It looks, to me, like a lot of bash-the-President's proposal and suggestions that what is at the heart of the President's proposal, to transfer some resources from the general fund to strengthen Medicare, has no merit and that the answer is what the bipartisan reform Commission came up with--which did not achieve the necessary agreement of that Commission to make a recommendation. Frankly, I do not think this body should be in a position now to decide that is the answer. I do not think a plan to----

Mr. CONRAD. I am happy to yield to my colleague.

Mr. CONRAD. It reads that way to me. I read the whole thing in its totality.

Mr. CONRAD. I just reclaim my time. Mr. President, I hope colleagues will resist this amendment. I think some of the statements in here are inaccurate. I think it sends a message which is not the message that should be sent at this time. I say that as somebody who is committed to reforming Medicare, as well as one who is committed to putting additional resources into the program. I yield the floor.

Mr. CONRAD

Mr. CONRAD. I thank the Chair.

Mr. CONRAD. Mr. President, I ask unanimous consent that John Jennings, a fellow in Senator Bingaman's office, be granted the privilege of the floor during the pendency of S. Con. Res. 20, the budget resolution.

Mr. CONRAD. Will the Senator suspend for just one moment?

Mr. CONRAD

Mr. CONRAD. That is correct.

Mr. CONRAD. I appreciate that, and absolute affection for the Senator from New Mexico as well. We have a disagreement. I think both of us are being honest and direct about that disagreement. Let me be clear. The Senator from New Mexico says that my amendment does not fix Medicare. That is true. That is absolutely true. My amendment does not fix Medicare; it does not solve the problem. But my Medicare amendment, or the part of my amendment that deals with Medicare, does make a difference, because it reserves funds to strengthen Medicare--nearly $400 billion over the next 10 years. The lockbox offered by our friends across the aisle does not provide one penny of the surplus for Medicare. They say, in answer, ``But we fund Medicare.'' Yes, of course they fund Medicare. That is a budget requirement. Of course they fund it. But in the surpluses that are projected over the next 10 years, they are not setting aside one penny of that surplus to strengthen Medicare. That is a deficiency of their proposal. Let's go back to what the Conrad amendment really does. The Conrad amendment reserves, in a lockbox, every penny of the Social Security surplus over the next 10 years for Social Security. No. 2, the Conrad amendment takes $370 billion over the next 10 years of non-Social Security surplus and reserves that for Medicare. That is a critical first step to solving and resolving the Medicare crisis. No. 3, we still then have about $400 billion left over the next 10 years to deal with high-priority domestic needs--education and health care and, yes, defense and, yes, tax relief--$400 billion that is available for those categories. Our friends on the other side say that is not what we want to do. They say, we just want the money for Social Security and tax cuts, nothing out of the surplus--nothing out of the surplus--for defense, for education, for Medicare. Well, we do not believe those are the priorities of the American people. That is the difference. And that is what this amendment is about. I ask my colleagues, just for a moment, to suspend partisanship on both sides and really look at what this amendment says--not to the characterization of the Senator from Texas. His characterization was his imagination working overtime. It is what he hoped my amendment said, not what my amendment does say. The argument that he made was an argument not against the amendment that is before us but an argument against an amendment that he wished I was offering. My amendment does pay down the publicly held debt more than the budget resolution--by about $300 billion. My proposal pays down publicly held debt more than what is being offered on the other side. I think that is a good priority as well. So not only do we strengthen Social Security, strengthen Medicare, or at least make it possible to strengthen Medicare and also provide for high-priority domestic needs such as education, health care, defense, and tax relief, but we also are in a position to further pay down the public debt. Because every economist who has come before us in the Budget Committee, in the Finance Committee, has told us that that is the highest priority of all--pay down this publicly held debt, to put us in a position to keep interest rates down, to have a stronger economy for the future. Mr. President, I yield the floor and reserve my time. Mr. LAUTENBERG addressed the Chair.

Mr. CONRAD. Mr. President, let me just say, sometimes voices are raised here on the floor, mine included. But let there be no mistake, I have great respect for the chairman of the Budget Committee.

Mr. CONRAD. I do.

Mr. CONRAD. I suppose what we could do is write to these folks to whom Senator Gramm is going to send the money and ask them to make voluntary contributions so the Medicare system could go forward. I do not think that would work very well, probably. The problem, the fundamental question before us, is, How do we use these surpluses? I think the priorities of the American people are very clear. They have told us: Social Security, Medicare, education, health care, defense, and, yes, tax relief. Those are their priorities, and that is what this amendment represents.

Mr. CONRAD. Not on my time I will not yield.

Mr. CONRAD. It is all really a question of priorities. How should these surpluses be used? Our view is, the priorities of the American people are to safeguard Social Security, to safeguard Medicare, to provide for education and defense and health care, and also tax relief. The other side says there are only two priorities. They say the priorities with these surpluses are Social Security--and I commend them for that. But then they say virtually all the rest of the money ought to go for tax cuts. When you look at what they are proposing, the Senator from Texas was very clear. He likes across-the-board. The chairman of the Finance Committee has indicated he likes the 10 percent across-the-board. That is not fair. That is not fair. It is not the priorities of the American people. That is why this amendment is important.

Mr. CONRAD. No. Absolutely not. As I indicated, we are protecting Social Security by reserving every penny of the Social Security surplus. We are also reserving a substantial part of the non-Social Security surplus for Medicare. But that which remains, which is about $400 billion over the next 10 years, is available for high-priority domestic needs including education, health care and defense, and for tax relief.

Mr. CONRAD. That is roughly the calculation. It is hard to see that as fair.

Mr. CONRAD. I am happy to yield to the ranking member.

Mr. CONRAD. I do not think it would be the fairest. In fact, if you have a 10 percent across-the-board cut, the results are what I have shown here. For the top 1 percent, those whose income is over $800,000 a year, they get $20,000. The bottom 60 percent get, on average, relief of $99. Mr. LAUTENBERG addressed the Chair.

Mr. CONRAD

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

Mr. CONRAD. I thank the Chair, and I thank my colleague from Montana. This leaves sufficient resources for $400 billion over the next 10 years for high-priority domestic issues, like education and defense, as well as room for tax reduction. But, fundamentally, it puts Social Security and Medicare first.

Mr. CONRAD. I thank the Chair. Madam President, this amendment is very direct. It creates a lockbox to protect every dollar of Social Security surplus for Social Security. In addition, it creates a lockbox to add 40 percent of the non-Social Security surplus for Medicare. Medicare is in danger. It is on the brink of insolvency. It is time not only for reform of Medicare, but to add additional resources so the promise of Medicare can be kept. In addition, this amendment will pay down the debt by $300 billion more than the budget resolution alternative. I ask my colleagues to support this amendment to create a safe lockbox, not only for Social Security but for Medicare. That leaves sufficient resources----