Kent Conrad

Mr. CONRAD

Mr. CONRAD. I thank the Senator from Nebraska. In answer to my colleague from Pennsylvania, this is not the same old song. This is a balanced budget and one that does it without using or without counting Social Security trust funds. It is a significant breakthrough. We do it by less draconian cuts on the high-priority programs of education, Medicare, Medicaid, veterans, and many others. We are able to do that because we reject the tax reduction aimed and targeted primarily at the wealthiest among us, and we say there is no need to defend every tax preference, every tax loophole, every tax break that is in the current code. This chart shows it--$4 trillion of tax preferences over the next 7 years. We say let us limit the growth to inflation plus 1 percent. That saves us $228 billion. Now, my friends may be able to defend every tax preference, every tax break, every tax loophole. I am not. I do not understand the practice of allowing 73 percent of the foreign corporations doing business in this country to get by without paying one dime of tax. Those are not U.S. taxpayers. They are foreign taxpayers doing business here, and we allow 73 percent of them to get by without paying a penny. It makes no sense. I do not understand the practice of having a section 936 in the code that costs $57,000 for every job created in Puerto Rico under that section of the code. I think we could do away with that loophole, and overwhelmingly the people of this country would agree. I do not see any reason we should not say to the billionaires who renounce their U.S. citizenship to avoid taxes, that loophole should now be closed.

Mr. CONRAD. I thank the Chair.

Mr. CONRAD. We have more deficit reduction in the year 2002 than the Republicans.

Mr. CONRAD. We do have CBO scoring for the 7 years that indicate we will save $1.250 trillion. We will balance without using Social Security surpluses.

Mr. CONRAD. We have treated the $170 billion in the same way that the Republican resolution has treated it. In other words, only that money--

Mr. CONRAD. Am I to respond?

Mr. CONRAD. Mr. President, today we are engaged in a historic debate on our economic future. There are many of us on both sides of the aisle who are committed to balancing our budget. But a group of us have worked for a number of weeks on producing a plan that we call the Fair Share plan, because we believe the Republican alternative that has been presented does not call on all of our citizens on a fair basis to contribute to this effort. Perhaps the conservative commentator Kevin Phillips said it best when he said, ``If the budget deficit were really a national crisis we would be talking about shared sacrifice, with business, Wall Street and the rich, the people who have the big money, making the biggest sacrifice. Instead, the richest one or two percent, far from making sacrifices, actually get new benefits and tax reductions.'' [[Page S7321]] That does not strike some of us as fair. We believe everyone in this country ought to be asked to contribute to solving this budget problem. So we have created an alternative that we call the fair share balanced budget plan. It balances the budget by the year 2004 without counting the Social Security trust fund surpluses. The Republican plan claims to achieve balance by the year 2002, but they do that by counting Social Security trust fund surpluses. In fact, if you look at the Republican budget resolution you will find that they have a $113 billion budget deficit, when it is fairly stated, in the year 2002. We understand they do not achieve a balanced budget without counting Social Security surpluses until the year 2006. Our plan offers even more deficit reduction in the year 2002 than their plan. Without counting the Social Security surpluses, the Republicans have a $113 billion deficit in 2002, while the Fair Share plan has a $97 billion deficit, $16 billion less in deficit than the Republican plan. We freeze defense spending, like the Republican plan does. We freeze nondefense discretionary spending while the Republicans cut it $190 billion below a freeze. In other words, we have frozen both defense spending and nondefense discretionary spending for 7 years in our plan. In the Republican plan, they have cut, on domestic discretionary spending, $190 billion below freeze. That means the high- priority areas of the budget are devastated under the Republican plan: Education, infrastructure, research and development, technology. We add back $47 billion to education. We add back $54 billion to infrastructure, and some $13 billion to R&D and technology because those are the keys to America's future. We also cut other important priorities less than the Republican plan. We restore $100 billion of the $256 billion Republicans cut in Medicaid. We have full funding for student loans, some $14 billion. We restore $24 billion of the $46 billion the Republicans cut in nutrition and agriculture. We restore $60 billion of the $86 billion cut in income assistance in the Republican plan. And we restore $5 billion of the $10 billion Republicans cut in veterans benefits. To fund these changes we reject the Republican tax cuts targeted at the wealthy. The fair share plan eliminates $170 billion reserved in the Republican plans for tax cuts targeted primarily for the wealthy. We also ask the wealthiest among us to contribute to a balanced budget by limiting the growth of tax breaks, tax loopholes and tax benefits, tax preferences that benefit the wealthy and the big corporations. Tax entitlements are the largest entitlement in dollar terms and the third fastest growing major area of the Federal budget. The Republican budget plan lets these tax loopholes and tax preferences grow without discipline, at twice the rate of overall Federal spending. Our plan limits the growth in tax entitlements to inflation plus 1 percent, producing $228 billion in savings over 7 years. We are simply saying, as the Republicans have argued, that entitlement growth ought to be limited. We agree. But we do not think we should forget the biggest entitlement of them all, the tax preferences, tax benefits, tax loopholes that go to those who have the most in our society. Let us ask everyone in our country to contribute to an effort to reduce the deficit and let us ask them to contribute on a fair basis. I reserve the remainder of my time.

Mr. CONRAD

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

Mr. CONRAD. Mr. President, I ask unanimous consent that we go into a quorum call and that both sides be charged equally.

Mr. CONRAD

Mr. CONRAD. I thank the Chair. (The remarks of Mr. Conrad pertaining to the introduction of S. 840 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank the Chair and I thank my distinguished colleague from Nebraska for securing this time and I thank the distinguished Republican manager of the bill, the Senator from New Mexico, for his graciousness in allowing me at this time to introduce a bill which I will send to the desk. This bill is a major welfare reform piece of legislation and I ask that it be printed, but not in the Record. I want to make that clear: I am not asking it to be printed in the Record, so we can save the taxpayers some money. But I am introducing a bill to dramatically revamp the welfare system in this country. I call it the Work and Gainful Employment Act. The WAGE Act significantly reforms our welfare system while protecting the children of America against an abdication of Federal responsibility. I offer an innovative approach to reforming welfare that is based on four principles: work, protecting children, State flexibility, and family. The WAGE Act is designed foremost to put welfare recipients to work and to make welfare recipients self- sufficient. Under my plan, States receive unprecedented flexibility to experiment in developing new methods for moving welfare recipients into work. The WAGE Act retains a safety net for children and an automatic stabilizer for States. Mr. President, Americans overwhelmingly agree that the current welfare system does not work; it does not move recipients from dependency to work and self-sufficiency. Welfare undermines the basic values of our country--work, family, self-sufficiency, and personal responsibility--and sends a detrimental message to children that welfare can be a permanent way of life. The WAGE Act is a departure from the status quo. The current system focuses on writing checks and does little to promote work and self- sufficiency. States are overburdened by extensive Federal regulations that impede their ability to enact innovative and creative approaches to moving individuals off of welfare. The worst part of welfare is the message sent to children--that if their parents do nothing, the government will send them a check. We have no choice but to revamp and reengineer welfare from the ground up. The WAGE Act ends welfare as we know it. In its place, States are given [[Page S7128]] the flexibility to design work programs that do one thing--move parents into the work force. But the WAGE Act does not just let States take the money and run. It is based on the principle that those who raise the money should have some say in how it is spent. But it discards the micromanagement of the past. The WAGE Act has four themes: First, work. From the day that a parent sets foot in a welfare office, we will expect that person to work or to demonstrate progress toward self-sufficiency. Second, State flexibility. States will have a wide latitude to design effective work programs under a new work and gainful employment block grant. The WAGE block grant will also provide incentives for moving parents into the work force. Third, profamily. Families that stay together and play by the rules will be supported in their efforts to be self-sufficient. For children in divorced and never-married families, both parents will be expected to provide financial support through extensive and tough new child support enforcement measures. Fourth, protects children. A transitional aid program will replace AFDC and provide cash assistance to families with children. States will have broad flexibility to determine eligibility and to set benefit levels and time limits. Teen parents will be required to stay in school and to live with their parents or in adult-supervised living arrangements. Under my proposal, the transitional aid program will be a cooperative Federal-State effort, with the Federal Government providing matching funds to States. However, unlike AFDC, it will emphasize the need for participants to work or prepare themselves for work. The WAGE block grant will provide States with the means to move welfare recipients into work. The WAGE Act will save money and reform the welfare system without resorting to the free-for-all of AFDC block grants that does little to hold States accountable and that puts America's children at great risk. While there are savings to be realized in ending welfare inefficiencies, I hope the Senate's deliberations will emphasize first and foremost that welfare reform is not an experiment to be tested on America's poor children. The House bill allows States to count people as working who are kicked off the rolls. Mr. President, what could be more absurd than to say that people are working who have just been eliminated from the welfare rolls? You can be eliminated from the welfare rolls and not working, and we should not count people as working who are not. Real welfare reform is about solving the problem of transitioning parents into the work force, not the streets. The person most affected by our deliberations are America's children. I hope that our efforts will focus on supporting and enabling their parents to be self-sufficient. That is the only approach that will ensure that we are responsible to the next generation. Mr. President, let me end as I began. This new welfare reform proposal emphasizes four principles: work, State flexibility, families, and protecting children. I think those ought to be the principles that underlie any reform of our welfare system.

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to introduce the Children's SSI Eligibility Reform Act. As my colleagues know, the welfare reform bill passed by the House of Representatives attempted to address criticisms that have been leveled against the SSI program. But the House went too far. SSI is the program of last resort for 850,000 children with severe disabilities who live in low income families. The cash assistance provided to these children's families enables them to meet the added costs the disability imposes on the family--whether those costs result from necessary modifications to the home; day care for siblings while the child in question receives therapy; basic necessities like food, shelter, clothing and utilities; transportation expenses in making frequent trips to a therapist or hospital; or the cost of foregoing one parent's income in order to care for a child with a disability. SSI also provides for the basic necessities of low income families, in order to maximize the likelihood that a child with a disability can remain at home. But the SSI program is not without its faults. SSI as it relates to children has been poorly defined since its inception. There is concern that children who are not sufficiently disabled to merit assistance are making their way onto the SSI rolls. There have been allegations that some parents have coached their children to feign a disability in order to obtain benefits. And there is concern that SSI does nothing to promote the improvement of those children with disabilities who could improve with proper assistance. Because of these issues and my concern that the House enacted an ill- conceived, sweeping proposal with insufficient data on its impact, I convened a series of psychiatric and disability experts to help me develop the Children's SSI Eligibility Reform Act. And I am extremely pleased that Senators Chafee, Jeffords and Bradley have joined me in this effort. This is a bipartisan issue. Republicans and Democrats alike want to do the right thing when it comes to severely disabled children. That's why we should make every effort to repair the defects in the SSI program, but do so in a way that protects children with severe disabilities. The House of Representatives, out of frustration with repeated reports of abuse under the program, went too far. The House wiped out the Individualized Functional Assessment that was developed to protect children with disabilities after the Supreme Court's Zebley decision. And as a result, the vast majority of the 250,000 children who currently receive SSI by virtue of the assessment would lose all benefits--both SSI cash benefits and Medicaid. The proposal Senator Chafee, Senator Jeffords, Senator Bradley and I are introducing, on the other hand, takes a surgical approach to improving SSI. It targets the problems, not the kids. But none of us can pretend that SSI reform will not eliminate some children from the rolls. Obviously, it will. Given that fact, our goal should be to remove those who should not be on the program in the first place. In order to accomplish this, our proposal takes several approaches. First, it clarifies the purpose of the program, which critics argue was never sufficiently defined. It ensures that the purpose of SSI is not only covering the additional costs of caring for children with disabilities and maintaining them at home, but also providing basic necessities and enhancing the opportunity for these children to develop into independent adults. Second, our proposal modifies SSI's medical listings and Individualized Functional Assessment to ensure that only children with severe disabilities are drawing SSI benefits. This is not a modification I take lightly. Members of Congress, for the most part, must acknowledge our ignorance in making clinical diagnoses relating to mental illness and other disabilities. Any modifications we make to the diagnostic tools of clinicians should respect both what we know and do not know, so we do not harm innocent children. Therefore, while our proposal modifies the medical listings and increases the level of severity required under the Individualized Functional Assessment, it also requires an evaluation of these changes by the Social Security Administration. Mr. Chairman, much attention has been paid in this debate to children with mental disorders, and the degree to which they should be eligible for SSI. I think we need to be very careful to avoid denying eligibility to someone who doesn't look disabled. And as much as we must reform this program decisions based only on anecdotal evidence. A child who may not ``look'' disabled to the average person may suffer from a severe disability that is just as costly for the family as a physically disabled child. Let me give you an example from North Dakota. The mother of a 6-year- old child named Garrett recently visited my office. When Garrett was 4, he was diagnosed with attention deficit hyperactivity disorder--ADHD. A medication was prescribed for him after he experienced a series of seizures. But the medication caused brain damage which has deprived Garrett of the ability to control his negative emotions. Because Garrett has no neurological control, he is incapable of exercising choice in his actions and requires constant supervision. Garrett's aggressive disorders have resulted in harm to himself, the members of his family, and their home. SSI not only has enabled the family to make household repairs when Garrett has damaged the house, but also to pay for day care for their younger daughter when Garrett's mother has had to take him to therapy. There is no day care for a youngster like Garrett. Garrett is just one example of the kind of child who should not be removed from SSI. I am hopeful that this Congress will see fit to take a balanced approach to this issue to ensure that we clean up this program in a way that is tough, honest and fair. Mr. President, in addition to making the changes to SSI that I have already mentioned, our proposal also: Increases the use of standardized tests to make it virtually impossible for anyone to feign a disability; Expands and better targets SSI continuing disability reviews; Expands civil penalties for those who coach children to act inappropriately in order to receive benefits; Graduates the level of benefits that families receive when they have more than one child on SSI; Changes the SSI policy regarding retroactive lump sum benefits; Requires parents to demonstrate that they have sought appropriate treatment to alleviate their child's disability; and several other important provisions. Mr. President, while a great deal of time and effort has gone into developing this legislation, I would be the first to acknowledge that there may be room for improvement. For example, the Slattery Commission on Childhood Disability appears ready to recommend that Medicaid coverage continue for children who leave SSI because their condition improves, but need continued medical assistance to ensure their condition does not worsen. Although this provision is not in our bill, I believe it is one the Congress should consider. I also want to call to my colleagues' attention a new report by the National Academy of Social Insurance entitled ``Restructuring the SSI Disability Program for Children and Adolescents.'' The Academy's study, conducted by a nonpartisan group of national experts, is an extremely thoughtful and comprehensive analysis of the approach Congress should take to reform SSI. And it contains many parallels to the legislation we are introducing today. The report recommends strengthening eligibility criteria, preserving the cash benefit, graduating the amount of benefits families receive when they have more than one child on SSI, encouraging measures to foster independence among those youngsters who can become independent, and several other items. Mr. President, I ask unanimous consent that additional material be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank the Chair and thank my colleague. I would like to speak just briefly on the PMA matter and then speak on another issue as well. With respect to the PMA matter, I salute my colleagues who have come to the floor to oppose the sale of PMA's. Let me say I believe sale of the Power Marketing Administrations represents a very bad idea. It is bad for rural America. It represents bad faith. It is bad economics and it is bad policy. This would have a very serious impact on rural America. In my State we would see an increase in rates of up to 60 percent; 240,000 customers in North Dakota would be adversely affected. Those rural customers are already paying rates that are 15 to 40 percent higher than city customers. The reason for that, of course, is very obvious. There is much less of a load per mile in rural areas than in city areas, so the costs are higher. Mr. President, this would be a very serious matter for rural America. It also represents bad faith. The Government made a deal. The deal was this power was going to go to help rural America. That is precisely why the Federal Government entered into this enterprise. Preference power, it should be emphasized, is not a subsidy. These facilities are being repaid with interest. I believe the sale also represents bad economics. Selling the PMA's would be a one-time shot. It does not reduce the deficit because their own budget rules say you cannot sell assets to reduce the deficit. So, Mr. President, selling these facilities forgo decades of steady income. Finally, I believe the PMA sale represents bad policy. These dams serve multiple purposes. No private entity can balance the interests of power production with flood control, navigation, water supply, and wildlife values. Mr. President, for those reasons I oppose the sale of the PMA's.

Mr. CONRAD

Mr. CONRAD. Mr. President, today is May 3. I think it is time to start asking the question of our colleagues on the other side, where is the budget? Where is the budget? We are supposed to have completed action on the budget in the Budget Committee by April 1. Today is May 3. We still do not see a budget. I am on the Budget Committee. I still do not know when we are even going to start to work on the budget. Mr. President, I must say I am somewhat surprised because our friends on the other side of the aisle had a budget before the election. They told the American people that they had a budget plan. They said they could cut taxes, they said they could increase defense spending, and they said they could balance the budget. But now that they have assumed power and assumed control and assumed authority, there is no budget. Mr. President, it is amazing the difference an election makes. Before the election there was this plan. They had the Contract With America. They told everybody they had this miracle. It was not going to reveal the details but a miracle plan that was going to allow them to cut taxes dramatically, increase defense spending, and balance the budget. Now that they are in power their plan is missing in action. Maybe it is because the plan just does not add up. This chart shows what we would need to do to balance the budget over the next 7 years. We would have to have a reduction in spending of $1.2 trillion to begin with. Then if we were going to be true to the promise we have made to Social Security recipients, they would have to cover the $636 billion in Social Security surpluses that are going to be generated during that 7-year period. So now the hole to fill in is $1.8 trillion--not million, not billion, but trillion dollars. That is real money even in Washington talk. On top of that, of course, we are going to have to cover the massive tax cuts that the House has passed, $345 billion of tax cuts over the 7-year period. So that is the hole that we have to fill in, $2.2 trillion. Unfortunately, before they ever started to fill in this hole, they dug the hole deeper by passing these massive tax cuts. Let us see what they have produced so far by way of proposals to narrow the gap between the $2.2 trillion we need, and what they have actual done so far over in the House in terms of proposal. They are down here at a measly, anemic, $485 billion. Mr. President, I would say our friends on the other side of the aisle have a credibility gap that is opening up here. In fact, it is more than a gap. It is a chasm. They are $1.6 trillion short. No wonder we do not see a budget out here. No wonder they have blown the deadline. No wonder they have not even started in the Budget Committee and they were supposed to be completed a month ago. It is amazing. During the balanced budget amendment debate there was a rush to amend the Constitution to balance the budget. Boy, that was priority No. 1. But now when it comes time to actually do something to balance the budget, because of course, a balanced budget amendment will not cut one dime, will not add one dime of revenue, will not narrow the deficit by a dollar--now, when it comes time to actually present a budget, to actually do something about the deficit, the budget plan is nowhere to be found. This just does not add up. It does not add up, and not surprisingly our colleagues on the other side are more focused on a tax cut for the wealthiest among us than presenting a plan to reduce the deficit. It is very interesting. If you look at who benefits from the Republican tax bill, what one finds is if you are a family of four earning over $200,000 a year, you get an $11,000 tax cut. If you are a family of four earning $30,000 a year, you get $124. So the idea of our friends on the other side is to target tax relief in this country by giving 100 times as much to those earning over $200,000 a year than those earning $30,000 a year, and they call this middle-class tax relief. It is an interesting concept of the middle class. Mr. President, we have seen this plan before. We have seen it all before--back in the 1980's. If we look back at that time, we see what happens to the middle class. Do they benefit from this kind of plan to give big tax cuts to the wealthiest among us and explode the deficit? No. We can look back and see what happened in the 1980's. The top 1 percent saw 62 percent of the wealth growth go to them. The top 1 percent got 62 percent of the wealth growth in that period. The 80 percent at the bottom saw their wealth growth of 1.2 percent. That is trickle-down economics. What we have learned is that wealth does not trickle down. It gets sucked up. The wealthiest 1 percent get all the benefits. Mr. President, let me just conclude by saying our friends on the other side have got to come up with a budget. Then we are going to see the gap between rhetoric and reality. I thank the Chair. I yield the floor. Several Senators addressed the Chair.

Mr. CONRAD

Mr. CONRAD. Mr. President, I would like to speak for just a moment on this PMA matter and then direct my attention to another issue. Who controls time?

Mr. CONRAD

Mr. CONRAD. I thank the Chair.

Mr. CONRAD. Mr. President, I ask unanimous consent that I be able to proceed for 15 minutes.

Mr. CONRAD

Mr. CONRAD. Mr. President, this week does mark the final action in the House of Representatives on the so-called Contract With America. This week, there will be all kinds of analysis of what the Contract With America has meant, and I wanted the chance to take stock and share my view as people comment on the first 100 days of the so-called Contract With America. Let me say, as I said in a speech in January, there are some parts of the contract that are good, some parts of the contract that I strongly support. In fact, we already have two parts of it that have become law--the Congressional Accountability Act that will apply to Members of Congress the laws that apply to everyone else. I support it. We tried to get it passed last year. It is now the law of the land. That is positive; and the unfunded mandates bill, which will make it more difficult for the Federal Government to send orders out to the States to fund something that we deem necessary and appropriate. That had gone too far. We have reined it in through legislation that is now also the law of the land. Those are both positive things, in my view. When we turn to the fiscal side of the House, when we look at how the Contract With America impacts the long-term economic health of America, quite a different picture emerges. Very frankly, the numbers just do not add up. The proponents of the contract have said they are going to balance the budget; they are going to cut taxes; they are going to increase defense spending, and it is all going to work. Mr. President, we heard that same old song back in the 1980's, when the Republicans captured control of the Senate, they had the White House, and they told us they could cut taxes dramatically, increase defense spending, and balance the budget. What happened? Well, they cut taxes. They increased defense spending, but the deficit and the debt of this country exploded. And now, Mr. President, we are seeing a repeat of that tragic, tragic economic policy for this country. Now we are seeing a repeat, deja voodoo. We saw the economic policy of the 1980's referred to as voodoo economics, and indeed it was because it told the American people, when we already had a deficit, that we could cut taxes, raise defense spending and somehow it would all add up. It did not add up then, it is not going to add up now, and we ought not to repeat that experience. national debt in this country. Now we are faced with a circumstance in which we see the same sold economic nostrums peddled to us once again. Mr. President, I think it helps if we look at what is our current circumstance. This chart shows what it would take to balance the budget over the next 7 years. What are the cuts necessary to balance the budget if we do nothing to make the problem worse before we begin to solve it? This chart shows it would take $1.2 trillion of cuts over the next 7 years to balance the budget. Mr. President, unfortunately, our friends in the Contract With America, before beginning to solve this problem, have taken the first steps which are to make it worse. It makes no sense. Just this week, they passed in the House tax cuts of $345 over the next 7 years. So instead of starting by reducing the deficit, they have started by digging the hole deeper instead of starting by filling in the hole. Mr. President, this chart shows on top of the $1.2 trillion of cuts necessary to balance the budget over the next 7 years, our colleagues in the House have added $345 billion of tax cuts over that period, so now we have a hole that is $1.555 billion. Mr. President, one might ask: Where are the spending cuts from our friends in the House of Representatives, from those who are advocates of the Contract With America, where are the spending cuts to match the problem that we have of balancing the budget over the next 7 years? Mr. President, here is what they have come up with so far, $485 billion--$485 billion of cuts matched up against the need of $1.54 trillion necessary to balance the budget over the next 7 years. Unfortunately, the full picture is even more serious. Let us just go to the next chart because the charts I have shown before this one assume we are going to take Social Security trust fund surpluses to reduce the size of the deficit over this next 7 years. If instead we were to balance the budget honestly and not be raiding Social Security trust funds to balance the budget, what we find is instead of a $1.5 trillion hole to fill, we have a $2.2 trillion hole to fill. We have the $1.2 trillion of spending cuts necessary to balance the budget over the next 7 years, we have $636 billion of Social Security trust fund surpluses that will be generated over that period, and now because of House action we have the $345 billion of tax cuts that they have passed. To balance the budget honestly over the next 7 years we would need a whopping total of $2.191 trillion. Mr. President, again, let us see what they have done with the Contract With America in terms of meeting that need. We need nearly $2.2 trillion of cuts. They have come up with $485 billion so far. That looks to me like a $1.6 trillion gap. Our friends with the Contract With America have a $1.6 trillion--not million, not billion--$1.6 trillion credibility gap with the people of America, because if we are going to honestly balance the budget, we are going to close the gap between spending and revenue over the next 7 years, that takes $1.2 trillion. If we are not going to use Social Security surpluses, that is another $636 billion, and now they have stacked on top of that $345 billion in additional tax cuts--nearly $2.2 trillion necessary to balance the budget over the next 7 years and they have come up with a measly $485 billion of cuts. Mr. President, they are not getting the job done. Now, if we look at the spending over the next 7 years, the projection is that we will spend $13.2 trillion over the next 7 years. Remember, we need now, based on the action they have taken over in the House, to save $2.2 trillion. We are intending to spend $13.2 trillion over that period of time. Well, that looks like a manageable thing to do. Look at where the money is going. Interest on the debt, over $2 trillion. In fact, we are going to spend more on interest on the debt over the next 7 years than we are going to spend on the national defense. We are going to spend $2.072 trillion on defense. We are going to spend $2.082 trillion on the interest on the debt. What are the other big areas of spending? Well, Social Security is the biggest--$2.894 trillion on Social Security. We have Medicare, $1.847 trillion over the next 7 years; Medicaid, $962 billion. So those are real, the big pots of money. And domestic discretionary spending, just over $2 trillion. Those are the big pots--Social Security, interest on the debt, defense, Medicaid, Medicare, and domestic discretionary spending. In fact, one of the interesting things you find is in just five areas on the budget, we are spending 75 percent of the money--Social Security, interest on the debt, defense, Medicare, and Medicaid. But our friends have said, well, there are parts of this that we cannot touch. Obviously, you cannot cut interest on the debt. That is owed. We have to pay that. That is $2 trillion over the next 7 years. So that is off the table. In addition, our friends have said Social Security is off the table. We are not going to touch that, because that is the most fundamental contract with America. We have taken taxes from people in order to assure that they receive the benefits they have been promised. That is $2.9 trillion over the next 7 years. That is off the table. In addition, in the Contract With America, they have said we are not going to touch defense. It is off the table. That is over $2 trillion over the next 7 years. In fact, they say we ought to increase defense spending. Well, when you take Social Security, interest on the debt, and defense off the table, you have to achieve those $2 trillion of savings out of about $6.2 trillion of spending, because we have taken half of the budget off the table. Mr. President, that means we would have to cut everything that is left by a third in order to achieve the savings. Everything else would have to be cut by a third. I do not think that makes much sense--cut the highway program in this country by a third; cut veterans benefits by a third, after we made a solemn promise and pledge to them; cut education by a third; cut every nutrition program; every program to make this country a better place, cut them all by a third. Mr. President, there has to be a better way of going about this. The Contract With America so far is certainly not delivering on its promise to make the economic lives of Americans better. One of the most disturbing aspects of what has been done is to look at how they have targeted the tax benefits. Because, let us be frank, they have targeted the tax benefits right at the richest, wealthiest people in this country. They have said to those who are at the top, ``You get the lion's share of benefits.'' And they have said to everybody else, ``You get the scraps.'' Mr. President, let me just make this clear. We have had 100 days of the Contract With America, and the tax plan that they have passed gives 100 times the benefits to somebody earning over $200,000 as it gives to a family earning $30,000. If you are earning over $200,000 in America today, you get an $11,200 tax cut under what they have done in the other House under the Contract With America. If you earn over $200,000, you get an $11,200 tax cut. If you are a family earning $30,000, you get a $124 tax cut. That is nearly 100 times as much going to those earning $200,000 as to those earning $30,000. This is their idea of tax equity. This is their idea of fairness. This is their idea of somehow making America better. Mr. President, this is the same old trickle-down economics that we have seen before. It is great if you make a lot of money, but it does not do much for you if you are in the middle income in this country. Frankly, the middle-income taxpayer will really pick up the tab, because we know what happened in the 1980's with this economic theory. The debt exploded, the deficits exploded, and interest rates exploded and, as a result, the things that cost middle Americans money--home mortgage, college tuition--all of those things skyrocketed. So they get a $124 tax reduction. They will get many times that in increased expenses because of increased interest rates. Mr. President, this shows the Republican contract. Fifty-two percent of the proposed tax cuts go to the top 12 percent of our population. Taxpayers with incomes of less than $100,000, 48 percent with incomes of less than $100,000. The 12 percent at the top, those earning more than $100,000, they get 52 percent of the benefits. Again, I think a lot of people wonder: Gee, how is it? I read that in this Contract With America, they had a $500 tax credit for children. How could it be that a family earning $30,000 a year only gets $124 of benefit? Well, you know why that is true, Mr. President? Because they have played a little trick. They played a little trick in this tax plan. They did not make that credit refundable. And so if you look at what people are paying now and the tax relief they will get, you find that it is a big hoax; it is a big trick. A family earning $30,000 gets $124 of benefits. Those with $200,000 of income get $11,000 of benefit. That is fair? I do not think so. I do not think that is what the American people had in mind when they were told there was this Contract With America. I do not think they had in mind, when they talk about a 50-percent cut in the capital gains tax, that 75 percent of the benefit goes to the top 12 percent in this country; and that the other 88 percent of the people in this country get 25 percent of the benefit. I do not think that is what they had in mind. Mr. President, this last chart shows what is happening to the deficit. I thought under the Contract With America, they were going to balance the budget. But let us look at, after the enactment of the Contract With America, what is happening with the deficit. Do you know what one finds? The deficit is going up. The deficit is not going down. The deficit is going up. I thought with this Contract With America, they were going to be reducing the deficit. I thought they were going to be moving toward a balanced budget. They have now passed the whole Contract With America and the deficit is going up. What happened? What happened? They said in this Contract With America that they were going to reduce the deficits, reduce the debt, and balance the budget. But after the Contract With America is passed, the deficit is not going down, the deficit is going up. It is because the same old voodoo economics does not add up. It does not add up. Mr. President, this is going to be pretty sobering for the American people to find out that they put their trust in something and, once again, they are disappointed. It is time for us to honor the most basic Contract With America, the pledge we took to uphold and defend the Constitution of the United States. That is the real Contract With America that every Member of the House and the Senate have. And we have a duty and an obligation to secure the economic future of this country--a duty and an obligation. We ought to move immediately upon our return to balance the budget of this country, to do it in an honest way without raiding Social Security trust funds and to secure a future for our children that is as full of promise and hope as what was turned over to us by previous generations. Mr. President, I think the Contract With America has some good points--congressional accountability, the notion that we are no longer going to put off responsibilities on States that are beyond their ability to pay for. But this economic game plan is bankrupt. It does not add up. It is not fair, and it must be rejected. Then we must turn in a bipartisan way to doing what we all know must be done: to get our fiscal house in order, to get America back on track and to create economic opportunity for the people that we all represent. I thank the Chair and yield the floor. I suggest the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. I was just downstairs, Mr. President, doing a satellite feed to a group back home. The group was a group of REA members. I heard that Judge Heflin had decided not to run for reelection. My first thought was, ``What an incredible loss for this Senate. What an incredible loss for the country, and what an incredible loss for the rural electrics.'' I thought this is really appropriate that I am talking to a rural electric group when I find out that Judge Heflin has decided not to run again, because Howell Heflin has been a champion for rural electric. He has been a champion for the little guy. He has been a champion for the farmers. He has been a champion for rural people. All of that has flowed from a real commitment to the people that he represents. I was thinking of the remarkable career of Howell Heflin, chief justice of the Alabama Supreme Court for 6 years; somebody who was selected in 1975 as the finest appellate judge in the entire United States; somebody who came to the U.S. Senate and became known as the spokesman for southern agriculture. Let me just say that was deserved because I serve on the Agriculture Committee with Howell Heflin. Nobody is a more determined spokesman, a more effective spokesman, or someone for whom his colleagues have more respect than the man I always call Judge Heflin. When he spoke about a matter that was important to his constituency, we all listened. And we listened because he presented his case in terms of substance but also with a sense of humor. I think of so many times he brought a smile to my face on that committee. I can remember the time we were talking about drought aid. Different commodities were being considered. After we had pretty well completed the package, Howell Heflin raised his hand and said, ``Mr. Chairman, what about peaches?" Well, no one had thought about peaches. We were not going to include peaches in that package, but after Howell finished, we included peaches, and we did it because Howell Heflin convinced members it was the right thing to do. How many times he convinced members that what he was advocating was the right thing to do. Mr. President, to me it is a real sense of loss that brings me to the floor, because Howell Heflin has not only been somebody I teamed up with on things that I thought were important to the people I represent, but I also believe that Howell Heflin is really the best kind of elected representative. He cares deeply about doing a good job of representing the people that sent him here. He always has that great air of integrity and fairness. I remember when he was chairman of the Ethics Committee and handled some of the most difficult cases that have ever come before this body. I do not think there was a Member in this Chamber who did not know that Howell Heflin was going to treat people fairly. Whether they were on the other side of the aisle or on this side of the aisle, Howell Heflin would treat them fairly. He would treat them equally. We are going to miss Howell Heflin, a real champion for the people of Alabama and a real champion for the people of America. Howell, I do not know anybody in this body who deserves a good retirement more than you and Mike do. But I must say you will be missed in the U.S. Senate. I thank the Chair. I yield the floor. Mr. SHELBY addressed the Chair.

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank the Senator from New York for his courtesy, and I thank my colleague from North Dakota for his discussion of the latest Krauthammer column. Let me just say that it is very apparent to me why Mr. Krauthammer is a columnist and not an accountant, because he clearly does not get it. He just does not understand why it is wrong to take Social Security trust fund moneys to balance the Federal operating budget. He does not understand why it is wrong to take a dedicated trust fund and use it to pay the other operating expenses of Government. But most people understand why that is wrong. Most people understand that you do not take a trust fund and loot it in order to pay other expenses and then say you have balanced the budget. Mr. Krauthammer, in his latest work, indicates that the balanced budget amendment is ``entirely silent on the issue.'' The issue he is talking operating expenses of Government. It makes me wonder if Mr. Krauthammer has ever read the amendment that was before this body. I brought along just one section of the balanced budget amendment that was before this Chamber. It says very clearly. ``Total receipts shall include all receipts of the United States Government * * * total outlays shall include all outlays of the United States Government.'' By definition, this amendment was including the Social Security funds because they are receipts of the U.S. Government. And, of course, Social Security is not contributing to the deficit. Social Security is in surplus. So, by definition, Social Security surplus moneys would have been used, and used to balance the operating budget of the Federal Government. And those surpluses would have been used to pay other expenses. That is precisely the point. Mr. President, to say you are balancing the budget when you are using trust fund moneys is a fraud. It reminds me of the Reverend Jim Bakker. Do you remember Rev. Jim Bakker, Jim and Tammy, that used to have the show ``PTL'' on television? He was an evangelist, a television evangelist. Does anyone know where he has been for the last several years? He has been in a Federal facility in Minnesota. He has been in a Federal jail. He has been there because he raised money for one purpose and used it for another, and that is called fraud. That is precisely what is happening with the Social Security trust funds. We are taking money from people's paychecks. We are telling them that is going to be used to secure their retirement. We are taking that money and the part that is in surplus is being used to pay for other operating expenses of Government. The trust fund? There is no money in the trust fund. IOU's are in the trust fund, but there is no money there because we have spent it. We are as guilty of fraud as Rev. Jim Bakker. And at some point the chickens are going to come home to roost in this country. To have put that kind of flawed policy in the Constitution of the United States would have been a profound mistake because then we would have had very little chance to change it. Let me give an example of what is wrong with the Krauthammer thinking. Let us take a company that is earning $1 million a year, has $1 million of income but is spending $1.5 million a year. That company is experiencing losses of $500,000. Now, of course, it could borrow from the retirement funds of its employees and say that it is balancing the budget. That is the kind of approach that apparently Mr. Krauthammer would endorse. I do not think many people in this country would think, if you were earning $1 million a year as a company and were spending $1.5 million, and you were making up the difference by looting the trust fund of your employees, you would balance the budget. But that is the policy that he endorses. That is the policy Mr. Krauthammer thinks makes sense. I think most people would recognize you may have balanced cash against cash, but you have run up a $500,000 liability. You owe it, and you are going to have to pay it back or you are going to renege on your obligation. Mr. President, that is what is wrong with the approach we are taking. That is what is wrong with what we would have done if we would have put that principle into the Constitution of the United States. Mr. Krauthammer apparently belongs to the school of thought which believes that in order to save Social Security we must loot the Social Security trust funds. I do not belong to that school of thought. I think that is a profound mistake. Mr. Krauthammer has one thing right. One of the threats to Social Security is the debt that we are accumulating in this country. When we spend more than we take in, we are mortgaging the long-term future of this country--no question about it. That is a threat to Social Security just as it is a threat to the economic security of the United States. There is a second threat. The second threat to Social Security is the raiding of the Social Security trust funds. The reason we are running a surplus now, and the reason we are going to be running surpluses for the next 10 or 15 years is to prepare for the day the baby boom generation retires. That generation, which is twice as large in terms of people who are eligible to receive Social Security as the current generation, is going to put enormous pressure on the system. When we changed the Social Security methodology in 1983, we changed it in order to prepare for the day when the baby boom generation retires. That is why we are running surpluses. That is why those surpluses ought to be preserved. The notion that the only way to save Social Security is to loot its trust funds is mere nonsense. That is the position Mr. Krauthammer endorses. I think he is entirely wrong in that proposition. I think the people of this country have the common sense to reject that theory. I think by all of the reaction we have received from the balanced budget amendment debate the people of this country recognize we are on a course that cannot be sustained. It ought to be changed. Mr. Krauthammer might want to be a guardian at the gate of the gridlock of the past, the policies of the past. Senator Dorgan and I do not choose to join him in that endeavor. We do not think defending the policies of the past is defensible. There ought to be a change. To have enshrined those failed policies in the Constitution of the United States would have been an insult to the Framers of that document who put together, after all, a method of operating for this Government that has made us the envy of the world. That document has made this Nation the greatest country in human history. We should not tamper with it lightly. We certainly should not enshrine in it a flawed policy, one that says you have balanced the budget when you have looted trust funds in order to do so. That is not a policy that belongs in the Constitution of the United States. I thank the Chair. I yield the floor.

Mr. CONRAD. Ten minutes.

Mr. CONRAD. Mr. President, I want to thank my colleague from North Dakota.

Mr. CONRAD

Mr. CONRAD. So the Senator is asserting that only the increase in these appropriated entitlements could be subject to Presidential veto?

Mr. CONRAD. I just say, in conclusion, it seems to me it does not make much sense.

Mr. CONRAD. And yet we cannot veto the capital gains tax cut? The President cannot veto the capital gains tax cut?