Mike Crapo

Mr. CRAPO

Mr. CRAPO. I believe what I said was that, as I had been here over 10 years, we debated that proposal several times and every time it has been debated it has been attacked as a tax cut for the wealthy. I can tell you from my own personal experience, that is the case. In fact, today it is part of the proposal being talked about and it is being attacked as a tax cut for the wealthy.

Mr. CRAPO. Will the Senator from North Dakota yield?

Mr. CRAPO. The point I was making is that the first thing the President was talking about doing was accelerating the tax relief that was implemented in 2001, tax relief which was attacked then for being a tax cut on the wealthy but certainly was not so. The other thing the President has proposed is to make all of that tax relief permanent. That would be making the elimination of the marriage tax penalty permanent, making the elimination of the estate tax permanent, making the increase in the expansion of the 10-percent bracket and the other tax relief provided for all taxpayers in America permanent. These proposals benefit every taxpayer in America. On a percentage basis, they favor those in the lower income brackets far more than those in the upper income brackets. The bottom line is, whether you use percentages or numbers, people can play with the numbers and say this is a tax cut for wealthy or middle income or whatever, but on a percentage basis these tax relief proposals benefit those in the lower income tax brackets more than any other bracket. In order to facilitate our effort to conclude this debate at the 4 p.m. time, I will forego the remainder of my comments. I conclude by pointing out this is another angle on the traditional debate we have virtually every year between those who want to see spending maintained and increased and those who want to see the Federal budget controlled and implement tax relief. The American people can see through these arguments. The American people understand the value and stimulus tax relief can provide to the economy of this Nation at a time when our economy dramatically needs the right kind of fiscal policy to be adopted by this Congress. I yield the floor.

Mr. CRAPO. We will take a look at that and see why the vote was different.

Mr. CRAPO. Will the Senator yield?

Mr. CRAPO. I do not expect to go more than another 5 minutes.

Mr. CRAPO. Mr. President, I ask unanimous consent that the vote on the adoption of the pending budget conference report occur at 4 p.m. today, with the time until then divided equally for debate.

Mr. CRAPO. I am not authorized to make that agreement at this point. Should I forego making the unanimous consent request?

Mr. CRAPO

Mr. CRAPO. Mr. President, I rise to introduce the Water Adjudication Fee Fairness Act. This bill would require the Federal Government to pay the same filing fees and costs associated with state water rights adjudications as is currently required of States and private parties. To establish relative rights to water--water that is the lifeblood of many States, particularly in the West--States must conduct lengthy, complicated, and expensive proceedings in water rights' adjudications. In 1952, Congress recognized the necessity and benefit of requiring Federal claims to be adjudicated in these State proceedings by adopting the McCarran Amendment. The McCarran Amendment waives the sovereign immunity of the United States and requires the Federal Government to submit to State court jurisdiction and to file water rights' claims in State general adjudication proceedings. These Federal claims are typically among the most complicated and largest of claims in State adjudications, and Federal agencies are often the primary beneficiary of adjudication proceedings where states officially quantify and record their water rights. However, in 1992, the United States Supreme Court held that, under existing law, the U.S. need not pay fees for processing Federal claims. When the United States does not pay a proportionate share of the costs associated with adjudications, the burden of funding the proceedings unfairly shifts to other water users and often delays completion of the adjudications by diminishing the resources necessary to complete them. Delays in completing adjudications result in the inability to protect private and public property interests or determine how much unappropriated water may remain to satisfy important environmental and economic development priorities. Additionally, because they are not subject to fees and costs like other water users in the adjudication, Federal agencies can file questionable claims without facing court costs, inflating the number of their claims for future negotiation purposes. This creates an unlevel playing field favoring the Federal agencies and places a further financial and resources burden on the system. I recognize the Federal Government has a legitimate right to some water rights; however, the Federal Government should play by the same rules as the States and other private users. The Water Adjudication Fee Fairness Act is legislation that remedies this situation by subjecting the United States, when party to a general adjudication, to the same fees and costs as State and private users in water rights adjudications. This measure has the full support of the Western States Water Council and the Western Governor's Association. I ask my colleagues to join me in supporting water users, taxpayers, the States, and welcome their co- sponsorship.

Mr. CRAPO

Mr. CRAPO. Mr. President, I rise to introduce the Water Adjudication Fee Fairness Act. This bill would require the Federal Government to pay the same filing fees and costs associated with state water rights adjudications as is currently required of States and private parties. To establish relative rights to water--water that is the lifeblood of many States, particularly in the West--States must conduct lengthy, complicated, and expensive proceedings in water rights' adjudications. In 1952, Congress recognized the necessity and benefit of requiring Federal claims to be adjudicated in these State proceedings by adopting the McCarran Amendment. The McCarran Amendment waives the sovereign immunity of the United States and requires the Federal Government to submit to State court jurisdiction and to file water rights' claims in State general adjudication proceedings. These Federal claims are typically among the most complicated and largest of claims in State adjudications, and Federal agencies are often the primary beneficiary of adjudication proceedings where states officially quantify and record their water rights. However, in 1992, the United States Supreme Court held that, under existing law, the U.S. need not pay fees for processing Federal claims. When the United States does not pay a proportionate share of the costs associated with adjudications, the burden of funding the proceedings unfairly shifts to other water users and often delays completion of the adjudications by diminishing the resources necessary to complete them. Delays in completing adjudications result in the inability to protect private and public property interests or determine how much unappropriated water may remain to satisfy important environmental and economic development priorities. Additionally, because they are not subject to fees and costs like other water users in the adjudication, Federal agencies can file questionable claims without facing court costs, inflating the number of their claims for future negotiation purposes. This creates an unlevel playing field favoring the Federal agencies and places a further financial and resources burden on the system. I recognize the Federal Government has a legitimate right to some water rights; however, the Federal Government should play by the same rules as the States and other private users. The Water Adjudication Fee Fairness Act is legislation that remedies this situation by subjecting the United States, when party to a general adjudication, to the same fees and costs as State and private users in water rights adjudications. This measure has the full support of the Western States Water Council and the Western Governor's Association. I ask my colleagues to join me in supporting water users, taxpayers, the States, and welcome their co- sponsorship.

Mr. CRAPO

Mr. CRAPO. Mr. President, I appreciate the opportunity to address the Senate today with my colleague from Texas and others who have joined us and will in the future to take the time set aside by our leadership to talk about our troops and to give them the thanks of a grateful Nation as they fight in Iraq to protect our freedom. Today I want to begin by sharing another vignette, this one is from the Army Times written by Robert Hodierne and Jane McHugh. It is about a heroic act that occurred in Iraq during some of the early days of the fighting. This is a picture with the wrong name on it. I will explain. When it was first reported, it said ``Joseph DeWitt.'' But after further evaluation--this picture made it on the front page of a number of newspapers around the country, and people started checking into it. It was actually Joseph P. Dwyer, age 26, who is still in the field in Iraq. A few days ago, when this report I will discuss was written, he was still 80 miles outside of Baghdad with his division, the 3rd Infantry. What we see is obvious. It is one of our soldiers carrying a young Iraqi boy to safety. But there is a story behind this picture that illustrates the bravery and commitment of our troops in Iraq, not just to cause a regime change and to overthrow Saddam Hussein and restore peace and freedom in Iraq and peace and freedom in the world, but also to do so in a way that causes the least amount of collateral damage. I will stop before I go into this vignette to make a point. There are many nations in the world that, when war begins, would not pay attention to the collateral damage, the injuries of innocent civilians. Saddam Hussein, as we know, has killed tens of thousands of innocent people just for the accomplishment of an objective of war. But our Nation, as we conduct this battle, is conducting it in a way that literally puts our men and women in the military at greater risk because of the decision to try to reduce the risk presented by the war to those who are innocent. I think it is important for us to note that our men and women in the armed services are incurring this greater risk because of our commitment and theirs to make sure that we do not injure one unnecessary person as we conduct this war. You can see here a young grimy soldier in full battle gear. You can see the level of concern on his face as he carries this wounded young Iraqi boy to safety. What is the story behind this picture? As I have indicated, Joseph Dwyer is 26, and he is still with the 3rd Infantry Division in Iraq. Until just a few days ago, he didn't really have a clue how famous he was. His name was misidentified in the first prints of the picture. By the time he was identified, his picture was one that people around the world had seen. When he was told about it, his reaction was that he laughed out loud. For a few moments, he could not stop laughing. He said afterward that he was both amused and embarrassed at the notoriety he had achieved. ``Really, I was just one of a group of guys. I wasn't standing out more than anyone else,'' he said during this telephone conversation during some rare down time. Dwyer has lived for the past 6 years in Wagram, NC, where his parents moved after his father retired as a New York transit policeman. This young man's family has been in law enforcement. His father is a retired policeman. He grew up in Mt. Sinai on New York's Long Island. His three older brothers are New York City policemen. If you think about that and remember 9/11, he had three brothers who were New York City policemen when he found out the news about what was happening on 9/11. None of his brothers was lost on 9/11, but one of them lost a partner on 9/11. That is how close the casualties came to his personal family. He said: ``I mean everybody lost someone, a lot of good people.'' He said he was sure for a long time that he had lost someone too. He believed one of his brothers had probably been killed. He said: ``I thought he was gone.'' But when he talked to his brother on the night of September 11 and learned he was safe, Dwyer said: ``I knew I had to do something.'' So 2 days later he enlisted in the Army and became a medic. He said: ``It was just what I could do at the time.'' People from across America jumped in and did what they could after 9/ 11. This young man joined the Army to help protect and defend the United States interests and is now doing that in Iraq. On Tuesday morning, when the now-famous image of Dwyer was taken, his unit, the 3rd Squadron of the 7th Cavalry Regiment, had been ambushed repeatedly the night before as they worked their way along the north side of the Euphrates River. Just as the Sun was rising, they were ambushed again by Iraqi troops firing from tree lines on both sides of the road. The Americans fired back with everything they had and called in airstrikes to help them. In the middle of this firefight, an Iraqi family was caught in the crossfire. When the fighting stopped, the father of the family came running out screaming that his family needed help. Dwyer says: ``It came over that there was a family that had some injuries. We went down there. It was kind of hectic at first. . . . We didn't know what was going on. Who was friendly and who wasn't.'' Here is an example of how our troops are putting themselves in harm's way because of their interest in making sure that we reduce the casualties to innocent people. ``We didn't want to get too close to the village, knowing that there could be possible enemy there,'' he went on. ``We saw him with the child. He came running out to where we had the hospital set up.'' Then he and some other soldiers, guns at the ready, bolted from their cover to help. Dwyer reached the father and grabbed his son from him, cradling the young boy in a protective embrace as he raced back to safer ground. That is when Army Times photographer Warren Zinn snapped this picture. The boy, who is about 4 years old, ``grabbed right onto me, that was the weird thing,'' Dwyer said. ``The kid was doing all right. I could feel him breathing real hard, and I was just carrying him and he didn't cry one bit and you know he was a cute little kid. He was scared, though, you could tell. You know, for the father to trust us to take his child over and know that we would take care of him, maybe it's just me being optimistic, but I think it was a good feeling knowing he trusted us to take his child. It was a little kid. I have little nieces and nephews back home. . . . It was just a kid, it wasn't an enemy. This is what I signed up to do, to help people.'' That day was the first time Dwyer treated any wounded. The little boy had a broken left leg, but Dwyer says he is going to make a quick recovery. Though gratifying as the encounter may have been, it left him with lingering concerns. He wishes he could talk to the family. ``I wonder how they felt about us,'' he said. ``I mean, if I was in their position and this was going on, I'd be mad at me, you know, for being here. I don't know. I wouldn't mind being able to talk to him, that's for sure.'' Dwyer nevertheless is glad to be in Iraq. ``I know that people are going to be better for it. The whole world will be. I hope being here is positive because we are a caring group of people out here. If they find out, that would be great. Maybe they'd stop shooting.'' Mr. President, here we have one more specific example of an act of bravery, heroism, which is happening time and time again in Iraq. As we see the scenes on TV of the bombs exploding and the troops moving, we think about our troops being engaged in battle, but we don't think about the fact that, as they are engaged in battle, they are also doing everything they can to help those who are innocent, who didn't start or cause this war, to be protected from harm's way. I conclude my remarks by again expressing on my behalf, and I believe on behalf of the entire Senate and the Congress, and, frankly, the United States people, our thanks to our men and women in the armed services for the service they are giving. I spoke in the Chamber a few days ago about an Idahoan who has given the extreme sacrifice. He lost his life in this battle. We will have, unfortunately, more stories like that. As a nation, we give our thoughts and our prayers and our grateful thanks to the men and women in our Armed Forces who are putting their lives on the line for our freedom. Mr. President, I yield the remainder of my time to the Senator from Texas.

Mr. CRAPO

Mr. CRAPO. Madam President, I also stand with the Senator from Texas, the Senator from Arkansas, the Senator from Nebraska--really, all the Senators--to take this opportunity to share our feelings about the support we have for our troops while they are engaged in this difficult battle in Iraq. While our Nation fights the war on terrorism, taking on even more demanding and dangerous tasks, and is now actually headed into heated battle in the Arabian Peninsula, it is important that we remember just how important the United States military is to preserving and protecting our national security. Each of us in the Senate and those we represent throughout the country owe a sincere debt of gratitude to the brave men and women in uniform. Our soldiers, sailors, and marines serve us with unselfish courage and epitomize the term ``hero.'' I will point out another brave group of men and women serving in harm's way. These are the thousands of our guardsmen and reservists who have been called to duty here in America and abroad. On a sad note, I would like to share with my colleagues my heartfelt sadness over the death of Air National Guardsman Major Gregory Stone, from Idaho, who was killed on March 23. Major Stone, serving as liaison with the Army's 101st Airborne Division in Kuwait, was one of the victims of the grenade attack on the officers' tents at Camp Pennsylvania. Major Stone leaves behind two sons, Evan, age 11, and Joshua, age 7, and an entire community, State, and Nation in grief. Major Stone's father said: My son died to allow the guy who killed him to believe in what he believed. As we know right now, it appears it is very possible that the cowardly attack that killed Major Stone may have been perpetrated by another fellow soldier. That is being investigated at the moment. Major Stone, an Oregon native, was one of six Idaho Air National Guard members working as liaisons with the Army's 101st Airborne Division in Kuwait. He worked for 2 years at the Air Expeditionary Force Battlelab in Mountain Home, ID, as the lab's B-1 bomber expert. Since September, he was an independent assessor with the company that does contract work for the lab. One of his colleagues, MAJ Thomas G. Westall, U.S. Air Force, Retired, said: He paid the highest sacrifice for being a good soldier. Major Stone is just one of those brave Americans who will be called upon to pay the highest sacrifice for our freedom. I commend him and all of those in our military who are putting their lives on the line to protect our freedom, and I express the gratitude of a grateful country for their service. Idahoans, as all Americans have a long-standing tradition of service in our Nation's Armed Forces. As each of my colleagues here can attest, our States have called forward their best and bravest to protect our security and preserve our liberties. Idaho has a contingent of guardsmen, reservists, and mainline forces in the Persian Gulf and engaged in the war on terrorism. The Gunfighters of Mountain Home Air Force Base are among the best trained forces in our military because they train at the world-class ordnance training facility in Southwest Idaho. Mountain Home offers the Air Force one of the best training bases in the world. With its good weather and unobstructed air space, our pilots can train almost year- round. As Air Force pilots from around the country can attest, the training range in Idaho keeps them on the cutting edge of combat effectiveness. The Idaho Reserve and National Guard provide another vital military presence in our State. These citizen soldiers provide a critical service to our State and to our Nation. The Idaho Army National Guard, with 28 units throughout the State, has 3,500 members and, during the past year, has provided personnel for active duty service throughout the world. Very recently, elements of the Idaho Army National Guard completed an extended rotation in the Balkans. The Air Guard, which has its headquarters at Gowen Field, has seen its share of active duty as well, most recently being called to service following the attacks on the World Trade Center and the Pentagon. The Air Guard's equipment includes C-130 transports, as well as the very capable close in support fighter, the A-10. Units of the Army and Navy Reserve are also very active in Idaho. The Army Reserve has 11 units in the State with 750 personnel assigned while the Navy Reserve has approximately 250 members. Many reservists, from a host of specialities and backgrounds, ranging from civil affairs to logistics, have been called to active duty during the past year. Each Idahoan in uniform has a demanding responsibility, and I am grateful for all they do. And right now, over 100,000 reservists nationwide have been placed on active service. For the foreseeable future, our Armed Forces will be dealing with more and more demands. We are facing uncertainly in the Persian Gulf, and threats worldwide continue to loom. It will be difficult and tough duty for these brave people, but I have complete confidence in their ability to meet the tasks ahead. And I also know, that Idaho, with its long tradition of military service, will continue to play an important role in the defense of our Nation. Many Americans have expressed their heartfelt appreciation of our troops. It is indeed tragic that the lives of many men and women are now being put in harm's way because Iraqi leaders would not to conform to international resolution that would have brought a peaceful end to this conflict. Sadly, we are seeing Iraq refuse to voluntarily end its support of terrorism and stop the threat from the weapons of mass destruction Iraq possesses. My heart and my prayers are with our troops and their families. This is a time for support of all of those brave Americans being put at risk to defend our national security. We will win this conflict and end the multiple threats of weapons, terrorism, and continued instability in the Middle East the Iraqi dictator represents. Every generation of Americans has faced the need to protect our freedoms, and we live in a new age where innocent Americans have died at the hands of terrorists. Our President has made the difficult decision that our national security is on the line and I fully support his decision. Our President and the men and women in our Armed Forces will protect our freedom and continue to make out nation secure. We owe them our support, our prayers, and our hopes that this conflict is over as soon as possible. There is much more I could say, but I conclude my remarks by, once again, coming back to the importance that I place on this Senate giving time each day, as we are now doing, to commend the men and women in uniform, whether they be our active military, or our guardsmen or reservists, for putting their lives on the line for our freedom. Every generation in America has had the opportunity, in some context or another, to defend our freedom. And these brave men and women are being called upon to risk the greatest sacrifice so we in America and people throughout the globe can continue to have the freedoms which we cherish so greatly. I reserve the remainder of our time.

Mr. CRAPO

Mr. CRAPO. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. CRAPO. Mr. President, I also appreciate Senator Sarbanes and the other Senators in the Chamber who are so involved in working on this critical issue. Our water infrastructure needs in this Nation are crying out for attention. This is one of those areas we have to address in the budget. We have the kind of need that requires us to be focused and unified. I am very pleased we were able to come together on an amendment today that will help us begin the process of addressing the crying need in our Nation's infrastructure for water systems. I thank the Chair.

Mr. CRAPO

Mr. CRAPO. Mr. President, I appreciate the opportunity to discuss this important issue. This week we are going to be discussing a number of critical issues, as has already been mentioned by a number of those who have spoken. It is expected that the possibility of war with Iraq will come closer, if not become a reality, sometime in the near future. At the same time, we are debating probably the biggest economic issue, and the biggest issue for the management of this country, that the Senate will deal with this year, as we put together the budget resolution. In that context, I will basically give a brief overview of how we got to where we are, where it is that we are, and the decisions we will be making. Many people will remember that a few short years ago we were talking about major surpluses across the board and for as far as we could see into the future. In fact, I have in front of me a projection that was based back in January of 2001, which estimated that in this budget year that we are working on right now, the 2004 budget year, the surplus was projected to be around $396 billion. This same sheet shows what the projection today is as opposed to what was projected in the year 2001, and the projection is around a $199 billion deficit. In other words, just for the budget year in which we are working, the projections over the last essentially 2-plus years have gone from a projection of a $396 billion surplus to a $199 billion deficit. Now, what caused that? We will hear a lot of debate about what caused it. In fact, it has already been said today that President Bush's tax cut from a few years ago caused it, that President Bush's economic policies have caused it. In reality, we are going to see some of the numbers that have been put together. What happened is that on 9/11 the United States was attacked by terrorists and people saw the World Trade Center collapse. People saw what happened very vividly as the United States responded to the fact that we were at war with terrorists. Following that, there were massive increases of spending at the Federal level; spending required to respond to the 9/11 attacks; spending required to address the war against terrorism, for example, the war which we have fought already in Afghanistan; spending to deal with our homeland security; spending to deal with strengthening our national security and preparing ourselves to be sure that America and Americans are safe throughout the world as we deal with an increasingly dangerous world. In addition to that, spending has gone up on health care. Spending has been driven up in a number of the other social areas of our budget. We saw very little relief, if not in fact dramatic increasing pressures, for spending in the last 2 years. At the same time, the economy collapsed. I will put up our first chart. We have seen this chart already today, but this chart shows that at the same time our spending started to go through the roof, as spending started to go up dramatically, revenue, which is the blue line, dropped off dramatically. The revenue dropped off dramatically for a number of reasons. It has been said that the revenue dropped off because of President Bush's tax cut. In part, that is true, because although that tax cut was phased in over 10 years and although most of that tax cut has not even occurred yet and cannot be the responsibility of these declines in revenue, a part of it was. There was tax relief, and as a result of that tax relief there was some decline in revenue. However, let's go to the next chart. This next chart is another way of looking at the same thing. Again, the blue is revenue and the red is spending. The revenue since 2000 has gone down precipitously. The spending in Washington has not. This is another way of showing we are facing the dual problem of increasing pressures on spending and reducing our falling revenue to support the Federal budget. Why did the fall-off on revenue happen? This chart shows what happened in our economy. This is the Nasdaq. Starting in 2001, it hit about 5,000. It is now down to--when the chart was made--around 1,200 and is hovering in that neighborhood today, about a 75-percent reduction in the values just on this market. The same type of charts could be put here for the New York Stock Exchange or for other exchanges across the world which have seen worldwide dramatic reductions in economic activities. Virtually everyone who pays any attention to the economy these days knows the bubble popped and the economy went into a serious collapse. Many have called it recession. We have held dozens of hearings in Washington to understand what happened, why it happened, and how soon we will be able to climb out. People know about the Enron debacle, the WorldCom debacle, and the loss of confidence the American people have in our markets today, which loss of consumer confidence has generated further difficulty in the economy. People are also aware we are potentially going to have to go to war in Iraq. That cloud over the economy itself is generating the kind of lack of confidence in economic activity that causes us to have difficulty in seeing a rebound in the markets. The next chart shows what it was that caused us to see the dramatic change in our deficit. This chart shows the year 2004. There are charts that can predict it out for 10 years and add in some of the proposed stimulus package. But this chart shows what caused us to end up where we are today in the budget. Over half of the problem we are facing is what I have been discussing, the weak economy and changes in the estimates of what revenue will be coming into the Federal Government through our current tax and revenue structure. As I indicated, a portion is attributable to tax relief, although this is static scoring, and if one looks at what tax relief does to the economy, I suspect that number will go down dramatically. Static scoring shows nothing but 100 percent loss of revenue for any tax dollar relief. But we know when there is tax relief, that causes an impact in the economy. That dollar is not spent by the Federal Government but spent somewhere else, and if the relief is effectively projected, it could be significant. So this number could be reduced significantly. But even if we use static scoring and say a tax cut reduces revenue, dollar for dollar for the Federal Government, only 19 percent of what we look at now is attributable to the tax relief we passed a few years ago in the Senate and the House. That is another 6 percent for tax relief not attributable to the vote a few years ago and the increased spending. Take just the increased spending that has been caused in Congress by September 11, the war on terrorism, the need to beef up our national security, the increases in health care costs, and a number of other cost drivers we have in our budget. Take the increased spending and the collapse of the economy. It represents 75 percent of why we are where we are. I suspect during the week we will hear how President Bush's economic plan caused us to be where we are. Here are the facts. There will be a lot of projections and a lot of charts, but nothing can change the reality of what happened on September 11, what our response to it has been, and what happened in the economy following that. That, in a nutshell, is what caused us to end up where we are. With that explanation of what happened, we get to a situation where this economy has put forward a budget. I will be rough in my numbers because I don't have the charts in front of me. If we do nothing, if this committee simply says we will keep Federal spending at its current levels--we will not drive it up or down, we will not reduce taxes or increase taxes, we will take current law as it now sits--someone could give me a more accurate number, but it is in the neighborhood of $150 to $200 billion of deficit, if we do nothing. The question is, Should we do something? Should we cut spending in an effort to keep the difference down? Should we raise taxes? I don't believe there is anyone who is suggesting raising taxes right now is a good idea. But there are those who are suggesting because of this, because the economy is no longer contributing what it was contributing before, and because if we learned any lesson in the last few years, it is that the way to get out of these economic difficulties in the Federal budget is to have a strong, flexible, dynamic, vibrant, resilient economy--if we want to do something to make this gray part of the chart get stronger and become better in terms of generating revenue for the Federal Government, then we should have some kind of a stimulus package. So the debate comes around: Should we cut spending? Should we freeze spending? Should we keep spending controlled? Should we reduce taxes? Should we have a stimulus package? And if so, what, and how? Looking at the spending side of this equation, the spending drivers in this budget are the beef-up in our national security. In fact, these numbers do not even include the possibility of a war with Iraq. I will talk about that in a moment. The increase in our national security spending, the increase in the costs of fighting the war on terrorism, the increases in homeland security, and the increases in health care-- and there are a few others--are the main drivers of the increases in costs in this budget. I don't believe there are very many in the Senate, or in America, who would say right now is the time to cut defense spending or right now is the time to cut homeland security spending. We can hold the line, and we are going to do that, and this budget does put significant pressure on holding those lines, but there is not a lot of room in the circumstances we see right now to reduce those spending areas, although we will work our hardest to do so. I believe we will do so in a bipartisan fashion to get to the right numbers on the budget. To make a quick aside, I have fought for a balanced budget amendment for years. I still believe we should have one. As I and others have fought for a balanced budget amendment, one of the examples for exceptions we have always acknowledged is we could see a situation where we would need to tolerate deficits for a period of time if we were facing war or a national emergency declared by the President. Today I believe those circumstances face us. I believe we are at war today with terrorists. I believe it is very possible we will be at war with Iraq soon. And I believe we face a national emergency in terms of our homeland security needs. Those are the unfortunate realities that cause us to have very little flexibility on the spending side of this budget, although again I say we are going to do everything we can to bring it under control on the spending side. The question is, What do we do then, after we have done everything we can on the spending side? By the way, contrary to some of the arguments heard today, the budget proposed works its way back to a balance. It takes 10 years to do so. I am very disheartened by the fact, with the spending pressures we see and with the revenue drop-off we have seen, that our projections are going to take us 10 years to get back into balance. The fact is, this budget balances over the 10-year period. What do we do when we look at this revenue side? The question is, Do we do nothing? There are those who have advocated today that we should not have any tax relief. One argument is, have no tax relief until we know what the cost of the war is. Another argument is, have no tax relief because we should not have tax relief when we face this kind of spending pressure in the budget. And when we face these kinds of problems we have talked about that legitimately cause us to have to increase expenditures in major categories, we should not be looking at tax relief. There is another side of the argument, and that side of the argument is, unless we do something to give a basic boost, a shot in the arm, a revitalization to our economy, we will see the grow-back of this weakened economy be much slower. It gets back to that argument about dynamic scoring, of what a tax cut really will do. That is one of the reasons President Bush has proposed--and this Budget Committee has proposed to the Congress--that we have tax relief. As our chairman of the Budget Committee has indicated, this Budget Committee does not write the tax bill. We simply tell the rest of the Congress, and in this case the Finance Committee, how much money we are willing to budget for them to utilize in establishing a tax cut. Then the Finance Committee can come together and, in its best wisdom, craft the most effective tax cut designed, in their opinion, to do the best for our economy. That having been said, there are proposals out there. The President made his proposal. This budget accommodates the President's proposal. The President's proposal is to do basically three things. It is to take the tax cut that we passed in the year 2000 and make it permanent. Most people in the country never quite understood why it was that Congress would pass a tax cut and make it only last for 10 years, phase it in over 10 years, and then have it expire basically as soon as it is phased in. It has to do with some interesting procedural requirements on the floor of the Senate which I will not get into now, but the fact is the tax cut which was implemented a few years ago will expire in 10 years, and the first part of the President's plan is to make it permanent. The second part is to say we should not phase it in over 10 years. We should accelerate it and implement it all now. The third part has a number of pieces, but the core of it is elimination of double taxation on dividends. Let's put up the next chart. There is a big attack on this. Frankly, in all these areas the attack starts out--you will hear this said dozens of times in the next few days--it is a tax cut for the wealthiest of Americans. I have been in Congress now 10 years. I served 6 years in the House, 4 years in the Senate. I am in my fifth year in the Senate. Over that 10 years, in virtually every year I and others like me who want to see taxes cut and reduced, when we have fought for tax relief, every single solitary time that we proposed a tax cut of any kind or nature, it has been attacked as a tax cut for the wealthy. Every time. Even when all we did was propose the marriage tax penalty elimination, it was attacked as a tax cut for the wealthy. The common rhetoric of those who do not support reducing the Federal tax burden begins with ``a tax cut for wealthy Americans,'' because the attack is that any tax cut is going to benefit the wealthy. If you look at the numbers, as to who pays taxes in America, it is primarily those in the upper income brackets who pay by far the largest percentages of the taxes. So if you look at actual dollars, you can make that argument. But if you look at what is being done in the tax relief proposed by the President on a proportional basis, on a percentage basis, the biggest amount of tax relief is going to those in the lower income brackets. As this chart shows, those earning from zero to $30,000 will have their taxes reduced by 17 percent. Those earning from $30,000 to $40,000 will have their taxes reduced by 20 percent. In the $40,000 to $50,000 category, the reduction is 14.5 percent. You can see as you go up in income categories, until you get past the $75,000 to $100,000 figure, the higher percentage reductions are all occurring in the lower brackets. The higher income brackets have the lowest percentage of income reduction. Again, one could take the actual dollars, but because very few numbers of Americans fit in these categories proportionately, but they make the higher levels of income, a smaller reduction in their taxes is going to give them a higher dollar benefit and people can use dollar numbers to show that. But the reality is that the higher percentage of relief is going to those in the lower income categories. It is pretty much impossible to have a tax cut, unless it is just a tax cut for the lower brackets, that doesn't have some relief across the board, and then allow those to make that argument about the tax cut for the wealthy. In my opinion, it is class warfare. It is attempting to say those at the upper ends of the income brackets in America should have no tax relief and all tax relief should be favored toward this end, toward the lower income brackets. What happens if you follow that logic is that eventually no tax cut is ever acceptable because the tax down in these categories gets to the point where, no matter what you do with it, unless you eliminate it, it doesn't generate the revenue reductions or doesn't generate the stimulus to the economy that is necessary to get the impact that is desired. That is where we are today. That is why we are seeing these arguments. I think it is very unfortunate that every time we try to cut taxes in this Congress the first response is that whatever the tax is that is proposed to be reduced, it is a tax cut for the most wealthy Americans. Let's go back to the chart I just took down. With regard to the proposal that we eliminate double taxation of dividends, Charles Schwab, the founder and chairman of Charles Schwab Company, indicated in a Washington Post commentary on March 11 of this year: I can't think of any other tax policy that would, at one stroke, be more beneficial to ordinary investors. I suspect somebody could say only rich people invest, and therefore this is a tax cut for the wealthy. But I do not think that argument is going to be made too strongly on the floor this week because most Americans are now involved in the markets in one way or another, even if it is only through their retirement plans. But most Americans know it is critical to see things like the New York Stock Exchange and the NASDAQ and others get a boost. Charles Schwab goes on to say: The impact [of dividend relief] would be enormous. I believe in that same commentary he indicated his personal belief to be he would expect to see the stock market rise 10 or 15 percent with a renewed bolt of confidence throughout the entire economy just by doing what the President has proposed with regard to the double taxation of dividends. We have another financial expert in the country who has weighed in on this issue, Alan Greenspan, on February 12, before the House Financial Services Committee: In my judgment, the elimination of the double taxation of dividends will be helpful to everybody. I think he was responding directly to this notion that it only helps a certain class in society. He was responding to this class warfare argument that continues to be brought up as we try to address tax policy. He said: There is no question that this particular program will be, net, a benefit to virtually everyone over the long run, and that's one of the reasons I strongly support it. The reason it is strongly supported by these experts is because today, as has been indicated by others who have spoken on the floor, there is very little incentive in a corporation to generate dividends. That is because, if those dividends are paid out, they are taxed twice. As the chairman of the committee indicated, the net tax burden is about 70 percent. Whereas, if the corporation instead incurs debt, and further leverages itself, then it gets a deduction for that debt or it gets a deduction for a portion of the debt costs. So it can actually get a tax benefit for going further into debt, and it pays a tax penalty if it sends out dividends to its shareholders. What we have seen is corporations increasingly following this path because of the pressure that is put on them by our Tax Code, putting themselves further and further into leveraged positions which I believe is one of the reasons we saw what happened to Enron. That is why Enron had to go through these incredibly complicated sets of transactions to try to mask the amount of debt it was really carrying. It is the same with many other corporations. If we want to encourage corporate America, which generates strength and jobs for this country and the families which depend on those jobs, if we want to generate pressure in the business community for the kinds of proper decisionmaking that will give us stable, strong businesses that will generate strong and lasting jobs, then we need to address the policies by which we tax them. We need to encourage policies that will support dividend payment rather than debt. That is one of the reasons why you see so many experts saying it is critical for us to move into this new kind of tax policy. The question is--given it is good policy--can we do it now with this very dire budget situation we face? That is a tough question. It is a tough question for me to answer because in the short term it will cause our deficits to go up, although the amount of that is in discussion and in dispute because some will use static scoring, and some will use dynamic scoring, and we really don't know the dynamics of it. There will probably be charts here today that show all these projections have the potential to be widely inaccurate; and we all agree with that. But the fact is, we do know there is a dynamic that occurs when we change our tax policy, and the experts are telling us that dynamic will be beneficial to making our economy more flexible and more resilient. So the question is, Do we take this stand now? Do we do what is necessary to give a boost to the economy, realizing it may take a period of years for the real strength of it to build us back to where we have made our posture stronger, do we sit tight and do nothing now and hope the economy grows out of it on its own or, as some will probably suggest, do we spend ourselves into prosperity? Does the Federal Government take the position that we need to have a lot of spending, a lot of stimulus in the economy, and we should just not concern ourselves with the deficit but spend ourselves back into a strong position economically? As you might guess, I strongly reject that ``spend ourselves back into prosperity'' argument. It will probably never be said that way today or throughout this week. But I encourage people who follow this debate to note, when amendments are proposed, do those amendments drive up the deficit or do they not? Do those amendments drive up Federal spending or do they not? Let's go back to that first chart with the lines, because as we debate amendments on this budget, the amendments will generally have one of two or three impacts. They will either be deficit-neutral, which means they could increase spending by increasing taxes or they could reduce taxes, which is reduce this line, or they could increase spending, which is this line. I think it is very important for people to pay attention to the amendments that are offered because this whole week I hope we do not get any amendments on the floor that would drive the deficit up with more spending. I would hope we would recognize the deficit increases that are caused by the tax reductions can be addressed with an understanding of the dynamic impact they will have over time. Just a couple of other arguments I want to address. It has been said the proposals of this budget spend the Social Security trust fund. I understand what is being said there. Let me clarify what the situation is because I do not believe Americans should go away from this debate believing that somehow the Social Security trust fund is being robbed. The fact is, regardless of whether the tax cut is eliminated from this budget or whether it is put into this budget, the Social Security trust fund, at the end of the 10-year cycle, will be about $4.1 trillion. It will be the same trust fund no matter what happens. Because what occurs is that, in the Social Security trust fund, the excess that comes in from payroll taxes that is not spent out into the Social Security system is a part of that surplus. That surplus is turned into Federal debt instruments. Then, what are those Federal debt instruments used for? Spending, or for tax relief, or for whatever is a matter for Congress to address. But the fact is, those Federal debt instruments are there, and they are still there to protect Social Security. My last point. Some have said we should not do anything because we are possibly going to be going to war. Again, the argument there seems to be that tax relief is not wholesome for the economy; therefore, we should not be doing anything to destabilize the economy. I believe what I have said indicates where I come down on that point, that the fact is we must do something to stimulate and strengthen this economy. The medicine we need is in the President's proposal and is made possible by the projections of this budget. Although we will face some very expensive and very difficult budget decisions, if the United States goes to war in Iraq, that simply increases the need for us to do our best to make this economy strong and to do what we can, through our tax policy decisions, to put us in the best posture to have a flexible, resilient economy in these difficult world circumstances. So for all these reasons, I encourage this Senate to support this budget. I yield the floor.

Mr. CRAPO

Mr. CRAPO. Mr. President, I object.

Mr. CRAPO

Mr. CRAPO. Mr. President, I rise today to introduce this resolution on behalf of myself and Senator George Allen from Virginia. This resolution underscores a very serious and ongoing problem relating to the illegal subsidies being provided by the Korean Government to Hynix Semiconductor, one of the companies operating in South Korea. With this resolution, my colleagues and I urge Secretary Evans, our Secretary of the Department of Commerce, and Ambassador Zoellick, U.S. Trade Representative, to use all means at their disposal to combat these illegal subsidies in the strongest ways possible under our trade laws. Since October 2000, the Government of Korea, acting through the banks that it owns and controls, has provided an astounding $16 billion in subsidies to Hynix, a Korean producer of DRAM semiconductors. Hynix is a company with massive debt resulting from the easy lending practices of the Korean banks during the late 1990s. With these preferential loans, Hynix built substantial new capacity and became the third largest DRAM producer in the world. Starting in late 2000, Hynix's overdevelopment began to catch up with them and Hynix became unable to repay the principal and interest on these massive loans and bonds. Rather than letting Hynix undergo formal bankruptcy and deal with the financial situation it faced, the Korean Government orchestrated no less than five separate bailouts of Hynix. Had it not done so, Hynix would have had to face a restructuring with substantial asset sales, and would have been simply another competitor in the marketplace in a more balanced and fair playing field. However, these subsidies have permitted Hynix to stay in business with its unrealistic business practices. Hynix, a company that cannot compete in the market on a balanced playing field, in a fair market environment, continues to run its inefficient DRAM plants at full speed, flooding world markets with subsidized products. Despite the subsidies, Hynix continues to lose money--$8 billion over the last 3 years. Yet the Korean Government continues to pour money into this company. Just 2 months ago there was yet another bailout, amounting to $4.1 billion. This is almost twice Hynix's revenues in all of the year 2002, which amounted to $2.4 billion. The Korean Government must not be allowed to continue to underwrite the horrendous operating losses of this company as it has done for the past 3 years. It is time for the Korean Government to stop its illegal subsidies. In the highly competitive DRAM market, subsidies of this sort completely distort production and trade. Every other DRAM company in the world is being crippled by the subsidized DRAM products that Hynix floods the markets with. This has resulted in the worst and longest downturn in the DRAM sector that has ever been experienced by this sector. Nobody can make money in this business if one of the biggest players is being underwritten by the South Korean government treasury. Subsidies of Hynix have had a huge impact on Micron Technology, the last remaining U.S.-based producer of DRAMs. Just last week, Micron announced it was laying off 10 percent of its worldwide workforce. This translates into 1,100 lost jobs in Idaho alone, and 560 lost jobs in the State of Virginia, which is why my colleague, Senator Allen, is joining in this resolution. This is the first time Micron has had to have layoffs since 1985, and it was only done by the company as a last resort. Hynix subsidies have had a real impact on Micron's bottom line as well. The subsidies have impacted pricing to such an extent that even Micron, one of the most efficient DRAM producers in the world, has lost $2 billion over the past 2 years. We cannot afford to see an important technology like DRAMs lost in the United States because of illegal, predatory foreign government subsidies. The South Korean government is clearly responsible for the bailouts that have occurred. The creditor bank now owns 67 percent of Hynix, and the government owns the vast majority of the creditor bank. To argue that the government plays no role in this bailout is the height of absurdity. The Secretary of Commerce and the United States Trade Representative have the power to remedy this situation and put a stop to more bailouts. We need to use the trade laws we have to the fullest extent possible and countervailing duty should be imposed that offsets the full amount of these subsidies. These sorts of subsidies have absolutely no place in today's global economy, particularly as we are engaged in a round of new trade talks aimed at further liberalizing trade regimes around the world. The injurious and anachronistic policies of the government of South Korea must stop. In this context, already the European Union and the United States Government are engaged in investigations under our trade laws of the predator conduct of the South Korean government in DRAM markets. We expect decisions on these cases sometime in the next couple of months, and hopefully these cases will establish the necessary groundwork for us to be able to deal as we should in the global community with this kind of unacceptable government subsidy. The U.S. International Trade Commission has already issued its ruling that Micron Technology has been injured by these illegal activities of the South Korean government. We must now move on to determine the extent of these activities and assure that countervailing duties are identified and applied to the DRAMs that Hynix continues to flood the world markets with. I want to read a part of the resolution to establish what it is we are asking our Congress to do. After the whereas clauses, it states: Resolved by the Senate and House of Representatives concurring, That, No. 1, it is the sense of the Congress that the actions of the Republic of Korea with respect to the bailouts of Hynix Semiconductor, Inc. are severely detrimental to the bilateral friendship and economic relationships between the United States and Korea; and, No. 2, Congress calls on the Republic of Korea to immediately cease any further bailouts of Hynix and to immediately comply with all of its obligations as a member of the World Trade Organization, including its obligations regarding subsidies. The Secretary of Commerce and the U.S. Trade Representative are called on to immediately take such actions as are necessary to end any further bailouts of Hynix, including the self-initiation of further trade cases, the initiation of a further government investigation of the financial impact of these bailouts, and the calling of a special subsidies code meeting to raise legal concerns with this issue and to begin consultations with Congress regarding appropriate legislative action to fully deal with the impact of bailout of Hynix; and, the President is called on to consult with the European Union regarding joint action with respect to the unlawful subsidies to Hynix that are harming the international DRAM semiconductor and electronics markets. As I have indicated, we face incredibly difficult times in the DRAM and semiconductor industry as a result of one nation's desire to continually prop up its competitors against all other world competitors--a competitor that has shown it cannot effectively compete without continuous government subsidies. This is one of the core reasons why we are engaged worldwide in negotiations to reduce government subsidies to inefficient competitors, to stop nations from trying to flood the market with their company's products so that they can drive other, more efficient and more effective competitors out of the market and take those markets from other countries where they properly reside. I encourage all of my colleagues to strongly support this resolution and send a strong message to the government of South Korea that the bailouts of Hynix must stop.

Mr. CRAPO. Mr. President, I was present as the debate took place with regard to the editorial issues that have been raised relating to the Miguel Estrada nomination. The Senator from Nevada raised this issue. In the debate over the Estrada nomination, there are many issues that flow back and forth. One of them is the question of what the public believes, and what the editorial boards across this Nation believe. The editorial from the New York Times was discussed earlier. I point out that this editorial in the New York Times was one of only a few editorials in the country that supports the position that the Senate should continue with a filibuster of this nomination. In fact, only eight of the editorial boards across this Nation have taken the position of supporting the filibuster of Miguel Estrada's nomination, while fully 51 editorial boards across the Nation support ending the obstruction of this nomination and conclusion of the filibuster and resulting in an up-or-down vote in the Senate on the Estrada nomination, including the Los Angeles Review Journal which on two separate occasions supported Mr. Estrada. Thank you, Mr. President. I yield the floor.

Mr. CRAPO

Mr. CRAPO. Mr. President, I rise to introduce legislation that will encourage the expansion of an often overlooked domestic energy resource that offers a source of revenue for our rural communities and an avenue for cleanup of agricultural waste. It has been well-publicized that our country faces mounting uncertainty in meeting our energy demands. After years of getting little attention, we are now in a period where the development of domestic energy resources has reached a crucial point. I support our efforts to diversify our energy supply resources to ensure our nation's energy security, support our business and agricultural economies, and protect our individual consumers. This time of challenge also offers great opportunities. One of those is the opportunity to encourage a largely untapped resource to provide domestic energy, while also promoting the protection of the environment and rural development. I am speaking about energy derived from agricultural and animal waste sources. Electricity from biomass and waste sources using modern technology is a renewable resource that can add to our domestic energy supply. The process uses manure and waste products that are heated and converted into biogas that is burned to generate electricity, which is sold into the power grid. This technology is widely accepted in Europe where over 600 systems are in operation today. In this country, the technology is gaining acceptance following numerous successful case studies. This process offers farmers an option for cleaning agricultural waste that is a known source of groundwater contamination and air pollution. The revenue generated from the sale of electricity provides a source of income to offset the cleanup costs, while providing important kilowatts to the power grid. The bill I am introducing today would extend the 1.5 cent per kilowatt hour production tax credit that is currently available to wind, closed-loop biomass, and poultry waste by making it available to all agricultural and animal waste sources. There have been other bills introduced that would extend the tax credit to additional renewable sources such as solar energy. I encourage these efforts to broaden the definition of renewable sources. The use of modern technology to generate electricity from waste should not be overlooked. The tax credit is an important incentive to encourage its wider use. I encourage my colleagues to join me in this important initiative. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. CRAPO

Mr. CRAPO. Mr. President, I rise today to submit a resolution. (The remarks of Mr. Crapo pertaining to the submission of S. Con. Res. 11 are printed in today's Record under ``Submission on Concurrent and Senate Resolutions.'')

Mr. CRAPO

Mr. CRAPO. Madam President, reserving the right to object. I will not object if the request for unanimous consent is amended to provide that prior to moving to the legislative calendar, the Senate move no later than 6 p.m. today to a vote on the Estrada nomination, up or down, and then proceed to the legislative calendar under the consideration of both the Republican and Democratic plans.

Mr. CRAPO. Madam President, it seems to me that we can easily move to any of these other issues that the Senator and his colleagues have been discussing, which we all agree need to be addressed. We can easily move there if your side will agree to give up trying to stop the nomination of this one single judge. So one could say that those who want to hold the floor and focus on this nomination are willing to delay debate of other issues until we vote on this particular nomination, or that those who are filibustering--which is generally understood by the public as an act of stopping a procedure and moving to a vote--this particular nomination are unwilling to move to these other economic issues. Would you not agree that it really comes down to the question of whether we want to agree to change the precedent of the Senate and open up investigation into these confidential documents of the Solicitor General's Office?

Mr. CRAPO. Will the Senator yield for a question?

Mr. CRAPO. I object to the previous request.

Mr. CRAPO. Madam President, I will not accept that modification to my request.