Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise this evening to urge the White House to back away from their threats to veto the farm bill that is presently before the body. I think the White House would be much better advised to wait until congressional debate has concluded before making any final judgments on this bill. In fairness, it should be pointed out the veto threat that came out of the White House today was not from the President. It is very interesting what did come out. This is the staff of the President saying, if the farm bill were sent to the President's desk, they would recommend to the President that he veto the bill. Now, all of us know the dance that goes on in Washington on major legislation, and we all know this is negotiating leverage for the conference committee to come when the differences are worked out between the House and the Senate. So that is what is really going on. The fact is, this farm bill is fiscally responsible. It helps our Nation's farmers and ranchers. It promotes new sources of energy, reduces our dependence on foreign oil, enhances conservation, and improves nutrition. But it does it in a way that is paid for and is within the budget. I saw that some administration sources were asserting that there is somehow $36 billion of extra money in this bill. That is truly a concoction, $36 billion. Let's be clear. This bill costs $288 billion. The baseline is $280 billion. In other words, if we were just to have the same farm bill for the next 5 years as we have had for the past 6 years, it would cost $280 billion. This bill costs $288 billion. That is an $8 billion difference, not a $36 billion difference. Why do we have more money than the current farm bill? Because the world has changed. We are trying to adjust the farm bill to deal with the new reality. What is that new reality? There is an energy opportunity for America, and this farm bill attempts to seize that opportunity. What is the opportunity? It is the chance to reduce our dependence on foreign oil. Here are some key facts to remember about the bill. It is a 5-year bill. Its costs beyond 5 years will be determined in the next farm bill. So when the President's people take the 5 years of this farm bill and then extend it and look at its 10-year cost, that is not this bill. This bill is a 5-year bill. It is fully paid for. It complies with pay- go. It does not add one dime to the Nation's debt. In fact, it cuts commodity title payments by $7.5 billion over 5 years. Those are the provisions that have drawn the most fire. It tightens payment limitations and eliminates loopholes. Notably, it ends the three entity loophole that has allowed some operators to effectively double their Government payments, and it begins direct attribution, requiring that Government payments be directly attributed to an individual. The farm bill also keeps commodity program outlays which have been singled out for criticism in the media below CBO's August 2002 baseline, the baseline used in drafting the last farm bill. In other words, we can expect farm bill commodity program costs to remain below the level anticipated when the last farm bill was drafted. This is what the last farm bill projected would be the cost of continuing those provisions. That is the red line. Here is the projected cost of the new farm bill, far below what the estimates were when the last farm bill was written. In other words, if we look at commodity programs, those are actually only 14 percent of this farm bill, commodity programs, but it seems to be the area that draws the most controversy. But somebody apparently has not informed the administration or the White House that if you extend the Congressional Budget Office's baseline for commodity programs and compare it to this farm bill, this farm bill is well below what the last farm bill would have cost if it had just been simply extended. So there are real savings. Over the next 5 years we can see the total farm bill outlays, including baseline farm spending, and this new farm bill will make up only 1.9 percent of total Federal outlays. In other words, this is the current bill we are working on now. If you look at the total of Federal outlays, and you look at what this farm bill will cost, total cost is 1.9 percent of total projected Federal outlays during the period. The last farm bill was well over 2 percent. So as a share of Federal spending, agriculture's share is going down, and the commodity provisions that are so controversial are going down significantly. In the last farm bill, commodity programs cost less than 1 percent, three-quarters of 1 percent of total Federal spending. But in the new farm bill that will be down to one-quarter of 1 percent. Still people complain. My goodness, I do not think they have any idea what they are talking about. I really do not. The total farm bill has shrunk as a share of the total Federal budget. Commodity programs have shrunk dramatically as a share of the total Federal budget. It is worth noting that the cost of extending the 2001 and 2003 tax cuts dwarfs the funding in this farm bill. In fact, when shown on the same chart, the 2007 farm bill funding is barely visible. This farm bill funding is fully paid for. It is ironic that some of the same people who complain about the farm bill funding are calling for the far more expensive extension of the 2001 and 2003 tax cuts without paying for a dime of it. And they are trying to talk about being fiscally responsible. Look here. The President wants to extend the 2001 and 2003 tax cuts. Here is what that costs. Here is what extending the 2007 farm bill funding is. There is no comparison. There is just no comparison. So if we are talking about being fiscally responsible, let's get real. In addition, when I say this bill is paid for, it is just not my claim, this is the assessment of the Congressional Budget Office. They have analyzed the bill. They say it is fully paid for. In fact, they say: In the 5 years of the bill, there is a savings, when everything is taken into account--the spending, the offsets--that we have $61 million left over from 2008 to 2012, $61 million to the good. So there is not one penny added to the deficit or the debt as a result of this farm bill. The administration has claimed this farm bill includes tax increases. That is wrong. This bill does not include tax increases. It does include loophole closers that have very strong bipartisan support. For example, it would codify the economic substance doctrine prohibiting businesses from using certain tax avoidance schemes. It revokes tax benefits for leasing foreign subways and sewers. I know this is hard to believe, but there are actually companies and individuals who are reducing their U.S. taxes by buying foreign sewer systems, depreciating them on the books for U.S. tax purposes, and leasing those sewer systems back to the European cities that built them in the first place. Does anybody consider that a tax increase? I do not. I think it is cutting a tax loophole. It increases penalties for failure to file correct information returns, and it denies deductions for certain fines and penalties. I do not consider any of those tax increases. Let's go to the next slide because I want to rivet the point. One of the ways of paying for the farm bill, or at least a part of it, is to shut down this scam. This is a picture of a European sewer system. And you do have to wonder, what has a European sewer system got to do with the American farm bill? Well, one of the things we found is, some companies and some wealthy individuals are actually buying sewer systems in Europe, depreciating them on the books in the United States to reduce their tax burden, and then leasing them back to the cities that built them in the first place. Now, I know this sounds too fanciful to be true, but it is true. And it does not apply just to sewer systems. We have people who are doing this with European city halls. They are buying European city halls, depreciating them on their tax bills here, and then leasing them back to the European cities that built them in the first place. That is just a scam. So we are shutting down that scam. I do not think that is a tax increase. I think that is shutting down an abusive tax loophole. The fact is, we actually cut taxes in this bill. Here are the tax cuts that are provided: $7.3 billion for conservation, including a tax credit for farm land, and a conservation reserve program, $2.5 billion for energy initiatives, including a tax credit for small producers of cellulosic fuel, and $800 million for agriculture and rural areas. Tax relief. That is what is in this bill. Tax relief. But it is paid for. The entire bill is paid for. The administration has also complained that this bill contains sunsets. I would remind my colleagues this is a 5-year bill. And some of the programs, if we would extend them, would go on for more than 5 years. But we do not have unlimited means, so we have had to cut things off. What does that mean? That means when they write the next farm bill, those things are going to end unless somebody finds new money or savings to pay for them. That is how we always write legislation. We cannot determine what is going to happen 10 years from now. This is a 5-year farm bill. Over the 5 years, this is the point I want to make: This bill is fully paid for. There is no budget point of order against this bill. None. This bill fully complies with pay-go. The only difference between this bill and simply extending the current farm bill is we have added less than 3 percent for energy initiatives to reduce our dependance on foreign oil and for certain conservation measures to further protect our vital resources. Every dime of it is paid for. That is the fact. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I come to the floor today to speak in support of the Food and Energy Security Act of 2007. First, I thank the very able chairman of the Agriculture Committee, Senator Harkin, and the ranking member, Senator Chambliss, for their leadership on this bill. We wouldn't be here today without their leadership. I, for one, deeply appreciate the time and the effort they have poured into this bill. This has been months of determined effort to produce a consensus bill that can command a supermajority in the Senate. It certainly did in the committee. It passed without a dissenting vote. First, Chairman Harkin. I applaud his vision for a new direction for farm policy in America. Make no mistake, this is a very different farm bill because of Chairman Harkin's determination, leadership, and vision. This farm bill goes in a new direction with a much greater commitment to conservation, one that I think over time will prove to have been very wise, because we all know what is happening in the world. We have to do more through the conservation elements of the program in order to be sustainable over time. In addition to that, Chairman Harkin has played a lead role in creating a new option for farmers with the State Revenue Assurance Plan. Of course, he has been a champion for rural development and for reform. Make no mistake, this bill is the beginning of significant reform. If anybody had told us 5 years ago we could get the elimination of the three-entity rule and direct attribution, we would have thought the skies had opened up and there was a whole new day. The fact is it is in this bill. I also applaud Senator Harkin's staff. Mark Halverson, his staff director, who you can see is now somewhat gray-haired. Anybody who has gone through what he has goes to gray, because this is tough. This is hard to do. The regional differences are deep across the country, as are the philosophical differences. Senator Chambliss, the ranking member. We couldn't ask for a better ranking member than Senator Chambliss. He did a terrific job as chairman, but he proved his mettle in helping us bring this farm bill to the floor. He is a consummate professional. I have worked with a lot of people over the years on farm legislation. It is always difficult; It is always contentious. Yet we have produced some very good bills. I think this one is by far the best. Senator Chambliss played an absolutely essential role. Make no mistake, he fought for his people. He did it effectively and in a collegial way, and that is what we would hope for in the Senate. He always had his eye on the ball, and that was to produce a result for American agriculture. I also salute his staff, the very professional Martha Scott and Bernie Hubert, who were terrific to work with every step of the way; outstanding individuals who reflect well on Senator Chambliss and reflect well on the body. Additionally, I thank the outstanding work of the chairman of the Finance Committee, Chairman Baucus, and the ranking member, Senator Grassley, because without their help, it would have been infinitely more difficult to write this bill. Let's say right at the beginning that we have $8 billion of new resources here; in other words, we are $8 billion above the so-called baseline. The only reason we could do that was because of the help of the Finance Committee. That has made a profound difference. As a result, and as a result of the exceptional leadership of Chairman Harkin and Ranking Member Chambliss, this bill significantly improves commodity programs and energy. We are now embarked on a massive effort to reduce our dependence on foreign oil. It is in this bill. It is critically important. There are also new resources for nutrition. Changes that have not been made in nutrition in over 30 years have been made in this bill, and people can be proud of it; over $5 billion of new resources for nutrition. We should recall, to all those who are listening, this isn't just a food and energy security bill; this is also at root a nutrition bill. Sixty- six percent of the money in this bill is for nutrition in America. That affects every city and town, every farm gate, every ranch gate in America. Sixty-six percent of the money in this bill is for nutrition. For all of those critics--and there are legions of them out there-- especially in some parts of the media who have never bothered to actually look at this bill or read this bill or research what is in it, they should know that 66 percent of this bill is for nutrition. The thing that draws most of their attack, the so-called commodity programs, less than 14 percent; less than $1 in every $7 in this bill is for commodities. Conservation. Because of Senator Harkin's vision and leadership, this is by far the most ambitious conservation program ever included in farm legislation, and he is right. He is right to take us in that direction. The people who are the critics should know that conservation and nutrition are at the centerpiece of this legislation, and rural development programs as well. This legislation is good for farm and ranch families. It is good for rural communities and Main Street businesses. It is an enormous win for consumers and taxpayers. This legislation is the product of countless hours of deliberation that represents a broad consensus. Let me also say the occupant of the chair, Senator Salazar of Colorado, played a key role time after time after time in bringing people together. At the end of the day, what you learn in a legislative body is you have to have an idea, a kernel of an idea for legislation, and it then has to be sold to so many people, and that is the difficult part. Bringing people together is an extraordinary skill. The occupant of the chair, Senator Salazar, has it in spades. I have told others we are lucky to have somebody of his character and somebody of his ability to talk to others, even when they disagree, to find areas of agreement. That has been his great gift on this bill. There are so many others whom I want to single out. Senator Debbie Stabenow of Michigan, who is such a passionate advocate for specialty crops. My goodness, Chairman Harkin, if we heard once, we heard 100 times from her about specialty crops, and boy, she has delivered for those people in this bill, over $2.5 billion of new resources for specialty crops. When you include everything, what a major advance for specialty crops, and there is nothing better than this fresh fruit and vegetable program. Of course, the chairman is the champion of that program, but we are going to go from 14 States that have this fresh fruit and vegetable program for kids in schools, and it is going to go to all 50 States, and a dramatic increase in resources. Because we know--we can see--what is happening in America. We can see what is happening with obesity. We can see there has to be change, and there is dramatic change in this bill--change that I think every Member of this body can be proud of. I mentioned Senator Baucus and the role he played as chairman of the Finance Committee. I can look down that table at others who have contributed. This was a team effort, if ever there was a team effort, on both the Republican and Democratic sides. We appreciate the efforts of so many of our colleagues. I think of our friend from Arkansas, who was so passionate about defending her people, Blanche Lambert Lincoln. It is tough when you are in a minority situation. But she was absolutely determined that her people not be hurt. She worked tirelessly to make certain that was the outcome. So I appreciate the efforts of so many. Ben Nelson of Nebraska, who comes from a farm State much like mine, was so determined, as well, that we write a farm bill that could get through the committee on a strong bipartisan vote and get through the floor on a supermajority, which we have done. I thank Amy Klobuchar, who was so determined to make certain we would look at cellulosic, recognizing that corn ethanol could not meet the ambitious national goals set by the Congress of the United States, and that we had to turn toward cellulosic. She was right there with ideas, advice, and also a willingness to go colleague to colleague to persuade them of the need. All of these people have made enormous contributions. Of course, Senator Leahy's contribution on MILC programs, the former chairman of the committee. We deeply appreciate his contribution as well. It is difficult to write this bill because, as the chairman said, we have a lot less money this time than last time. Let me put that in terms people will more easily understand, in visual terms. The red line on the chart is the old CBO baseline, what the farm bill would cost. The green bars are what this bill has actually cost and is projected to cost. If you net it all out, you find that the 2002 farm bill cost about $20 billion less than the Congressional Budget Office said it would in August of 2002. Looking forward, we have $22 billion less in baseline to write this farm bill than was estimated by the CBO in 2002. I took a call from Mr. Chuck Connor, Acting Secretary, telling me they are going to recommend--or say tomorrow that they would recommend a Presidential veto of this legislation. They do it on cost grounds. They have a number they throw out there that has no relationship to reality. It is an imagining on their part. It is their sort of make-believe writing up of the numbers. The fact is we have $22 billion less in baseline to write this bill than was predicted when we wrote the last one--$22 billion less. So we are $8 billion over the baseline and every penny of it paid for. That is a fact. It is also true that this bill was difficult to write not only because we had less money but because the financial circumstances of the country changed dramatically. The debt of the country increased from $5.8 trillion at the end of 2001 to $8.9 trillion at the end of this year. So we were writing this bill in a totally different environment than the last one. Back then, there were surpluses as far as the eye could see. Now it is red ink, debt. That profoundly changed the circumstance. In addition to that, we also face a very hostile media environment, especially from the leading newspaper in this town, which hasn't seen a single initiative for farm and ranch families in this country that they like. They have not been positive about one single thing. These headlines say: ``Agriwelfare.'' ``Aid is a Bumper Crop to Farmers.'' ``Aid to Ranchers was Diverted for Big Profits.'' ``No Drought Required for Federal Aid.'' There are some elements of truth in every story, but the thing they miss is the much larger story. What does the food policy in this country lead to? I will tell you: the lowest cost food in the history of the world. That is what this food policy leads to--the most plentiful and the safest supplies and the most ambitious nutrition programs of any country in the free world. That is what is here. Do you see one word of that printed in the Washington Post? Do you see one word on the positive things that are here? Not one. They take every little anomaly, every little exception, blow it into a big headline, and take things out of context. They ought to be ashamed of themselves. They take stories from people who have dedicated their careers to dismantling the farm programs of the United States, which are the envy of the world. Here is what happened to food expenditures as a share of disposable personal income in our country. In 1929, 23 cents out of every dollar went to buy food. Today it is 10 cents. That includes, by the way, eating out. We are down to 10 cents of every dollar going for food in this country. There is a lot to be proud of in the agricultural policy of the United States. I would put this at the top: Who pays the least for food in the entire world? Who pays the smallest part of their disposable income for food? We do. America pays the least. By the way, these comparisons are looking in the other countries at food purchased for home consumption. Our number is home consumption and eating out. Look. Indonesia, 55 cents out of every dollar goes to buy food. In the Philippines, it is 38 cents. In China, it is 26 cents. In France, it is 15 cents. In Japan, it is 14 cents. Remember, their numbers are food consumed in the home. Our number--10 percent--is food consumed at home and food outside the home. What a dramatic difference it is, what our people are paying out of their disposable income for food and what everybody else in the world is paying. We can be proud of that. We look at our major competitors--again, the Washington Post never writes this story. Never. You know, we are not in this world alone. There happen to be other countries. We happen to have tough competition. The Europeans are our leading competitors in agriculture. In fact, they are about equal with us in terms of market share. Yet look at what they do for their producers versus what we do for ours. This is a 5-year baseline in the 2007 farm bill. This is what we are doing for nutrition. We are providing five times as much for nutrition over the 5 years as we are for commodities--five times as much for nutrition as for commodities. The Washington Post, why don't you write that story and tell people the whole story? The other element I wished to mention that I was leading up to was what is happening with what the Europeans, our leading competitors, do for their producers versus what we do for ours. Washington Post, why don't you write this story? European Union, $134 billion--and this is after their cap reform. This is what they are spending on farm supports, more than three times greater than the United States at $43 billion. I don't see the Washington Post telling this story. I don't see them ever helping the American people to understand what we are up against in the real world--that our major competitors are spending more than three times as much as we are to support their producers. What happens if you pull the rug out from under our producers? What would happen? Mass bankruptcy, that is what would happen. Is that what we want to do in this country? Do you want to bankrupt American agriculture? Do you want to bankrupt farm and ranch families? I don't think so. So people need to think a little more carefully than some of these columns I have seen written do. They owe it to the American people to tell the whole story of what American food policy has meant. I am going to also look at what our European friends are doing on export subsidies. This is a pie chart of what the Europeans are doing on export subsidies. They account for 87 percent of the export subsidies in the world--the Europeans. The United States is this little sliver, 1 percent. The European Union is outgunning us 87 to 1. These are the hard realities that those of us who have a responsibility for writing agricultural policy have to cope with. Those of us who have actual responsibility, those of us who will be held accountable, the people in this Chamber, have to deal with reality, not fantasy, not misrepresentations, not the exceptions. We have to deal with what is right at the heart of the effect of American farm policy. I would like to read one paragraph from the Wall Street Journal article from September 28 of this year. That article said this: The prospect for a long boom is riveting economists because the declining real price of grain has long been one of the unsung forces behind the development of the global economy. Thanks to steadily improving seeds, synthetic fertilizer and more powerful farm equipment, the productivity of farmers in the West and Asia has stayed so far ahead of population growth that prices of corn and wheat, adjusted for inflation, had dropped 75 percent and 69 percent, respectively, since 1974. Let me repeat that: Thanks to steadily improving seeds, synthetic fertilizer and more powerful farm equipment, the productivity of farmers in the West and Asia has stayed so far ahead of population growth that prices of corn and wheat, adjusted for inflation, had dropped 75 percent and 69 percent, respectively, since 1974. Among other things, falling grain prices made food more affordable for the world's poor, helping shrink the percentage of the world's population that is malnourished. You never see that report in the Washington Post--not once, no. To characterize this bill and this policy as a giveaway to farmers is not accurate or warranted. Total farm bill outlays for the commodity, conservation, nutrition, energy, and other priorities are estimated to represent less than 2 percent of total Federal outlays. Here is total Federal outlays. Here is what is going to the farm bill. This farm bill is going to be less than 2 percent of total Federal expenditure, and the commodity provisions that draw the fire are one-quarter of 1 percent. We used to talk about the farm bill--the last farm bill being 3 percent of Federal outlays. Now we are down to less than 2 percent. Those who run out and--as the administration apparently will do tomorrow--chastise this bill for its spending, why don't they put it in perspective and level with the American people? Why don't they tell the whole story? Why don't they tell them that the old farm bill used to consume 3 percent of the Federal budget? This is down to 2 percent, and the commodity programs that used to be one-third of 1 percent are down to one-quarter of 1 percent. Why not tell the whole story? Why not give people the facts from which they can make a reasoned judgment? We know the European Union is spending three times as much to help their producers as we spend to support ours. We know they are outspending us on export subsidies 87 to 1. We know the European Union is not the only culprit and that Brazil, Argentina, and China are gaining unfair market advantage through hidden subsidies. I know what this means to my State. My State of North Dakota, according to North Dakota State University, says that without the farm bill, net farm income in North Dakota would have decreased from $77,000 per farm to about $13,000 per farm--a reduction of $64,000. That is how significant this is. The average net farm income for all farms was $77,000. Without the provisions of the farm bill, net farm income would average $13,000. The 2002 farm bill decreases the income variability by 47 percent. These are facts. So I conclude that our current farm policy is working not just for farmers but for consumers and taxpayers. But that is not just my conclusion. Over the past 2 years, I have engaged in long conversations with people all across my State. They told me the 2002 farm bill had been a great success, and they recommended that we build on those successes by maintaining and rebalancing commodity programs, by promoting energy production in America so we are less dependent on foreign sources, so that instead of turning to the Middle East, we can look to the Midwest. Wouldn't that be great for America? We are spending almost $300 billion a year importing foreign oil. How much better would our country be if that money could be spent here rather than sending it to places all over the world? The people back home have told me that ensuring predictable help is available for producers stricken by disastrous weather should be part of the farm bill, that we should enhance the conservation of our land and provide new resources for nutrition. All of those items are in this farm bill, and those who wrote it deserve to be proud. Let me briefly talk about what I see as the high points of the bill before us. In the commodity programs, this bill strengthens the producer safety net by rebalancing support for many crops. It leaves direct payments untouched. It increases loan rates for key American commodities, such as wheat, barley, sunflowers, and canola. It provides higher target prices for wheat, barley, oats, soybeans, and minor oil seeds that have for many years been treated less generously, less fairly than other commodities. Finally, it provides a new target price program for the pulse crops. The Sugar Program sees modest improvements. There is a new sugar loan rate, a sugar-to-ethanol program modeled after what they do in Brazil that has led them to energy independence. They were at one time far more dependent than we are. They were getting 80 percent of their energy supplies from abroad. They are now on the brink of energy independence. There is a higher sugar storage rate, and the bill improves the safety net for dairy producers. Specialty crop growers are getting a substantial boost under this bill. There is $2.5 billion of increased funding for nutrition, research, production, and market promotion programs that will further grow our fruit and vegetable industry. There are also reforms to eliminate abuse and make farm programs more transparent. These include elimination of the three-entity rule and the requirement for direct attribution of farm program payments. If somebody is listening and says: What does that mean? very simply, it means there is going to have to be a living, breathing human out there getting farm program payments. They are not going to be able to hide behind a mishmash of legalisms, they are not going to be able to hide behind paper entities and nobody knows who gets the money. This bill provides a new State revenue-based countercyclical program and contains a supplemental agricultural disaster assistance program that was crafted as part of the Senate Finance Committee work. In particular, I again recognize Senator Baucus for his leadership on taking a concept advanced by the National Association of State Departments of Agriculture and making it a reality. It is extremely well thought out. We are also aware of the tremendous financial pain caused by droughts, floods, hurricanes, and other acts of nature. When disasters occur, we respond, but sometimes those responses come much later than they should. A standing disaster assistance program sets us on a predictable and logical path to deal with disaster-related conditions for our farmers and ranchers. In North Dakota 2 years ago, we faced conditions such as massive flooding, water as far as the eye could see, and there was no relief for 2 long years. That should not happen in America. This supplemental disaster program has the following elements: a supplemental revenue assistance program that provides payments when the whole farm revenue falls below the whole farm revenue guarantee; an improved noninsured assistance program to more fairly protect crops that are not currently covered by crop insurance. Some crops are not covered by crop insurance. That doesn't mean there is not a program. Under the current law, the most people can hope to recover is 27.5 percent of what they lose--27.5 percent. That is the most they can possibly recover of losses they might suffer because of a natural disaster, 27.5 percent. Under this program, they will be able to do better. There is a livestock loss assistance program to indemnify producers when deaths occur due to disaster-related conditions, a tree assistance program to help restore and replace damaged orchards and vineyards, and a speciality crop pest and disease prevention program to reduce the likelihood of disaster-related losses due to pest infestation. The supplemental disaster program was built on sound principles authored by the State commissioners of agriculture: One, a predictable agriculture disaster program; two, it covers program crops, speciality crops, forage, and livestock; three, it provides assistance as a percentage of the difference between actual and expected whole farm crop revenue; it complements crop insurance and noninsured assistance programs. In fact, it creates an incentive to buy up. That is exactly what we should be doing, and that is in this bill. This program is designed to be made available soon after a disaster hits, not after the auction signs go up. This picture is from my hometown newspaper earlier this year. ``First the drought, then the auction.'' This picture is showing a farm auction in North Dakota from the perspective of this fellow's boot. I have been to these auctions. I have watched the mother of the family crying at the kitchen table after losing a farm that was in the family for five generations. I have seen farmers and their kids and the looks of agony on their faces as everything they have known is taken in a few hours. I have seen it. Anybody who has felt the emotion knows what I am talking about-- incredibly good and decent people who lost it all, not because of something they did but because of the vagaries of Mother Nature, because of disease, because of movements in a market that are the most difficult to predict, other than the energy markets, of any market in this country. If we want farm and ranch families to just be wiped out by natural disasters, we can do that, but that isn't America. When Katrina hit, Americans rushed to help out. My wife and I called the Red Cross to make our donation, and the man answering the phone told me he had never seen such an outpouring in his life of just average citizens digging in their own pockets to help people in another part of the country. That is America. There is a history in farm country: If your neighbor gets sick and the crop needs to be harvested, all the neighbors come together and go out and harvest that farmer's crop. If a barn burns down, they don't wait for the insurance settlement; the neighbors get together and they build that barn back up. That is a good thing. That is right at the heart of what makes America a great place. Let me briefly talk about the energy title that helps us reduce our dependence on foreign oil. The reason the bill is called the Food and Energy Security Act is because it makes smart investments in breaking our long-term dependence on foreign oil. That is why the energy title is the most exciting piece of this legislation, to me. It focuses on developing cellulosic ethanol. We cannot reach the level of ethanol use Congress has called for without it. There are simply limits to what corn-based ethanol can produce. With a cellulosic ethanol industry that can turn prairie grass or wood waste into fuel, we will be able to take full advantage of the agricultural abundance of our country. We have set ourselves on a path to freedom from relying on foreign despots for the energy we need. This energy title will provide more than $2.5 billion, including the Finance Committee tax credits, to encourage production of advanced biofuels and renewable energy. The farm bill assists with biofuel and renewable energy production in several ways: It provides assistance for the establishment of renewable biomass crops; it includes grants and loan guarantees to develop advanced biofuels refineries; it provides an incentive for increased production of advanced biofuels; it helps farmers and rural small businesses invest in energy efficiency and renewable energy technologies; and it accelerates research and development of advanced biofuels. I think this is the most exciting part of this bill. It is in every American's interest that we do this and we do it sooner rather than later. It is in this bill. It deserves people's support. The conservation title enhances the conservation of our land with a $4.5 billion expansion from our current conservation efforts. It fully funds successful programs, such as the Wetlands Reserve Program, which is important environmentally, and the Grasslands Reserve Program. It also maintains the overall acreage limit for the Conservation Reserve Program. Additionally, $20 million is provided to fund the Open Fields Initiative that I offered with Senator Roberts. Open Fields underwrites State programs that offer incentives to farmers and ranchers who voluntarily open their land to hunting, fishing, and people who might just want to take a walk or look at birds. I am proud this bill boosts nutrition funding by almost $5.3 billion over 5 years. That is more than $1 billion higher than the House adds for nutrition. In fact, nutrition gets a bigger increase than any other area in this bill. Within that total, $1 billion for the fresh fruit and vegetable program that the chairman has championed is going to make a difference to kids in every State in the Union. Previously, we could only provide assistance to 14 States. Now every State in the Nation will be able to have a fresh fruit and vegetable program. We have also increased funding for the Emergency Food Assistance Program by $550 million over 5 years. This additional funding will allow food banks to serve those most in need. Who among us has not heard from our food banks that they are having an increasing difficulty meeting the demands made on them? Finally, we have updated a number of food stamp policies for the first time in 30 years. These changes represent an additional $3.7 billion for that program. In addition to all the important improvements I noted, this bill is fully paid for. It complies with the new pay-go budget discipline, and that has not been easy. We will hear from the administration tomorrow that somehow we have come up with $36 billion or $38 billion of new money. They arrived at that total by the most creative accounting I have ever seen. The fact is this bill is $8 billion over baseline. The further fact is that this bill allowed us $22 billion less than we had when we wrote the last farm bill. Anybody who suggests this isn't fiscally responsible is not looking very hard. When the 2002 farm bill was written, the Ag Committee had $73.5 billion in new resources to utilize in addressing the challenges of that bill. As many in this body remember, that was not an easy process. Well, this year the Agriculture Committee, working in close cooperation with the Senate Finance Committee, had only $8 billion above baseline in new funding resources. And as I have indicated, even with that, we were $22 billion below on a baseline basis of what was available for writing the last farm bill. At the same time, by rebalancing and reformulating the commodity title and establishing a standing Agriculture Disaster Assistance Program, the committee has been able to maintain and improve the economic safety net for our farmers, including those who produce specialty crops. At the same time, the adjustments made in the commodity title, when coupled with the funding made available by the Finance Committee, allow this legislation to provide about $10.7 billion that is used to address other priorities within the jurisdiction of the Agriculture Committee. So hear me now. Hear me now. We have reduced the commodity portion. We have reduced crop insurance. Commodities provide 34 percent, crop insurance provides 32 percent, and the Finance Committee provided 28 percent. Those are the funding sources to increase conservation by 39.4 percent of the total, nutrition got 46.8 percent of the increases, energy 9 percent, and other 4.7 percent. So this is where the money came from. It came from commodities and crop insurance and it went to conservation and nutrition. That is a fact. That is not the only fact we ought to draw people's attention to. We also ought to point out that if you look ahead on this farm bill to where all the money goes--you look at this whole bill and where the money goes--66 percent goes to nutrition, conservation 9 percent, crop insurance 7.6 percent, commodity programs 13.6 percent--a dramatic reduction from the previous farm bill. And that is a fact. That is a fact. I think in the last farm bill commodities were at about 15 percent. So this has been no easy task, but the farm bill we are considering represents a tremendous effort by Chairman Harkin, by Ranking Member Chambliss, as well as by Chairman Baucus and Ranking Member Grassley. I tell you, I have never seen a better team effort in this Chamber, a more bipartisan effort than was made on this farm bill. When has a farm bill ever come out of the committee--with 21 Members of the Senate on that committee--when has a farm bill ever come out without a dissenting vote? I have been here 21 years. I have never seen that kind of bipartisan support as we saw for this bill. And why? Because it is deserved. It is deserved because this bill breaks new ground. It is the beginning of reform. It commits substantial new resources to nutrition that is already by far the biggest part of farm legislation, and it has the hope for America being able to reduce its dependence on foreign energy. That is right at the heart of this bill. That is why we call it the Food and Energy Security Act. I commend the leaders for their hard work. It has been the result of months of bipartisan collaboration. And, as I have said, it is fully paid for. Over the next several days, I expect we will hear some colleagues unfairly criticize the bill for providing an economic safety net for our producers. Let me remind my colleagues that current law is estimated by CBO to spend almost 15 percent of total mandatory outlays for the commodity programs, with 66 percent of the estimated outlays going to support food stamps and other nutrition programs to the needy, and just under 8 percent of the outlays are for resource conservation programs. Under the bill proposed by the Senate Agriculture Committee, the amount for commodity programs is reduced more than 11 percent to 13.6 percent of total outlays. Spending for nutrition programs remains at about two-thirds of total outlays, and conservation spending is increased nearly 17 percent to 9 percent of total estimated spending. In closing, this farm bill represents an investment in American agriculture that will benefit our producers, our rural communities, our Main Street businesses, taxpayers, and consumers, and particularly the most needy among us. It deserves the support of every Senator. Mr. President, I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, section 307 of S. Con. Res. 21, the 2008 budget resolution, permits the chairman of the Senate Budget Committee to revise the allocations, aggregates, and other appropriate levels for legislation, including one or more bills and amendments, that reauthorizes the 2002 farm bill or similar or related programs, provides for revenue changes, or any combination thereof. Section 307 authorizes the revisions provided that certain conditions are met, including that amounts provided in the legislation for the above purposes not exceed $20 billion over the period of fiscal years 2007 through 2012 and that the legislation not worsen the deficit over the period of the total of fiscal years 2007 through 2012 or the period of the total of fiscal years 2007 through 2017. The Senate is considering an amendment in the nature of a substitute to H.R. 2419 that consolidates the following: S. 2302, the Food and Energy Security Act of 2007, which was reported by the Senate Committee on Agriculture, Nutrition, and Forestry on November 2, 2007; S. 2242, the Heartland, Habitat, Harvest, and Horticulture Act of 2007, which was reported by the Senate Committee on Finance on October 25, 2007; and a number of technical and other corrections made to both bills. I find that the consolidated legislation satisfies the conditions of the deficit-neutral reserve fund for the farm bill. I am pleased to report to the Senate that this legislation is fully paid for over both the 2007 through 2012 time period and the 2007 through 2017 time period. Therefore, pursuant to section 307, I am adjusting the aggregates in the 2008 budget resolution, as well as the allocation provided to the Senate Committee on Agriculture, Nutrition, and Forestry. I ask unanimous consent to have the following revisions to S. Con. Res. 21 printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, section 301 of S. Con. Res. 21, the 2008 budget resolution, permits the chairman of the Senate Budget Committee to revise the allocations, aggregates, and other appropriate levels for legislation that reauthorizes the State Children's Health Insurance Program, SCHIP. Section 301 authorizes the revisions provided that certain conditions are met, including that the legislation not result in more than $50 billion in outlays for SCHIP over the period of fiscal years 2007 through 2012 and that the legislation not worsen the deficit over the period of the total of fiscal years 2007 through 2012 or the period of the total of fiscal years 2007 through 2017. I find that H.R. 3963, the Children's Health Insurance Program Reauthorization Act of 2007, satisfies the conditions of the deficit- neutral reserve fund for SCHIP legislation. Therefore, pursuant to section 301, I am adjusting the aggregates in the 2008 budget resolution, as well as the allocation provided to the Senate Finance Committee. I ask unanimous consent that the following revisions to S. Con. Res. 21 be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, the only fault I find with the amendment of the Senator from South Carolina is that this provision is not in the bill before us. It is not in this bill. The thing he finds objectionable is in the House bill; it is not in this bill.

Mr. CONRAD. I think all time has expired.

Mr. CONRAD. Mr. President, is there time remaining?

Mr. CONRAD. Mr. President, I would just say again that I find it unusual that we are passing amendments on provisions that aren't even in the bill before us. It is in the House bill. Now, maybe the Senator from South Carolina wants to send a signal, and I certainly respect that, but the fact is the provision he objects to is not in the legislation before us. It is over in the House bill. Ultimately, this will have to be worked out between the House and the Senate. I thank the Chair.

Mr. CONRAD. Mr. President, moments ago I heard my colleague from Arizona, who is a member of the Finance Committee, as am I, talking about eliminating the alternative minimum tax. Most of us in this Chamber know we have a problem with the alternative minimum tax that is going to affect 23 million Americans, up from nearly 4 million last year, if we fail to act. But the notion that we eliminate the alternative minimum tax and not pay for it I find breathtaking. Why? Because unless we replace that revenue, we will have to go out and borrow another $870 billion over the next 10 years. In fact, some of my colleagues in a meeting yesterday of the Finance Committee said let's not only eliminate the alternative minimum tax and not pay for it, let's eliminate or extend the 2001 and 2003 tax cuts and not pay for that either, not reduce spending or replace it with other revenue. The effect of those proposals would be $4 trillion of additional debt after they have already run up the debt of the country by $3 trillion in the last 6 years alone, a 50-percent increase in the debt. I find that not just irresponsible, I find it wildly irresponsible. From where is this money going to come? It would be borrowed. From whom would we borrow it? Right now, over half the money we are borrowing to float this Federal Government we are borrowing from abroad and primarily the Japanese and the Chinese. So when my colleagues come out and say let's have a bunch more tax cuts and not pay for them, by either reducing spending or replacing it with other revenue, understand what they are saying. What they are saying is let's go borrow a bunch more money from China and Japan. Some people say it is a sign of strength that they will loan us this money. That is an interesting idea of strength. I had a man in my office the other day, one of the wealthiest men in America. He said to me: I believe America is in danger of following the path of Great Britain, a great empire in decline, because we are not responsible about our financial commitments and we get into this idea of spending money we don't have and borrowing it primarily from abroad. It leaves me cold to hear some of my colleagues talk about supporting every tax cut, supporting every spending initiative, wanting another $200 billion for the war in Iraq and not willing to pay for any of it. That is what will bring America down. That is what will weaken this country. That is what will leave us deep in debt and a debt that we will owe all around the world. We are increasingly dependent on the kindness of strangers. At some point, we have to get serious around here and become responsible. Those who embrace every spending initiative of every tax cut and then call themselves fiscally responsible have gone beyond the pale. I thank the Chair and yield the floor. Amendment No. 3338

Mr. CONRAD

Mr. CONRAD. Mr. President, pursuant to section 301 of S. Con. Res. 21, I previously filed revisions to S. Con. Res. 21, the 2008 budget resolution. Those revisions were made for legislation reauthorizing the State Children's Health Insurance Program, SCHIP. Congress cleared H.R. 976 on September 27, 2007. The President vetoed that legislation on October 3, 2007. Unfortunately, the House of Representatives was unsuccessful today in its attempt to override that veto. Consequently, I am further revising the 2008 budget resolution and reversing the adjustments previously made pursuant to section 301 to the aggregates and the allocation provided to the Senate Finance Committee. I ask unanimous consent that the following revisions to S. Con. Res. 21 be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, there are still parts of this country where having access to a clean, reliable water supply is not guaranteed. Believe it or not, there are still places, many of which are on Indian reservations, where individuals must haul their daily water for drinking, cooking, and cleaning. Over the years, Congress has authorized several municipal, rural and industrial water supply projects for tribes; however, funding for those projects has lagged significantly. This, coupled with construction costs that are increasing on average about 10 percent a year, makes it difficult for tribes to assemble cost-effective bid packages to get these projects built in a reasonable time frame. As a result, many of the projects have stalled or have yet to be built. One mechanism to address this dilemma would be to allow tribes to utilize flexible financing to construct these vital projects. Under this option, tribes could issue tax exempt bonds or enter into other loans to construct these projects now, and then utilize Federal appropriations to pay financing costs over time. This concept has been launched in the Indian Reservation Roads IRR, program, which has become a model for financing tribal infrastructure projects. The Standing Rock Sioux Tribe in my State was the leader in securing the initial agreement in the IRR program. This agreement has allowed the tribe to undertake a major road construction project and complete it in a few short years. Without this flexibility, the project would have taken upwards of 20 years and $27 million more to complete, according to the tribe's analysis. A Department of Interior administrative ruling issued on December 22, 2005, held that debt financing is an allowable use of Federal funds under a tribe's self-determination agreement if the debt instrument is used to pay for valid water construction costs. Unfortunately, this ruling applied to only one tribe. The legislation I am introducing today would affirm the ruling for all tribes, making them eligible for reimbursement of such financing costs. This will provide tribes with the necessary flexibility to get their projects built now as opposed to having construction drag out for years, which will only increase the costs to the Federal Government and delay the delivery of safe, clean drinking water to many. We have a trust obligation to meet the needs of Indian tribes. Ensuring a safe, reliable water supply is part of this obligation. In the 21st century, no home in this country should be without access to quality water. I am pleased that Senators Johnson and Tester are original cosponsors, and I urge my colleagues to support this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, there are still parts of this country where having access to a clean, reliable water supply is not guaranteed. Believe it or not, there are still places, many of which are on Indian reservations, where individuals must haul their daily water for drinking, cooking, and cleaning. Over the years, Congress has authorized several municipal, rural and industrial water supply projects for tribes; however, funding for those projects has lagged significantly. This, coupled with construction costs that are increasing on average about 10 percent a year, makes it difficult for tribes to assemble cost-effective bid packages to get these projects built in a reasonable time frame. As a result, many of the projects have stalled or have yet to be built. One mechanism to address this dilemma would be to allow tribes to utilize flexible financing to construct these vital projects. Under this option, tribes could issue tax exempt bonds or enter into other loans to construct these projects now, and then utilize Federal appropriations to pay financing costs over time. This concept has been launched in the Indian Reservation Roads IRR, program, which has become a model for financing tribal infrastructure projects. The Standing Rock Sioux Tribe in my State was the leader in securing the initial agreement in the IRR program. This agreement has allowed the tribe to undertake a major road construction project and complete it in a few short years. Without this flexibility, the project would have taken upwards of 20 years and $27 million more to complete, according to the tribe's analysis. A Department of Interior administrative ruling issued on December 22, 2005, held that debt financing is an allowable use of Federal funds under a tribe's self-determination agreement if the debt instrument is used to pay for valid water construction costs. Unfortunately, this ruling applied to only one tribe. The legislation I am introducing today would affirm the ruling for all tribes, making them eligible for reimbursement of such financing costs. This will provide tribes with the necessary flexibility to get their projects built now as opposed to having construction drag out for years, which will only increase the costs to the Federal Government and delay the delivery of safe, clean drinking water to many. We have a trust obligation to meet the needs of Indian tribes. Ensuring a safe, reliable water supply is part of this obligation. In the 21st century, no home in this country should be without access to quality water. I am pleased that Senators Johnson and Tester are original cosponsors, and I urge my colleagues to support this important legislation.

Mr. CONRAD

Mr. CONRAD. Mr. President, I wish to submit to the Senate the budget scorekeeping report for fiscal year 2007 prepared by the Congressional Budget Office pursuant to section 308(b) and in aid of section 311 of the Congressional Budget Act of 1974, as amended. This is my final report for fiscal year 2007. This report shows the effects of Congressional action through October 1, 2007. Since my last report, dated July 26, 2007, the Congress has cleared and the President has signed Public Law 110-84, the Higher Education Access Act of 2007. The estimates of budget authority, outlays, and revenues used in this report are consistent with the technical and economic assumptions of S. Con. Res. 21, the 2008 budget resolution. The estimates show that current level spending equals the budget resolution for both budget authority and outlays while current level revenues exceed the budget resolution by $4.2 billion. I want to commend the Congress for not exceeding the limits set in the 2008 budget resolution for fiscal year 2007. I ask unanimous consent that the letter and accompanying tables from CBO be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Madam President, I rise to offer for the Record, the Budget Committee's official scoring of H.R. 3222, the Department of Defense Appropriations Act for fiscal year 2008. The bill, as reported by the Senate Committee on Appropriations, provides $459.3 billion in discretionary budget authority for fiscal year 2008, which will result in new outlays of $312.2 billion. When outlays from prior-year budget authority are taken into account, discretionary outlays for the bill will total $476 billion. The Senate-reported bill is at its section 302(b) allocation for budget authority and $3 million below its allocation for outlays. No points of order lie against the committee-reported bill. I ask unanimous consent that the table displaying the Budget Committee scoring of the bill be printed in the Record.

Mr. CONRAD

Mr. CONRAD. I, too, want to lend my support for a 2-year extension of the Medicare section 508 hospital program. As the chairman and ranking member well know, I worked within the Finance Committee during the Medicare Modernization Act to create this vital program. For too long, Medicare has shortchanged Rural States, like North Dakota, in the wage index formula by not accurately reflecting real wages. Furthermore, the reclassification system has been biased towards urban areas and has failed to take into account the rural health care system experience where service areas overlap and facilities routinely compete across several hundreds of miles for professional staff. The section 508 program has helped to somewhat level the playing field for these hospitals--allowing them to improve their wages and make other significant investments--but its continuation is critical to ensuring the financial viability of many hospitals in North Dakota. The Congress must pass Medicare legislation this fall that includes a 2-year extension of the section 508 program.

Mr. CONRAD

Mr. CONRAD. Mr. President, I was pleased to join my co-chair of the Senate Tanker Caucus, the senior Senator from Utah, in introducing amendment No. 2895. And I am very glad that the distinguished ranking member of the Armed Services Committee chose to join with our caucus in preparing a compromise amendment, No. 3104, that makes clear how crucial recapitalizing our tanker fleet is to our national security. I thank Senator McCain and Senator Levin for their leadership on this issue and their willingness to accept this amendment. In October of last year, the Secretary and Chief of Staff of the Air Force made a very important announcement. They declared that their top acquisition priority for the future is the replacement of our Nation's aerial refueling tanker fleet. This program could cost about $13 billion over the next 5 years, and perhaps $100 billion over the next three decades. The senior Senator from Utah and I joined forces to form a caucus in support of this vital objective. We believe that updating our aerial tanker fleet is crucial if we are to continue to be able to project American military power around the globe. The U.S. national security strategy depends on a robust air refueling capability, as do our coalition partners. No other nation in the world has a comparable capability. The U.S. advantage in tankers is at the center of almost all the other strategic capabilities of our Air Force. Yet today, our tanker fleet is the oldest part of the Air Force inventory making maintenance difficult and expensive. The KC-135 makes up over 90 percent of our refueling capability, but the average age of that fleet is over 45 years. The ``E-Model'' aircraft have the oldest engines and are rapidly declining in utility. Their mission capable rates have dropped significantly, and their cost-per-flying hour has increased. Despite generations of meticulous maintenance, these tankers are getting toward the end of their economic service life. Uncertainty about corrosion problems creates a significant vulnerability--we could find a serious problem in a few of these aircraft that could result in the whole fleet being grounded. And that would have catastrophic results, as General Michael Moseley made very clear in comments on October 12. ``In this global business we're in, the single point of failure of an air bridge, or the single point failure for global intelligence, surveillance and reconnaissance, or the single point of failure for global strike is the tanker,'' he said. ``To be able to bridge the Atlantic, to be able to bridge the Pacific, or to be able to let business in the theater be persistent business in the theater, it's the tanker.'' To reverse that vulnerability, the Air Force is taking steps to replace these tankers. The tanker caucus supports that effort. The Air Force is also taking steps to make sure that a portion of the current tanker fleet is kept viable as they work to develop and buy the next generation tanker. This amendment supports that effort as well, by specifically referencing the Air Force's strategy to modify and upgrade an appropriate portion of the KC-135 fleet to ensure that it remains viable as the Air Force waits for new tankers to be delivered. Nothing in this amendment would further constrain the Air Force's ability to retire the oldest tankers as they deem necessary. Finally, this amendment recognizes that the procurement of aerial refueling on a fee-for-service basis may also end up being part of the solution to preventing a temporary gap in tanker capability--though I doubt that it will make up a major portion of our overall tanker capacity. The Air Force is working through two competing submissions for tanker replacement in response to the request for proposals it issued last year. This full, free and open competition will help to achieve the best value possible for the taxpayer on this major program. As General Moseley noted, ``It's important to get started'' on this important acquisition program. The time is right to begin recapitalizing this vital national asset. The Air Force predicts that a funding shortfall this year would likely lead to a 6 to 9 month delay in fielding the new tankers. The original amendment that Senator Hatch and I offered was co- sponsored by Senators Dorgan, Gregg, Roberts, Sununu, Cantwell and Inhofe. It simply expressed the sense of the Congress that timely replacement of the Air Force tanker fleet is a vital national security priority, and presented the reasons for that judgment. The McCain- Conrad amendment makes the same point in expressing that modernizing the tanker force is a vital national security priority. While some members and some committees differ on the amount of funding that they believe is required to carry out this program fiscal year 2008, I believe that the Senate can agree that carrying out this program is a vital national security priority. I appreciate my colleagues' support for this amendment. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Despite the successes that have been achieved under the Critical Access Hospital Program, changes made as part of the Medicare Modernization Act of 2003 have harmed the ability of certain critical hospitals, such as St. Joseph's Hospital in Dickinson, ND, to become critical access hospitals. It is imperative that flexibility be reinstated in the program to allow States to deem hospitals as necessary providers and, therefore, eligible for critical access hospital status. I have spoken with you about this issue in the past and am pleased that you are willing to consider this issue during consideration of a Medicare package later in the year.

Mr. CONRAD. I thank my colleague for his commitment and look forward to working with you to craft a reasonable solution that benefits St. Joseph's.

Mr. CONRAD. As the chairman knows, many rural hospitals are facing significant financial pressure and are finding it increasingly difficult to operate under the Medicare prospective payment system. In response, the chairman and I have worked closely to support our rural facilities and established the Critical Access Hospital Program in 1997. This program was designed to help small, rural facilities remain financially viable in the face of inadequate Medicare reimbursement, and it has been tremendously beneficial to maintaining access to hospital care across North Dakota and other rural states.

Mr. CONRAD

Mr. CONRAD. Mr. President, section 301 of S. Con. Res. 21, the 2008 budget resolution, permits the chairman of the Senate Budget Committee to revise the allocations, aggregates, and other appropriate levels for legislation that reauthorizes the State Children's Health Insurance Program, SCHIP. Section 301 authorizes the revisions provided that certain conditions are met, including that the legislation not result in more than $50 billion in outlays for SCHIP over the period of fiscal years 2007 through 2012 and that the legislation not worsen the deficit over the period of the total of fiscal years 2007 through 2012 or the period of the total of fiscal years 2007 through 2017. I find that H.R. 976, the Children's Health Insurance Program Reauthorization Act of 2007, satisfies the conditions of the deficit- neutral reserve fund for SCHIP legislation. Therefore, pursuant to section 301, I am adjusting the aggregates in the 2008 budget resolution, as well as the allocation provided to the Senate Finance Committee. I ask unanimous consent that the following revisions to S. Con. Res. 21 be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, the Senate is now considering a measure to further increase the Federal debt limit. This is further confirmation of the Bush administration's failed fiscal record. It represents now the fifth time the President has come to Congress asking for more debt. We all know we have no choice in this matter. These are debts that have already been accrued. The question before us is: Do we pay the bills of the United States or do we fail to do so? If we failed to cover our borrowing, if we failed to pay the bill, the creditworthiness of the United States would be called into question and there would be a run on the dollar. There would be economic chaos. So we have no choice, and I hope that colleagues on both sides will take up this responsibility. We all remember that when the Bush administration came into office, the President said this: My budget pays down a record amount of national debt. We will pay off $2 trillion of debt over the next decade. That will be the largest debt reduction of any country, ever. Future generations shouldn't be forced to pay back money that we have borrowed. We owe this kind of responsibility to our children and grandchildren. That is what the President told us then. We are now able to look at the record. What we see is quite different from what he asserted then. Instead of paying down the debt, the debt has exploded on his watch. Here are the increases in the debt that have been enacted and requested by this President. First of all, perhaps it is instructive to go back to the period 1998 to 2001, during the previous administration, when there were no increases in the debt. In fact, we were paying down the debt. Then, in 2002, this President asked for and got a $450 billion increase in the debt limit; followed in 2003 by the largest increase ever, $984 billion; followed by $800 billion in 2004, $781 billion in 2006, and now, this year, another $850 billion. This is the debt President. The debt limit of the United States will have been increased, under his direction, by almost $4 trillion. This chart shows the dramatic deterioration in the budget picture under the fiscal policies of this President. We were in surplus. In fact, we had even stopped, under the previous administration, taking Social Security funds to pay other bills. Under this administration, the deficit skyrocketed and the debt has grown geometrically. Despite all the assertions of fiscal responsibility, this President has increased Federal spending from $1.9 trillion to $2.7 trillion a year, an increase of nearly 50 percent. On the war alone--and this puts in perspective the war costs--you will recall the President told us that the war would cost $50 billion. We are at $567 billion and counting. Now we hear of a request for another $42 billion on top of the $147 billion that was allocated this year. President Bush has indicated and his administration has told us that we should expect a ``Korea-like'' presence in Iraq. Here is what this would mean, according to the Congressional Budget Office. So far, the war in Iraq and Afghanistan has cost $567 billion. CBO tells us a ``Korea-like'' presence would mean an additional $1 trillion in the period 2009 to 2017, and from 2018 to 2057, another $1 trillion, for an addition of $2 trillion to the $567 billion already committed. So the war that was supposed to cost $50 billion is now headed for $2.5 trillion, if we maintain a ``Korea-like'' presence, as called for by the President. On the revenue side of the equation, where we hear so much from our colleagues about the dramatic improvement in revenue, what you will notice in all of their charts is they just look at the last couple of years. They don't look back to when this administration started. But what you see is real revenues, adjusted for inflation, were $2.03 trillion back in 2000. This year, real revenues are $2.13 trillion. Revenue has been basically stagnant in this country for 6 years. So when you dramatically increase spending and revenue is stagnant, guess what happens. The debt soars. That is precisely what has happened under this President--from $5.8 trillion in 2001 to a now anticipated $8.9 trillion at the end of this year. This President has run up the debt in a record way. He truly will claim the mantle and the legacy as the debt President. Not only has he dramatically run up our debt domestically, he has also dramatically increased foreign holdings of our U.S. debt. When he came into office, there was just over $1 trillion of U.S. debt held abroad. In other words, it took 42 Presidents 224 years to run up $1 trillion of U.S. debt held externally. This President has more than doubled that amount in just 6 years, to almost $2.2 trillion. The result of all of that is we now owe Japan over $600 billion, we owe China over $400 billion, we owe the United Kingdom over $200 billion, we owe the ``oil exporters'' over $100 billion, and on and on it goes. We are now truly in need of the kindness of foreigners because if they do not float this boat, if they don't provide the financing for this debt, the United States would be in even deeper trouble. Can you imagine if all of a sudden the Chinese, the Japanese, the British, and the rest decided not to extend us additional credit, additional loans? The interest rates in this country would jump. It would put us into a recession, and we would be in deep trouble. So we are in debt and we are beholden and we are dependent on the kindness of strangers. Here is what the head of the Federal Reserve has warned us on the danger of growing debt. He said this before the Senate Budget Committee on January 18: Ultimately this expansion of debt would spark a fiscal crisis which could be addressed only by very sharp spending cuts or tax increases or both . . . [T]he effects on the U.S. economy would be severe. High rates of government borrowing would drain funds away from private capital formation, and thus slow the growth of real incomes and living standards over time. The recklessness of this administration in managing the fiscal affairs of this Nation is clear and compelling. It could not be more apparent. Tonight is one more confirmation of the disastrous consequences of the fiscal policy of this President. He is the debt President. With the action that will be required to be taken tonight, he will have added nearly $4 trillion to the debt position of our Nation. That is a sad legacy, and future generations are going to pay an enormous price for this profligacy--spending without a willingness to pay for it, simply putting it on the charge card, shoving the debt off to future generations, and all the time claiming to be fiscally responsible. The actions of Congress tonight, responding to the request of the President to once again expand the debt limit by hundreds of billions of dollars--in fact, tonight, by $850 billion in one fell swoop--should tell us all we must have a new direction for the fiscal course of this country. I yield the floor and suggest the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask for the yeas and nays.

Mr. CONRAD

Mr. CONRAD. Mr. President, our Nation's bomber fleet is a vital national asset. Bombers today offer global reach, operational responsiveness, and close air support for troops on the ground in ways that their designers could never have imagined. While our bomber fleet is currently aging, there is virtually no chance that new long-range bombers will enter service before 2020. If we remove bombers from our active force and do not furnish them with critical upgrade programs, they will be irretrievably lost. This will create a ``bathtub'' in bomber capabilities that will last over a decade. Over the last 2 years, the administration has proposed dramatically downsizing our bomber force, particularly by cutting the B-52 force from 94 aircraft to 56. Neither the House nor the Senate found the administration's arguments for cutting the bomber fleet persuasive. They both concluded that making deep B-52 retirements would put at risk our military's ability to carry out the national security strategy. Let me quote from the House Armed Services Committee's report: Committee also understands that the current B-52 combat coded force structure is insufficient to meet combatant commander requirements for conventional long range strike, if the need should arise to conduct simultaneous operations in two major regional conflicts. The Senate Armed Services Committee had similar concerns: The Committee is concerned that any further reduction in the B-52H total aircraft inventory will create unacceptable risk to national security and may prevent our ability to strike the required conventional target set during times of war. Because of these concerns, last year Congress enacted defense legislation allowing the retirement of only 18 B-52s, reducing the fleet to 76. But the law required that the savings from those retirements be devoted to modernizing the remaining bombers, and the law prohibited any further retirements until a next generation bomber was available--probably around 2018. I will ask that section 131 of the John Warner National Defense Authorization Act for Fiscal Year 2007 be printed in the Record, along with the relevant sections of the House and Senate Armed Services Committees' reports on that law. Unfortunately, there have been some efforts to try to find a way around that law. For a while, it looked like there might be an effort to play games with the assignments of the B-52 fleet, by doubling up the assignments of aircraft that we now use for training and calling them ``dual coded'' training and combat aircraft. Then, instead of retiring B-52s, they would simply mothball them. But mothballed aircraft will do nothing to preserve our ability to fight and win two wars. Based on the analysis of the Armed Services Committee and my own staff's analysis, it is clear that slashing the size of our B-52 force would significantly increase the risks we face in fighting and winning two nearly simultaneous contingencies. If we retired 38 B-52s, it would be impossible for the Air Force to deploy a bomber force comparable to the one we used during the initial days of the war in Iraq. During the initial 30 days of combat in Iraq, the Air Force used more than 80 B- 52s so it could sustain a deployed force of 42 B-52s at forward operating locations overseas. Obviously, the Air Force could not repeat that feat with just 56 B-52s. Moreover, the war in Iraq has tied down a large share of our land forces and increased our dependence on the Air Force for dealing with any additional crises. Chairman of the Joint Chiefs General Peter Pace has made the situation very clear. He said, ``If another, [conflict] popped up tomorrow, regardless of where, . . . you would have the Navy and the Air Force being able to get there very quickly.'' Because we were concerned about the risks to our warfighting ability, last year Congress barred the Pentagon from retiring B-52s until the submission of a comprehensive Bomber Roadmap study by an independent research institution. That study still has not been completed. Some people have tried to tie the B-52 issue to an altogether different question: whether the Air Force will be allowed to retire a long list of old aircraft in its inventory that currently have restrictions on their operation or are even grounded. Let me be clear. As chairman of the Budget Committee, I strongly agree that we need to retire unserviceable aircraft. There is no point in paying to maintain aircraft that we cannot fly. The B-52 is not part of that problem. While it has flown for many years, the B-52 is still a young aircraft in flying hour terms. The Air Force has said that today's H-model B-52 is flyable for another 30 to 40 years. Most commercial airliners have several times as many cycles per aircraft and airframe hours as the B-52, which spent most of the Cold War sitting alert on the ground. In fact, the B-52 is in many ways the most valuable aircraft in our inventory. Today's B-52 has been modernized and can carry the widest range of weapons of any aircraft we own. It has the highest mission capable rate in the bomber force, and it costs the least to operate of any bomber. The FY 2006 reimbursement rate for the B-52 is $10,000 per flying hour less than the B-1B and $4,000 per flying hour less than the B-2. Does it make sense to try to save money by cutting the portion of the bomber force that is by far the least expensive to operate and has the highest utilization and mission capable rates? I don't think so. The B-52 is an indispensable tool for our nation's military, being used in combat overseas on a daily basis. It is crucial that we maintain a sizeable bomber force and that each plane is outfitted with the most technologically advanced equipment. The Conrad-Dorgan-Landrieu-Vitter amendment reinforces the law we passed last year requiring a B-52 force of no less than 76 aircraft. This amendment requires that the 76 aircraft B-52 force include 63 active aircraft, 11 backup aircraft and two reserve aircraft, just as it did in 2006. It will prohibit the Pentagon from reducing the maintenance status of some B-52s and creating ``hangar queens'' that are not regularly flown. The Conrad amendment also requires technological upgrades to the entire B-52 fleet, ensuring the planes are using the latest in defense technology. It states that the entire fleet must be kept in a ``common configuration.'' The Senate and House Armed Services Committees have already authorized additional funding for B-52s to ensure that the full 76 aircraft fleet is upgraded. It makes absolutely no sense to try to save money by cutting the cheapest bombers to operate. With ongoing conflicts in Iraq, Afghanistan and elsewhere around the world, our Nation should accelerate the modernization of our bomber force rather than shrinking it. I thank the distinguished managers of the bill for their support of this amendment and look forward to working with them as the Defense authorization bill moves toward enactment. I ask unanimous consent that the material to which I referred be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, pursuant to section 301 of S. Con. Res. 21, I previously filed revisions to S. Con. Res. 21, the 2008 budget resolution. Those revisions were made for legislation reauthorizing the State Children's Health Insurance Program, SCHIP. The Senate passed H.R. 976 on August 2. To preserve the adjustment for SCHIP legislation, I am further revising the 2008 budget resolution and reversing the adjustments previously made pursuant to section 301 to the aggregates and the allocation provided to the Senate Finance Committee. Assuming it meets the conditions of the deficit-neutral reserve fund specified in section 301, I will again adjust the aggregates and the Senate Finance Committee's allocation for final SCHIP legislation. I ask unanimous consent to have the following revisions to S. Con. Res. 21 printed in the Record.

Mr. CONRAD

Mr. CONRAD. Madam President, I am constrained to object on behalf of the managers of the bill.