Kent Conrad

Mr. CONRAD

Mr. CONRAD. I ask the Senator, is it not a curious thing that the President, in his proposal on the supplemental appropriations bill, has a plan to rebuild Iraq but has no plan to rebuild parts of America that have been devastated by disaster? Is that not a curious thing?

Mr. CONRAD. And isn't it the case, I ask the Senator from California----

Mr. CONRAD. I ask the Senator, in conclusion, isn't it the case that the history in the Senate has been that emergency matters, of whatever type--whether they flow from a war or whether they flow from natural disasters--in this country are dealt with in a supplemental appropriations bill? There is nothing new in this at all. Isn't that the case?

Mr. CONRAD. I think that is clearly the case. I have served here--I am in my 21st year. This has always been the case with supplemental appropriations bills, that disasters are dealt with in this manner. Here we have a case where we had damage from Katrina that is addressed in this bill; where we have had devastating natural disasters affecting agricultural producers, whether it was drought or flooding or freeze, that are dealt with in this supplemental appropriations bill, which is the regular order, is it not, in the Senate?

Mr. CONRAD

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Mr. President, this week, the Senate will once again have the opportunity to demonstrate its support for America's family farmers and ranchers by improving emergency agricultural disaster assistance as part of the supplemental appropriations bill. For over a year, I, along with Senate colleagues from both sides of the aisle, have attempted repeatedly to convince the Congress of the United States and this administration to provide desperately needed disaster assistance. As part of the hurricane supplemental last year, the Senate approved an agricultural disaster package. That measure was dropped in conference as a result of opposition from the administration. The need for this legislation has only been made more compelling by the severe disasters that have hit California, Colorado, Kansas, Nebraska, New Mexico, and Oklahoma during the final weeks of 2006. In my own home State of North Dakota, in 2005, we had a disaster that was devastating to thousands of farm and ranch families. This is what we saw across North Dakota--flooded lands, over a million acres of land that could not even be planted and another million acres of land that was drowned out. Then, irony of ironies, the next year we had a devastating drought--the third worst drought in this Nation's entire history, hitting not only North Dakota but right down the heartland of America. This is a farm field near my home, in Burleigh County. I live in Bismarck. This is a farm field in that same county, and you can see almost nothing growing. Here is the U.S. Drought Monitor, and they determine on a scientific basis the effect of drought across America. This is from July 25, 2006, and you can see drought right down the heartland of America--in our case, exceptional drought. That is the dark brown right on the border between North Dakota and South Dakota--exceptional drought. The next category going down the scale, extreme drought, an even broader area between the two States. We also see exceptional and extreme droughts in these parts of the country, and then severe drought. That is the tan. Virtually all of North Dakota had exceptional, extreme, and severe drought conditions. And, of course, not just North Dakota, it was right down the heartland of the country. This is a headline from July 30, 2006, from the Grand Forks Herald: ``Dakotas the Epicenter of a Drought-Stricken Nation. More than 60 percent of the United States in drought.'' This has been an absolutely bizarre set of circumstances: One year, extreme flooding; the next year, extreme drought. But that is the reality of what we have confronted, and if assistance is not provided, thousands of farm families will be forced off the land. The President's chief economic adviser was in my office to visit me on another matter at the same time there were independent bankers from my State there to talk to me about agricultural assistance--bankers talking to me about the desperate need for drought assistance. They told me and told the President's chief economic adviser that if assistance were not forthcoming, they would lose 5 to 10 percent of their clients. These are farm and ranch families who work hard, who love this country, who work the land, and who are some of the most independent people you would ever want to meet. The last thing they want is a government handout, but if they do not have a helping hand extended to them, they are going to be out of business. That shouldn't be the result. We should provide the very basic assistance we have provided in other times in other parts of the country to those who have been hard hit. Let me make certain that people understand. To get any assistance, producers will need to demonstrate they have had a 35-percent loss, and they will get no help for that first 35 percent of loss. That is the floor. They have to have lost 35 percent before they get anything, and then the assistance will apply to the losses beyond 35 percent. Nobody is getting rich on this program. Some have suggested this bill will result in farmers becoming more than whole because of crop insurance. That is simply incorrect. Under the provisions, a producer receiving disaster assistance cannot recover more than 95 percent of the expected value of the crop, after both crop insurance and the expected market income from the crop have been deducted. This is desperately needed. It is done in a way that is fair and balanced and prevents abuse. I hope my colleagues will support it. I thank the Chair, and I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, first, I thank the Chaplain for the most excellent prayer that he offered today. I think it set the right tone for today's discussions. I hope very much that while we may disagree strenuously, we can do so in a civil way. I thank especially the ranking member, Senator Gregg, for the way he has conducted this debate on the other side throughout. As is always the case with him, it has been thoroughly professional. It has set an excellent tone. We have vigorous disagreements on policy from time to time, but there are many areas where we actually agree. With him in leadership, it has always been done in a professional way. We especially appreciate the cooperation from all of our colleagues and especially from the ranking member and his outstanding staff. The budget, as it stands at this moment, takes us in a new direction. It takes us back to fiscal responsibility. It takes us toward a balanced budget by 2012. Here is where the budget stands as of the latest numbers that we have after action last night. Every year of the 5-year budget the deficits will be reduced until we are in balance in 2012, albeit just barely. The next chart. The debt under the budget resolution, the gross debt of the United States as a percentage of GDP, will finally start to head down instead of increasing year after year after year. Under this budget resolution, the gross debt of the United States as a share of GDP will start going down in 2009. We will see a slight reduction in 2010. It is somewhat improved, in terms of reduction, in 2011 and 2012. Spending under this budget resolution is going down as a share of gross domestic product--from 20.5 percent in 2008 down to 18.8 percent in 2012. So we have spending going in the right direction. The budget resolution is only slightly above baseline for nondefense discretionary funding. The baseline is $438.8 billion. The spending in the 2008 budget resolution is $445 billion, a 1.4-percent difference. That is spending in dollar terms. I was talking about spending previously as a share of GDP. The previous chart showed spending as a share of GDP actually going down. We do have a number of very significant priorities addressed in this budget. First and foremost is children's health care. We have up to $50 billion allocated over 5 years for children's health care to make possible the coverage for every child who would be eligible in the country. That is 25 times as much as in the President's budget for that same period. We have also improved on the President's education numbers by 2008. In 2008, the budget resolution provides $62.3 billion compared to the President's budget for education of $56.2 billion for that year. Another key priority is veterans health care. I am especially proud of what we have done. We have matched, or exceeded, the independent budget prepared by the Nation's veterans organizations. We have matched or exceeded it in every single category except construction, where the Veterans' Affairs Committee tells us they could not spend the amount of money in the independent budget because they simply could not let the contracts in time. In comparison to the President, we are at $43.1 billion for veterans funded, compared to the President's number of $39.6 billion. On the alternative minimum tax, the old millionaires' tax that is rapidly becoming a middle-class tax trap, we prevent the number of people being swept up into the AMT from increasing from 3.8 million last year. If we didn't take action, that would increase to over 23 million in 2007. We prevent that increase from 3.8 million to over 23 million. Similarly, in 2008, we prevent an increase to over 25 million people--largely the middle class--and to the upper side of the middle class from being caught up in the alternative minimum tax. That, by the way, is completely offset. Key priorities are the child health and family tax relief amendment. There is $15 billion in the budget resolution itself for children's health care. There is up to $35 billion in a deficit-neutral reserve fund. We also now in the resolution, after the Baucus amendment, extend middle-class tax relief. We fully provide for marriage penalty tax relief, child tax credit, and the 10-percent bracket. We also provide for estate tax reform. Members will recall that we have this anomalous situation where we are going to go from $3.5 million of exemption per person under the estate tax in 2009--in 2011 it goes back to a million. We prevent that from occurring. So under the budget resolution, a couple could shield $7 million in assets without paying a penny of tax, and it is indexed for inflation. The revenues in this resolution now, compared to the President's, are depicted on this chart. The green line is our revenues; the red line is the President's revenues. There is a difference of 1.8 percent now. Seen in a different way, if you look back at what the President initially proposed for revenue, the President proposed $14.826 trillion of revenue. We have in this resolution almost the identical amount; we have $14.827 trillion. So let me make clear that there is almost no difference in the revenue in this proposal compared to what the President initially proposed. Where would we get that slight difference in revenue? In the first place, there is no tax increase. We don't propose any tax increase in this budget resolution at all. I read some of the stories saying we have all these tax increases. We do not. We do believe more revenue can be gained. The first place to go is the tax gap. That is the difference between what is owed and what is paid. In 2001 alone, the Internal Revenue Service tells us the tax gap was $345 billion. Also, offshore tax havens. I have shown this picture many times. There is a five-story building in the Cayman Islands that is the home to 12,748 companies. Mr. President, this is a tax dodge. There are not over 12,000 companies doing business out of this building. They are doing monkey business out of this building. They are engaged in a massive tax evasion. This is the kind of thing we ought to shut down. Another committee of Congress has told us that there is $100 billion a year--over $500 billion over 5 years--being lost to the U.S. Treasury to these offshore tax haven scams. We suggest cutting that off, stopping it, recovering that revenue. In fact, that would more than cover, by a substantial amount, the revenue difference between us and what is in the President's proposal. Here is another example. This is a picture of a sewer system in Europe. What does a sewer system in Europe have to do with the budget of the United States? Unfortunately, a lot because wealthy investors and companies bought this sewer system in Europe, depreciated it on the books in the United States to reduce their tax in America, and then they leased the sewer system back to the European city that built it in the first place. There are hundreds of billions of dollars involved in these tax scams. It is growing, and it is a cancer that has to be stopped. This budget resolution also makes a beginning at addressing our long- term fiscal challenges. We have $15 billion in Medicare savings. We have major program initiatives to crack down on waste, fraud, and abuse. We have a requirement that tax cuts and new mandatory spending be paid for with a tough pay-go provision. We have a long-term deficit increase point of order. We have a ``save Social Security first'' point of order. We have a health information technology reserve fund. The Rand Corporation told us that alone could save $81 billion a year. Finally, we have a comparative effectiveness reserve fund so that we go out and look at what are the most effective technologies and treatments in the medical area that work in one part of the country but have not yet been applied elsewhere. Health experts tell us massive savings could come from that initiative. Let me end as I began. This budget resolution takes us in a new direction, a better direction. This is a budget resolution which restores fiscal discipline. It will balance the books by 2012; it will meet the high-priority needs of the United States; it fully funds the President's defense request and his request for war costs; it has major tax reductions for those in the middle class so that we assure that middle-class tax breaks continue. It also provides for estate tax reform and, at the same time, begins to address the long-term fiscal challenges facing our Nation. I don't assert that this is a perfect budget. If I had a totally free hand, I am certain it would be different. But at the end of the day, the test for us is, can we write a budget for our country? In 3 of the last 5 years, there has not been a budget for the United States of America. Let me repeat that. In 3 of the last 5 years, there has not been a budget for the United States. It is our obligation and our responsibility to put a budget in place to begin the difficult task of balancing the books while meeting the priority needs of our Nation. I thank the Chair and yield the floor.

Mr. CONRAD. Mr. President, might I say the Senator now has hurt my feelings. Would the Senator's staff put up the caveman chart? That now has hurt my feelings. I don't know how I am going to be able to get through the day after the caveman chart. I don't think that is even a good likeness of the Senator from North Dakota.

Mr. CONRAD. OK. Mr. President, I think we now need to establish the order of the votes, or at least the first several votes, and for that purpose, I suggest the absence of a quorum.

Mr. CONRAD. Mr. President, I will not object. This, frankly, is a complicated amendment. I am not sure I fully understand all the implications or ramifications of it, but the basic notion that we try to make certain that reconciliation is used for deficit reduction is one I embrace and, in fact, one that is in the budget resolution before us. We have a requirement in this budget resolution that reconciliation only be used for deficit reduction. The amendment of the Senator from New Hampshire is an attempt to send that signal even more clearly, if I understand it correctly, and the Senator can correct me if I misinterpret it. That is my interpretation, and on that basis I would accept the amendment.

Mr. CONRAD. Maybe we should explain what the term means. Reconciliation is a special process here in the Senate that gets around the regular order. It creates a superhighway to pass something. Reconciliation was designed and implemented to permit a fast-track basis for reducing deficits. Unfortunately, it can be abused and it has been abused in the past and used to actually increase deficits. That was never the intention. We have prevented that from occurring in the budget resolution. So this is an attempt to prevent something that would have minimal deficit reduction from being used as a stalking-horse for a significant expansion of spending. On that basis, I accept the amendment.

Mr. CONRAD. Mr. President, the Senator from Arkansas has an amendment, but do we have an order that indicates on every amendment that there be 2 minutes evenly divided and that there be no second degrees?

Mr. CONRAD. And do we have an agreement that there be no second degrees, but that we would reserve the right, based on the managers' decision, to have side-by-sides in any case where that is required? Do we have that as an order?

Mr. CONRAD. Mr. President, I ask unanimous consent that both those provisions be in order, that we have 2 minutes of debate equally divided on a vote, that there be no second degrees, that at the discretion of the managers there be the opportunity for side-by-sides, and that we order rollcall votes at this juncture on all those votes that are presented.

Mr. CONRAD. Mr. President, might I inquire of the Senator whether he will accept a voice vote?

Mr. CONRAD. Mr. President, I urge my colleagues to vote aye on the Brownback amendment.

Mr. CONRAD. Mr. President, I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 623

Mr. CONRAD. Mr. President, I send an amendment to the desk for immediate consideration. This is a technical amendment, agreed to by both sides.

Mr. CONRAD. Mr. President, this is to safeguard minority rights on a conference report. It was suggested by Senator Gregg and his staff. It is very well taken. It should be adopted.

Mr. CONRAD. Mr. President, I move to reconsider the vote and I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 513

Mr. CONRAD. Might I inquire from the Senator how this works? Perhaps this is something we could accept, but I need to understand how it works. Could the Senator tell me, as I looked at the amendment, on the bottom of the first page there is a blank, at least in the copy I have. It says, ``For deposit of an additional amount into the account established under section 3113(d) of title 31, United States Code, to reduce the public debt''--and then there is a blank. Is that filled in on the amendment of the Senator?

Mr. CONRAD. I see.

Mr. CONRAD. Mr. President, I am constrained to resist this amendment because, as I understand it, what it does is, if the Appropriations Committee would cut in a certain area they would then be prevented from using that money in some other perhaps higher priority area. If there were savings in one area of the budget and Homeland Security needed additional funding, they would not be able to transfer the money. On that basis I urge my colleagues to vote no.

Mr. CONRAD. Mr. President, that is not my reading of how this amendment would function. I wish I had more time to analyze it. This is the first time I have seen it so I am in a very awkward position here. That is my reading of the amendment, so I have no alternative but to ask my colleagues to oppose it.

Mr. CONRAD. The yeas and nays have already been ordered. I ask the yeas and nays be ordered on all these amendments so we don't have to go through that every time.