Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I have enjoyed this presentation so much. It is perhaps the most creative presentation I have heard on the Senate floor. The Senator wonders why we aren't going along with the policies of this administration. Here is why. Here is what our friends on the other side never want to talk about. You will never hear this word leave their lips--debt. They don't want to talk about debt because that is what they have been running up. They have run up the debt of the country by $3 trillion in 5 years. If their policy is followed, they will run it up another $3 trillion, doubling the debt and doing it all before the baby boomers retire, putting us in a deep hole. Here is the record. The debt at the end of the first year of this administration stood at $5.8 trillion, the gross debt of the United States, $5.8 trillion. At the end of this year, the gross debt of the United States is going to be up to $9 trillion because of the policies that our friends on the other side put in place. But you will never hear them talk about that part of the record. You will never hear them talk about where it is headed if we continue with their policies. They are going to add another $3 trillion. You will never hear my colleague say the motion he has presented will cost another $250 billion that is not paid for--not a dime of it. He will not tell you that our budget balances in 2012, but if we adopt his motion, it will not because he does not want to have to be under the constraints of making things add up. I admit, it is tough. It is very hard to actually balance the budget. But our friends have not even had a budget for the last 2 years for the United States of America. Hard to believe, isn't it? They had been in charge of everything, and they didn't have a budget.

Mr. CONRAD. Yes, 3 of the last 5 years there has been no budget.

Mr. CONRAD. No. That was when we had split responsibility and could never reach agreement because we would not go along with running up the debt. I am proud that we would not go along with it. No, we insisted on having budgets that actually balance, which is a novel idea around here. Let me show what the results have been of the fiscal policy that our friends on the other side have engaged in. I have pictured on this chart all the other Presidents of the United States--all 42 of them--because it took all these Presidents pictured 224 years to run up $1 trillion of debt held by foreign countries, and this President has exceeded them. This President, alone, in 6 years, has exceeded all the foreign debt run up by the previous 42 Presidents over 224 years. Now, this is a fiscal record they are proud of? I would not be proud of that. What is the result of this? The result of this is, we owe the Japanese over $600 billion. We now owe the Chinese over $400 billion. We owe the United Kingdom over $100 billion. We owe the oil-exporting countries over $100 billion. We owe the Caribbean banking centers over $60 billion. That is their record. Their record is plunging this country into deeper and deeper debt. Now, let's go back to this question of taxes. I have heard over and over from the other side that somehow I have compared apples to oranges in the OMB scoring and the CBO scoring of the revenue of our proposals. Let me say this to you. I think it is relevant because the President said about his budget--nobody else's claim; it is his statement about his budget--that it would raise $14.826 trillion over the next 5 years. Do you know what my budget will raise over the 5 years? Virtually the identical amount: $14.827 trillion. Now, my friends on the other side say there is going to be an economic calamity because I am raising virtually the identical amount the President called for. I do not think so. Was the President calling for an amount of revenue that would derail the economy? Was he? I do not think the other side would make that assertion. But the President's own statement about what his budget would raise said it was going to raise $14.826 trillion over the next 5 years. My budget raises $14.827 trillion. The one thing I probably should do is reduce our revenue by $1 billion. Then we would have absolutely the same amount of revenue the President said his budget would raise. Now, the point the Senator makes that has validity is that if you use Congressional Budget Office scoring on both, there is a 2-percent difference. I have 2 percent more revenue. Why? Because I actually want to balance the budget. The President's budget does not balance. Mine does. We have 2 percent more revenue, although according to the President's estimates, we have almost identical revenue streams over the 5 years. But under CBO scoring, we have 2 percent more revenue. I say, without hesitation, we can raise that amount of revenue with no tax increase. Why? Let's do the math. The tax gap--that is the difference between what is owed and what is paid--the tax gap is roughly $2 trillion over 5 years. Then we have the tax havens. The Permanent Subcommittee on Investigations said we are losing $100 billion a year there. So $100 billion times the 5 years of this budget is another $500 billion. That is $2.5 trillion of revenue that is out there that could be recovered with no tax increase--none--$2.5 trillion. We would only need about 10 percent of that in my budget--about 10 percent--and you would have all the revenue you need to balance and to provide the middle-class tax relief and to provide the estate tax reform and to provide the increase to veterans health care that so desperately is needed and to provide the kind of investment in education that is critical to secure our future and to provide for law enforcement. The President's budget cuts the COPS on the street program by over 90 percent. Why would we do that? Why would we cut the COPS Program 94 percent? We do not agree with that. We also think that veterans, who have served so gallantly and at such great personal cost, deserve to have the promise kept to them about their health care. Our budget does that. You can do this without any tax increase--none. The Senator from New Hampshire says: Well, the Revenue Commissioner says he can only recapture $20 billion of the $2 trillion that is out there. What is that percentage?

Mr. CONRAD. It is 1 percent. We have a Revenue Commissioner who acknowledges you have $2 trillion out there that is not being collected. He says he can collect 1 percent of it. I would say, we better get a new Revenue Commissioner. In fact, the Revenue Commissioner is leaving. Maybe we can get a Revenue Commissioner who can do better than 1 percent. We ought to get a Revenue Commissioner who can do better than 1 percent. But that is one factor. The tax havens: $100 billion a year that is leaking out the backdoor because of these tax havens. That is not acceptable. We ought to close that door. If we closed that door, if we shut it halfway, we would provide for the revenue here. There are no tax increases in the budget--none. In fact, there is dramatic tax relief. Of course, the reason we left AMT out of my motion is because AMT relief is in our budget. We do not have to put it in my motion. It is in our budget. We provide for 2 years of AMT relief. The President provided for only 1. If you were going to apply the same argument to the President's budget that they are applying to my budget, here is what you would find. You would find the President has a big tax increase in his budget. If you apply their same logic to the President's budget, what you find is the President has a $500 billion tax increase in his budget. He has 1 year of AMT tax relief, which means he does not have any for the 4 following years. That would constitute a tax increase of $328 billion. By our friend's logic, that means the President has a $328 billion tax increase in the alternative minimum tax. For the tax extenders, it is the same way. It provides for just 1 year. So you have $104 billion in the succeeding 4 years he does not provide for. Under their logic, that is a tax increase. His health tax proposal is another $52 billion. If you add it all up, the President has, according to their logic, a $500 billion tax increase. Do you know what the Secretary of the Treasury said when we confronted him with this? He said: That is the law. That is the law. I guess I could give that same flip answer here. I do not do that. Instead, I provide in the budget that we would provide for the middle-class tax relief, we would provide for estate tax reform, and we would pay for it so we can balance this budget and stop the explosion of debt in this country. That is exactly what we should do. I thank the Chair and yield the floor.

Mr. CONRAD. Mr. President, will the Senator yield on this chart?

Mr. CONRAD. The Senator does not want to be able to answer questions on this chart?

Mr. CONRAD. I would look forward to the opportunity to ask a question about that chart.

Mr. CONRAD. Mr. President, I am ready with a question. I say to the Senator, I look at this ``Building a Wall of Taxes'' and the numbers don't match the visual. The Senator's chart shows under our budget that taxes would be 18.6 percent of GDP in 2007 and 18.8 percent of GDP in 2012, and it shows visually this huge increase in taxes. By his own chart, there is almost no difference. I would ask the Senator, how can it be that the Senator shows a chart that makes it look as though there is some big increase in taxes, when by the Senator's own designations, it is 18.6 percent of GDP in 2007 and 18.8 percent in 2012?

Mr. CONRAD. How does this chart accurately depict the change?

Mr. CONRAD. But as the Senator's chart demonstrates, if you adjust that for inflation, what your GDP figure does, there is virtually no difference in tax burden--virtually none. There is 18.6 percent in GDP tax burden in 2007 and 18.8 percent in 2012.

Mr. CONRAD. Mr. President.

Mr. CONRAD. But the Senator can't hand off the floor. This Senator enjoys the first right of recognition, Mr. President.

Mr. CONRAD. If the Senator is yielding, at that point I will ask for recognition to respond. The Senator cannot hand off recognition, as the Senator knows, under the rules of the Senate.

Mr. CONRAD. The Senator cannot hand off recognition from himself to another Senator. That violates the rules of the Senate.

Mr. CONRAD. I thank the Senator. The good thing is we debate strenuously, but we do it in good humor and we like and respect each other. I might say I even extend that to the Senator from Iowa, the esteemed ranking member of the Finance Committee, whom I have grown fond of. Let me say this: We don't have any tax increase in our proposal. The reason we resist the motion of the Senator from New Hampshire is because we would have a budget that would not be in balance. Our budget is in balance by 2012; with his motion it would not be. He has $250 billion of tax expenditures not paid for. In our budget, we provide for the middle-class tax cuts, we provide for estate tax reform, and we say if you want to have additional tax cuts, you can have them, but you have to pay for them. I thank the Senator for his courtesy.

Mr. CONRAD. Mr. President, let me say to my colleague, I know Senator Gregg has another matter he has to attend to, and I have time remaining. We will try to be fair and work things out so people don't get shut out.

Mr. CONRAD. Madam President, it is hard to debate the Senator from Iowa, the ranking member of the Finance Committee, because he has been a really good colleague and he has strong feelings about these issues. In many of these matters, I find myself in agreement with him. I want to say to those who are listening that we don't believe there is any tax increase in our proposal. We believe there is significant fiscal discipline because we are balancing the budget by 2012. There has been no balancing of budgets around here during the 6 years of this administration. They have run up record deficits. They have run up record debt. It is not a matter of speculation, what they have done. If you look at the record of this administration on debt, it is just as clear as it can be. This is what happened on their watch. They have been in control of everything--the House, the Senate, and the White House. This is what has happened. They took the debt of the United States from $5.8 trillion at the end of the President's first year--we don't hold him responsible for the first year because he was operating under the previous administration's budget. But look at what he is responsible for. He has taken this gross debt of the United States from $5.8 trillion to $9 trillion, and if his fiscal policies are pursued the next 5 years, he will have taken the debt to $12 trillion. He will have more than doubled the debt of the United States. One of the major consequences of that is, increasingly, this funding is from abroad. We are dependent upon the kindness of strangers. It took 42 Presidents 224 years to run up a trillion dollars of debt held by foreigners. This President, in just 6 years, has more than doubled that amount. Now, that is a fiscal train wreck, and this administration is responsible, along with his party in the House and the Senate. It is undeniable. They controlled things here, not the Democrats. It wasn't the Democrats who ran up this debt, it was the Republicans. I don't like to be partisan, but the fact is, when I hear the other side claim that we are going to do something, they have already done it. It is not a matter of projection or of conjecture; it is a matter of fact. That is the debt they have run up. We are left to try to clean up the mess. How do you clean up the mess? You spend less money. That is what we have tried to do here. We have controlled spending. We have a chart that shows this. Here is the spending under the budget resolution. We go from 20.5 percent of GDP in 2008 down to 18.8 percent of GDP in 2012. It is by having spending discipline that we get this budget moving in the right direction and we are able to balance the budget by 2012 and we are able to stop this dramatic expansion of the debt. Here is what happens. Under our resolution, the debt, as a percentage of the GDP--which economists say is the best way to measure it--goes down each and every year after 2009. Finally, we get the debt going down instead of jumping up. That is what we should do. That is what is so defective about the Gregg motion. If it is adopted, the budget will not balance in 2012 because he has $250 billion of tax expenditures not paid for. So he is, once again, going to return to the bad old days of borrow and spend, borrow and spend, borrow and spend. Look, the spending on their watch has gone up dramatically. The revenue, as I have shown before, stagnated. All their revenue charts on which they talk about revenue increasing have one big problem: They only show the revenue from 2004 to now. They don't show the revenue in the previous years. Here is a chart here. Spending has gone up, and revenue has been stagnant. Look at all their charts. They only show the revenue from 2004. They want you to forget about these years. Yes, if you look at 2004, revenue has gone up since then. But go back to 2000. Quite a different picture emerges when you give people the whole story, when you give them all the years, not just a few of the years. No, no, no, give them all the years, tell them all the story, give them all the facts. Then you see something quite different. We are just getting back now to the real revenue level we had 6 years ago. Yet spending under our friends has gone up more than 40 percent. The result has been to explode the debt of the United States. We are going in a different direction. We are going to balance this budget, but not if the motion of the Senator from New Hampshire is adopted. Then there will be no balance. Then we will be right back in the same old deficit-and-debt ditch that we have been in for 6 years. Let's climb out of that ditch. Let's stop it. If we are going to have spending on this war, let's pay for it. If we are going to spend money, as we should, to take care of our Nation's veterans, let's pay for it. If we are going to have educational initiatives to assure that America remains the dominant force in the world, let's pay for it. If we are going to insure children in this country so that every child has health insurance, and we should, let's pay for it. That is what our budget is about. It is about the values of the American people. I can tell my colleagues, in my State, they believe if you are going to spend money, you ought to cover the spending and not just put it on the charge card. I thank the Chair and yield the floor. My colleague is here, and I understand there is some time left on the Republican side. I recommend we use that, and then if Senator Cornyn comes, if we are out of time, I will extend time to him so he has time to present his motion.

Mr. CONRAD. Madam President, I would be glad to lend some to the Senator.

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

Mr. CONRAD. Madam President, I am told Senator Cornyn is on his way, but I would ask my colleague, Senator Stabenow, if she would like to take a few minutes at this time to address her motion and then if we could have an agreement that when Senator Cornyn comes, we could interrupt your presentation at a reasonable point in time and then go to the Cornyn motion. That is the order, but I think it would be unwise for us to waste any time here, given the fact we are very close to out of time. Would that be acceptable?

Mr. CONRAD. Why don't we do that, and I thank Senator Stabenow very much for allowing us to proceed in that manner. Motion to Instruct Conferees

Mr. CONRAD. Madam President, let me first thank my colleague for his service on the Budget Committee. He has been a valuable member there. We do not always agree, but he has been a very constructive member of the Budget Committee. He comes with a point of view and he does his homework. All of us appreciate that, I and the other members of the committee. I thank the Senator from Texas. Let me say it would be fine with me that we adopt this motion because there is no contemplation in this budget resolution of a tax rate increase. There just is not. I want to make that clear. We do have a problem. I want to be very direct with colleagues. This motion will not survive the conference committee. It will not. It has nothing to do with its merits. It has to do with the procedural ramifications of bringing this back from the conference. We have been informed by the Parliamentarian, if the conference agreement reflects this motion, the budget resolution would be in danger of losing its privileged status on the floor. That would be a very serious matter for all of us. That would be a serious matter for this institution. We have a hard enough time getting a budget. If it were to lose its privileged status on the floor, I suggest to my colleague, we would never reach conclusion on a budget. That is in none of our interests. It is not in the interests of the country, it is not in the interests of the Senate, it is not in the interests of the House. I regret that is the reality we confront, but it is. I don't want anybody to be under any misapprehension about that. It is fine with me if we adopt that as an instruction to the conferees because it reflects the will of the Senate. We voted very clearly: 63 votes, as the Senator has indicated. I say to my colleagues, there is absolutely no intention in this budget of increasing tax rates, which is what the Senator is trying to guard against. But I do have to emphasize if we were to bring it back from conference, we have been informed that would put at risk the privileged nature of the budget resolution, and we simply cannot do that. If we did that, we truly will never agree on a budget here. Does the Senator seek more time?

Mr. CONRAD. Even in the lighted room.

Mr. CONRAD. Madam President, let me say to the Senator, I know he doesn't intend to impugn my motives. I hope that impression hasn't been left, because I operated in absolute good faith in the committee. I told him his motion would do no harm because there was no intention of increasing rates in this budget resolution. There truly is not. I only learned subsequent to that that there was a procedural problem. As soon as I learned, I think the Senator will acknowledge, I came to him on the floor, some weeks ago, and told him of what we had learned and urged him to send his staff to the Parliamentarian to verify that what I was saying was in fact the case. I have been in communication with him subsequent to that, to confirm that he had heard the same thing. In fact, he told me that on the floor late this afternoon. I regret that I told him it would do no harm. I absolutely believed that was the case when I told the Senator that. It was only subsequently that I learned from my staff that the Parliamentarian advised us of that. I should have known it. In the back of my mind I was worried about the Budget Committee overstepping its bounds. It is very important for people to understand, we tell the Finance Committee how much money to raise. We do not have the authority to tell them how. Unfortunately, the motion of the Senator crosses that line. We tell the Appropriations Committee how much money they have to spend. We do not have the authority to tell them how to spend it. If we exceed our authority, there are consequences. I must say I was concerned at the time of the Senator's amendment in the committee that maybe we were crossing that line, and in fact it turns out we were. That is the fact of the matter. That is what we confront here. I say to the Senator, I hope he would acknowledge I have tried to communicate with him, as soon as I knew it, that these are the facts we confront.

Mr. CONRAD. Madam President, I thank the Senator very much for that. I say I have so many regrets, as we go through this budget process, that we do not have authority that one might assume the Budget Committee does. But we simply do not. We are in this role of telling the Finance Committee how much money to raise, but we cannot tell them how to do it. We tell the appropriators how much money they spend, but we do not have the authority, as much as we might like it, to tell them how to spend it. If we cross that line, there are real consequences. In any event, I very much appreciate the Senator from Texas.