Phil Gramm

Mr. GRAMM

Mr. GRAMM. If you would answer my question, yes.

Mr. GRAMM. Let me ask a question. Maybe there is a shortage of tanker capacity now with the war in Afghanistan. Can we get these planes immediately? Do you know how long it is before the first one would be delivered?

Mr. GRAMM. I am happy to yield. Could I yield on the Senator's time because mine is limited?

Mr. GRAMM. If I may conclude--other people want to debate--here is my point. When we sent American troops to serve in Japan and to serve in Korea, we negotiated agreements whereby they could be tried for local offenses by local authorities. But that is a world apart from when we send marines into Somalia and when we send marines and special forces into Afghanistan. That is the issue about which we are talking. We are talking about the jurisdiction of International Criminal Court set up by a treaty that we have not ratified, and we are talking about American military personnel wearing the uniform of this country. All the amendment by Senator Helms and Senator Miller does is say that American service personnel cannot be tried before this Court. No judge is an American, no procedure is set by Americans or negotiated by them. We have not ratified the treaty. It is imperative we adopt this amendment, and I have every confidence we will. I yield the floor.

Mr. GRAMM. And we have them for only 10 years.

Mr. GRAMM. I will in a moment. Let me just complete my point. My point is this. This is piracy. This is piracy against safety in not allowing safety improvements to go forward until the Secretary injects himself into a decision that ought to be made in Illinois. This has nothing to do with the Defense bill. At 7 o'clock on Friday evening, when we are trying to finish an appropriations bill, we have before us a provision that has nothing to do with national defense. It is a provision that basically would have us sit as the airport board in Chicago. And it is opposed by one of the two Senators from Illinois. It also strikes me, understanding rule 28, that this is basically an effort to put in place in conference something that would be totally against the rules of the Senate and that is a totally extraneous provision. By putting this seemingly harmless limitation on spending safety money--if anybody believes limiting people's ability to improve safety at Chicago O'Hare is harmless--what we do is create a vehicle whereby, on the Defense appropriations bill, we could see an approval of an airport plan in Chicago. I don't think that is our business. I didn't run to be on the airport board in Chicago; no one else here ran; certainly no one was elected. The Senator wanted me to yield. I am happy to yield. But let me pose a question. Is it your objective in conference to change this language to approve this deal in Chicago? Is that what you are trying to do?

Mr. GRAMM. Mr. President, will the Senator yield for a question?

Mr. GRAMM. Let me pose another question, if I may. The Air Force doesn't want these planes. We are going to spend $10 billion plus another $1 billion to build hangars, and then we are going to give the planes back. Does the $10 billion sound to you like an inflated price to lease these airplanes for 10 years?

Mr. GRAMM

Mr. GRAMM. How much time do we have on our side?

Mr. GRAMM. Madam President, let me first congratulate the Senator from Oklahoma. I think what has happened basically is that we have seen a very impressive lobbying effort where the railroads have gotten together with the unions and divided up $15 billion, which is the only barrier between the taxpayer and massive injection of Federal funds into the railroad retirement program. And basically this has been lobbied as some movement toward private investment in railroad retirement. The Senator from Oklahoma and I both support private investment, but the problem is that under the cloak of investing this $15 billion, as the actuaries of railroad retirement show very clearly, under this bill, $15 billion plus all the interest earned on all the investments made will be pillaged over the next 17 years as that money is taken out and miraculously divided exactly equally between the railroads and the railroad retirees. The railroads have lobbied hard for the bill because they say they cannot pay 16.1-percent payroll taxes. They can't afford it. Yet under this bill, in 19 years, they are going to be moving toward paying 22- percent payroll taxes because they will have depleted the trust fund. Does anybody believe they can or will pay 22-percent payroll taxes in 19 years? Does anybody believe the railroads are not going to be before the Congress saying they will be driven into bankruptcy, and they will have to shut down every railroad in America if they are forced to pay a 22-percent payroll tax? But that is what is required to keep this program solvent, after you pillage $15 billion. I thank the Senator from Oklahoma. This has been an uphill battle. Americans love bipartisanship and they love consensus. Those are wonderful things, but they are very dangerous things. What we have had is the railroads and the labor unions getting together, each having their affection attracted because they each get $7.5 billion, but what we have really seen is a consensus against the taxpayers' interest. The Senator from Oklahoma has been courageous in standing up and pointing out that this emperor has no clothing. I congratulate him for that. We are going to have one final vote before the bill is passed, and that is a point of order. The telltale sign of the problem with this bill is not just that $15 billion is divided up between the railroads and the railway unions. It is that in making the transfer this year, we are going to increase the deficit by $15.3 billion. We have a budget that gives us some power in trying to prevent these things from happening. If we were offsetting the $15.3 billion in some other way, there would be no budget point of order, but there is a budget point of order because we are violating the budget. The final vote we are going to have is the vote on whether or not we are going to enforce the budget. I have to say, we have already started to see a partisan debate where many of our colleagues are saying we have a deficit because of the tax cut. Today on this bill, we are going to raise the deficit by 40 percent of the impact of the entire tax cut for this year. In fact, we are approaching the point where we will have increased spending $100 billion above the budget this year. If somebody votes to waive the budget point of order and says, we do not care about the budget, the sky is the limit, we can spend anything we want to spend and this is a popular thing to spend it on, then I hope they will not be out arguing that they are very concerned about the deficit. You cannot have it both ways. You cannot be for adding $15 billion to the deficit and be concerned about the deficit. You cannot be for increasing the deficit on one day and blaming somebody else for it on the other. I thank our colleague for his leadership. I intend to vote against waiving the budget point of order. I hope my colleagues will as well. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I take this opportunity to congratulate the distinguished Senator from Indiana. It has been my privilege to serve with him now going into my 18th year. I have always admired him. I have always thought he was the one reasonable, sane leadership voice on agriculture in the Senate. I take a little bit of the time I have this morning to say that. I am not going to get into the merits or demerits of the American farm program or this bill. I can sum up my own feelings by simply saying that America's farm program would make an old commissar from the Soviet Union puke. It is a program which is an embarrassment to logic and reason. It chronically encourages overproduction. It hurts the best farmers the most. It has no socially redeeming value, and America would benefit greatly if we could eliminate the great bulk of the farm program. I would say, in sort of the ultimate insult to everything that many Members of this body claim to believe in, we literally have a program in this bill that builds upon an idea where we drive up the price of milk consumed by children, many of whom are from poor families, to pay more subsidies to people in the dairy industry who on average have assets of over $800,000. How that can be justified defies imagination. Yet we constantly are engaged in debating compacts which are really conspiracies against trade. In this bill, we solve the problem by just giving a whole bunch of money to everybody. I don't want to debate the demerits of the farm program or this bill. I want to make several points. First of all, it is December. In the last 25 years, we have not often been in session on December 5. We have work to do on serious issues. We are at war with terrorism. We have an economy that desperately needs attention. We have a handful of appropriations bills that have to be passed. Senator Lugar raised the need to debate Defense appropriations. God knows, while we are still feeling the shock of the last terrorist attack, knowing there may be another, that is the business of the Senate. The economy is in a recession, or at least we have had a negative quarter of economic growth, and almost certainly we will have another one. We ought to be debating a stimulus package. We have a very real problem with terrorist acts and their impact on insurance. We ought to be dealing with that issue. Instead we are dealing with extraneous matters in what is a political agenda, sort of a political one-upmanship effort. What are we doing talking about a farm bill that does not even expire for a few more months? What is this about on December 5? Does anybody really believe there is any possibility whatsoever, any chance that this bill could be finished before we adjourn? Does anybody really believe that? If we were mean spirited--and, of course, we are not--but if we were mean spirited, we would let you get on this bill and make you stay on it awhile. But nobody has any intention of staying on it. This is all a political one-upmanship to try to bring up a bunch of extraneous issues that supposedly have some political saliency. My own view is we need to get on with the pressing business of the country. We are going to get paid every day next year. This bill doesn't expire for a few more months. Let's set it aside, go to the Defense appropriations bill, finish these appropriations bills, and make a decision on if we can pass a decent stimulus package. If we can, we should; if we can't, we should forget about it. Can we deal with terrorist threats and the insurance implications of them? We ought to do those things and finish our business. But why are we bringing up a farm bill which is way over budget, which I think the President will veto? There is only one reason. It is political. I don't think it makes any sense. We have some people on our side of the aisle who want to bring this up because they want to offer amendments to it. We don't have anybody, as far as I know, on our side of the aisle who is for the bill as it is now. The point is, we have all next year to offer amendments. I hope we can deny cloture on bringing this bill up and get on with the business of the country. I am not getting mail here--none of my colleagues are--so I have probably 200,000 first class letters. And I will bet you not one of them says: Stop what you are doing; stop fighting this war; stop worrying about the economy, and raise the price of milk. I don't think America is concerned about the farm program right now. The current farm program is going to be in effect for a few more months. But they are concerned about a lot of work we have not done. This is a political stall, in my opinion. We ought to get on with the business of the country. I thank the Senator for yielding.

Mr. GRAMM

Mr. GRAMM. Mr. President, we have before us a bill that 74 Members have cosponsored. It is clear from the previous vote where the votes are on this bill. I remind my colleagues that Senator Domenici offered an amendment to strike a provision of the bill that was not in any bill that anybody cosponsored, and it was literally a provision that was written into the bill that orders the Office of Management and Budget, which is the budget scoring arm of the executive branch, and the Congressional Budget Office, which is the budget scoring arm of the legislative branch of Government, to falsify the budget by not counting $15 billion that is being taken out of the Treasury. This is an extraordinary provision. It basically ordered both budgeting arms--the budgeting arm of the executive branch of Government and the budgeting arm of the legislative branch of Government--to simply look the other way and not count $15 billion being taken out of the Treasury. Senator Domenici, with the support of the chairman of the Budget Committee, offered an amendment to strike that language so at least we could have honest bookkeeping. Only 40 Members of the Senate voted for honest bookkeeping. It is clear this railroad retirement bill is wired. What I wanted to do was to offer an amendment to achieve everything proponents of the bill claim they want to do but to do it in a responsible manner. I don't know where this amendment is going. I expect it is going to get relatively few votes. However, I feel obligated to offer the amendment and people can do what they want to do with it. Let me try to define the problem. If you read what people are saying in the paper and you talk to all these very nice people in the hallways who are lobbying for this bill, they say: Look, we have over $15 billion in our trust fund. It is our money. It is invested in Government bonds. We don't think it is a good investment--I sure agree with them there. They claim they want to take the money and invest it. Then with the higher interest rates that they can earn, they want to lower taxes and increase benefits. Now, there is a big problem here. If you look at the actual estimates done by the railroad retirement board, you find under any of the three economic scenarios that the railroad retirement trust fund actuaries look at, this proposal does a lot more than simply invest the money. In fact, as I pointed out on many occasions, what this bill does, in essence, is, over a 17-year period, it literally takes $15 billion of capital out of the trust fund. This chart shows--and this is based on the Railroad Retirement Board's data; this is not my data--under current law the trust fund would build up along the black line entitled ``Trust Fund Under Current Law.'' Let me remind my colleagues that railroad retirement is not fully funded. If we had ERISA laws applied to railroad retirement where you had to have a trust fund sufficient to pay benefits, ERISA would shut railroad retirement down today. This is a program that has no actuarial solvency whatever and it is currently receiving huge Federal taxpayer subsidies today and has always received Federal subsidies. Basically what is going on, this is what the trust fund balance looks like under current law. Proponents of this bill say it doesn't make sense to invest this in Government bonds; let us invest it in stocks and bonds. We will have more money; we can have a better, more secure retirement program. I agree with that. I am supportive of letting them invest the money. The problem is, that is a smokescreen. What they are really doing, if you look at what happens to the trust fund before any money is invested, before one single penny is invested, they cut the amount of money the railroads are putting into retirement from 16.1 percent of payroll to 14.75 percent, and it falls to 14.2 percent and then to 13.1 percent. They also lower the retirement age from 62 to 60. At the same time we are raising the retirement age for Social Security, they lower the number of years to be vested from 10 to 5 and they raise benefits. The net result is, even though they assume they will earn 8 percent in real terms, whereas they are only getting 1 percent in real terms from Government bonds the way they are calculating it, even with as high a rate of return, what happens to the trust fund under this bill? What happens to the trust fund is, it goes down because not only are we paying out every penny of earnings from the higher rate of return but we are also paying out principal. Why doesn't it go broke? The reason it doesn't go broke is, in 2021, the trust fund is now down to about a third of what it would be under current law because you have added all the new benefits. You reduce the amount of money going into the fund so even though you hope to earn a much higher rate of return, you expect all the return and two-thirds of the trust fund. What happens in 2021 that keeps the system from going bankrupt? The way the bill is written, at that point, the payroll tax, which is down to 13.1 percent of payroll, skyrockets. It goes from 13.1 percent up to 22.1 percent and it does that all in a span of some 5 years. I ask my colleagues the following question: If railroads are saying they cannot operate profitably while we are putting 16.1 percent of payroll into this retirement program--and remember, they have three retirees for every worker; Social Security has three workers for every retiree; this program is nine times as financially vulnerable as Social Security--if they can't afford to pay 16.1 percent today and they are urging us to let them cut that to 13.1 percent, how can they come in 2025 and afford to pay 22.1 percent of payroll, which is what their numbers require? Does any Member here not believe that come 2019 the railroads are going to come to Congress and say, we would be required simply to maintain the trust fund at roughly one-fourth of what it would have been without this law, already four-fifths of the trust fund would be good? They are going to run to Congress in 18 years and say, we can't possibly pay a 22.1-percent payroll tax and remain in business. So you are going to either have to have the taxpayer come in and bail out this fund or you are going to have every railroad in America going broke. One question that is never answered is, if they can't afford to pay 16.1 percent today, how are they going to afford paying 22.1 percent in 25 years? The point is, they don't ever intend to pay that amount. They are, in essence, asking us, despite all the rhetoric to the contrary, to let them take four-fifths of the trust fund over the next 25 years and divide it up with retirees and then have the Federal Government guarantee the fund so 25 years from now we have one-fourth of the trust fund to pay benefits we have today, and the railroads, which cannot pay 16.1 percent, would be paying 22.1 percent then. Now, they are going to argue the system would be solvent, they can pay the benefits. But they can only do that with a 22.1-percent payroll tax. Nobody that I know believes that is a tax they can pay. Anyone who looks at this realizes if we adopt this bill, 20 years from now we won't be here, other people will be here, but the railroads will be saying, you are going to have to come and do something because we can't pay these taxes. Under the best of economic circumstances--and this is data from the railroad retirement board--under the best of circumstances, the bill before the Congress will deplete 53 percent of the trust fund by 2026. Under a more restricted and a more normal economic circumstance, it will deplete 75 percent of the trust fund. And under a pessimistic economic scenario it will bankrupt the trust fund in 20 years. These are not my numbers. These are the numbers of the actuaries of the railroad retirement trust fund. Now, I understand people want to pass this bill, so I put together an amendment which lets the railroads and the unions do what they want to do, which is take $15 billion out of the trust fund right now and invest it. That will become a private trust fund and they will have it in stocks and bonds and then they will earn on those stocks and bonds. The amendment I have offered says, look, do everything you are claiming to do here but don't reduce the amount of money going into the trust fund from the railroads and don't increase benefits until you have invested the $15 billion, and until you have earned a rate of return on it. And then when you are dealing with the interest and not the principal, you can do whatever you want to do. What this bill does is take the money out of Government bonds and allow it to be invested, $15 billion of it; then as that money earns interest, you could lower the amount the railroads are paying in, you could lower the retirement age, you could increase benefits, but only to the degree you were doing it with the interest you are earning. You could not spend off the trust fund, thereby putting the taxpayer at greater risk. I know if anyone defends the proposal, they will say, look, the trust fund does not go broke under the bill. In fact, I guess they would concede it goes down in value under the expected economic scenario by three-fourths. But there is still enough money to pay the benefits. That is only part of the story. The rest of the story is, the only reason there is enough money to pay benefits at this point under the bill is that it is assumed by them that the tax on the railroads to pay for the retirement benefits has risen from 13.1 percent to 22.1 percent. Does anybody believe the railroads are capable of paying 22.1 percent of the wages of all the railroad retirees into the railroad retirement trust fund? Are we not here today because the railroads say they cannot pay 16.1 percent? The whole logic, when you strip away the window dressing, is they want to lower the amount they are putting into the trust fund from 16.1 to 13.1 percent, to try to help the railroads. They have worked out an agreement to get the unions to support it by saying, in essence, $7.5 billion goes to the railroads and giving $7.5 billion to the union members. But the net result is the trust fund is $15 billion poorer 17 years from today than it is now. Even though you are earning a higher rate of return, because you are taking out huge amounts, you are depleting the trust fund. All I am trying to do with this amendment is say invest the money and every penny you earn belongs to the railroads and the unions. Forget about the taxpayer. But don't take the principal out, just take the earnings. Frankly, if this were some kind of reasonable debate, you might say let's take these higher earnings; part should go to the taxpayer because the taxpayer is paying a substantial amount of these benefits, part should go to the railroads, and part should go to the retirees. But I am saying forget that; take the interest, but don't take the principal. That is the essence of the amendment. I would like to submit the amendment. I hope my colleagues will accept it. I do not understand how it can be prudent public policy to set out a policy which, while claiming to get a higher rate of return, actually reduces the size of the trust fund available to pay benefits, between now and the year 2026, by 75 percent. How can that make sense? How can it be prudent public policy to set out a program which is salvaged only by the willingness of the railroads to pay to 22.1 percent of all wages into a trust fund, when today they claim they cannot afford to pay 16.1 percent? How can that possibly make any sense? What I am saying is don't deplete the trust fund. But every penny you earn, by investing it, you can give to the railroads and you can give to the retirees. But maintain the assets to protect the taxpayers. That is the proposal. I think it is simple and easy to understand. For those who want investment, it gives you investment. For those who want a better rate of return potentially, it gives you a better rate of return. But what it does not let you do is pillage 75 percent of the trust fund over the next 25 years. That it does not let you do. That is the essence of the amendment. I yield the floor.

Mr. GRAMM. Mr. President, the amendment is very simple. The amendment before us says you can invest the railroad retirement trust fund, you can invest it in stocks and bonds, but you cannot spend out of it until you have earned something on the investment. Under the bill before us, you lower the amount of money going into the fund and you raise benefits before one penny is earned, before one investment is made, and in fact you take money out so quickly that you deplete 75 percent of the trust fund before the tax on railroads has to rise from 13.1 percent to over 22 percent in order to maintain absolute minimum solvency. The amendment before us simply says invest the money, earn income on the money, use the income to lower taxes to fund railroad retirement and to increase benefits, but don't spend the trust fund's money, spend the earnings on the money. It is an eminently reasonable amendment. It is in no way a gutting amendment. If we could have gone to committee with a bill, I believe this would have been the solution. I understand my colleagues are for the bill, but I think this is a prudent way of doing it. Make the investments, do it exactly as the bill would do it, but don't spend the principal, spend the earnings. Don't do the things the bill calls for until you have the money in hand. I think that is a simple principle. The people understand it. I would appreciate if they would vote for it.

Mr. GRAMM. Mr. President, let me be brief. When all the people came to see me about 6 months ago--actually, almost a year ago, in relation to this bill--I sat down to listen to them, having spent about 3 years working on Social Security. Let me give you my response, based on something I think everybody can understand. Today we are really worried about Social Security because we have 3.3 workers per retiree. We are going to two workers per retiree. We are very concerned about our ability to pay Social Security benefits. I have done a great deal of work and written a fair amount of material and articles explaining how investing Social Security surpluses in interest-earning real assets will cause the trust fund in Social Security to grow and will enhance our ability to pay benefits. But I have never suggested that investing the Social Security surplus could allow us to lower the retirement age in Social Security from 65 to 60. In fact, under current law, it is rising from 65 to 67 even at this moment. I have never suggested that before any money is invested that we could cut Social Security taxes. Someone would laugh in your face if you suggested that. Now, into my office walk representatives of the railroads and unions, and they say: Look, we have a program which has one worker for every three retirees, not the other way around, which it is with Social Security. This retirement program is in much worse shape than Social Security. We want to invest our trust fund, and we are going to cut the retirement age, reduce the amount of time you have to work to get benefits, increase benefits, and reduce the amount that the railroads are putting into the program through two different payments they are making. First of all, if, in your retirement, somebody told you they could spend 75 percent of your trust fund, give you more benefits, and you could pay less in, I do not think you would believe it. Well, you should not believe it because it is not true. My colleague points out my chart ends in 2026. Why? Because in 2026 the payroll tax, which the railroads are saying have to be reduced for them to be able to operate--they have to be reduced from 16.1 percent down to 13.1 percent--by the time we get to 2026, the payroll tax is up not to 16.1 percent but 22.1 percent. Does anybody believe that the railroads can or will pay 22.1 percent of payroll into this retirement program? Nobody believes they can or will. Everybody understands that 20 years from now we are going to hear this knock on our door. We are not going to be here, but somebody is going to be here, and the railroads are going to say: My God, this retirement program is in terrible trouble, and under law our payroll tax is getting ready to jump from 13.1 percent to 22.1 percent. We cannot pay these taxes. At that point whatever these charts show is not relevant because everybody knows the railroads cannot pay that amount into this program and operate viably in the American economy. So what is going to happen? You have spent four-fifths of the trust fund or let the railroads spend four-fifths of the trust fund. You have a payroll tax of 22.1 percent. What is going to happen? They are going to say they can't pay it and they are going to ask the Federal Government to intervene. When you are talking about what good shape this trust fund is in, what is being called solvency here is having enough money to pay benefits for 4 years. There is no private retirement program under ERISA that would not be shut down if it had assets that would only pay for 4 years. My amendment is not what I would call a stingy amendment. My amendment says, OK, take this trust fund, and we are going to give you $15 billion right out of the Treasury. You can invest it on behalf of the retirees. And then you can spend every penny that you earn on that $15 billion. You can lower the amount railroads are putting into the system. You can give new benefits, but you cannot spend the principal. That is all my amendment does. If we do not adopt an amendment similar to this, I want to predict, even though I do not think any of us will be here 20 years from now--I certainly will not--that 20 years from now this retirement program is going to be on its back, the railroads are going to be being pulled down economically by having a 22.1-percent payroll tax, and we are going to have a transportation crisis in America. I do not know if anybody will ever look back at what we are doing here, but they should. Because what we have done, underneath all else, is that while we are doing some things that make sense--letting them invest the trust fund makes sense--we are literally letting them take $15 billion, we are letting the railroads pocket $7.5 billion, we are letting them give $7.5 billion in gifts to their retirees and workers, and we are setting up a situation where there is going to be a train wreck, and the taxpayers are going to be forced to pick up the pieces. Senator Nickles and I have no constituency. That is obvious. This thing has been sold. All the railroads have come to Republicans and said: This is great; it will be great for railroads. The unions have come to the Democrats and said: This will be great for the workers. And the bottom line is, nobody cares, apparently, about the taxpayer or about the future of this retirement program. So we are on the verge of cutting this, taking 75 percent of the money out of this trust fund and giving it away, committing ourselves to the railroads, having to pay a tax that we know they are not capable of paying, that we know cannot be paid. How are railroads going to put 22.1 percent of every dollar they pay to every worker into this trust fund 20 years from now when they cannot put 16.1 percent in today? They are not going to be able to do it. So all my amendment says is, let them invest it and do whatever they want to do with the interest, but do not let them spend the principal. What that will mean is, the trust fund will basically stay at its current level. They can reduce the amount railroads are paying in. They can increase benefits. Neither of those actions, in my opinion, is fiscally responsible, but they cannot simply pillage the trust fund for $15 billion over 17 years, which is exactly what happens under this proposal--and every set of figures used by every person in this debate all come from the railroad retirement board. All of them show that the trust fund, over the next 20 years, is depleted, under the expected economic projections, by 75 percent. That cannot be good public policy. I understand that Senator Nickles has an amendment. What I would like to do is yield the floor. If there is any more debate on this amendment, there can be, and I would be happy to have the amendment set aside. Senator Nickles can offer his amendment, and then it can be debated. And then we could have the vote on the two amendments and sort of see where we are. I yield the floor.

Mr. GRAMM. Mr. President, I call up amendment 2196. It is a short amendment, and I would like it read.

Mr. GRAMM

Mr. GRAMM. Mr. President, today I am joined by Senators Enzi, Bennett, Bunning, and Allard, in introducing the Terrorism Risk Insurance Act of 2001. This legislation will effectively, and in a straightforward way, address a crisis before us. The crisis of which I speak is, like a tidal wave, currently away from the shore. Its movement is little noticed until it reaches the shore, when its consequences will be disastrous. That is, the consequences will be disastrous unless we prepare for them now. This legislation will do that. Tidal waves are started by major seismic, earth shaking events. The earth shaking event that set this tidal wave in motion took place on September 11. Our Nation has responded admirably to the very visible problems caused by that day. We need to act just as admirably and effectively to address this hidden wave. This hidden wave nearing our shores is the unavailability to terrorism risk insurance, an unavailability that will strike a little more than one month from now. Already we are receiving signs from all across the country that terrorism risk insurance is becoming increasing hard to get, in many cases it is not available at all even today. That is because insurance companies have to be able to estimate and measure risk in order to be able to provide for it, in order to be able to spread the risk, and to do that so that the insurance is affordable. Right now, in the short term, they cannot do that. If they cannot do that, they cannot offer the coverage without jeopardizing the solvency of their companies and the value of all their other insurance policies. I want to make it clear that the problem before us is not one of the weakness of our insurance industry. It is a strong and vibrant industry. The industry needs no help, no bail out, no government assistance. And our bill would not give them any assistance, not one penny. Our bill addresses the needs of the insurance customers, the customers who, without this short term program, will not be able to find affordable insurance coverage against terrorism risks. What does that mean for the economy? It means that without insurance, banks will not make loans where there is an uncovered risk, a risk that what they are lending the money for might be destroyed or harmed by a terrorist. It means that simple, ordinary, everyday business transactions that rely upon the security of underlying insurance coverage will not take place. That means that, without this legislation, come January 1 and the weeks leading up to it a brand new weight will be placed upon our economic recovery just as it starts to get going. Will the insurance industry be able to figure out how to price this coverage? Yes. But history tells us that they will not figure it out right away. It will take a few months, maybe a couple of years. The legislation we are introducing today is a program that will work to solve this problem in the mean time. It has been put together in close consultation with industry, with the consumers of insurance products and with the insurance companies. It has been put together in close consultation with the White House and the Treasury Department, and it enjoys their support. This bill will not create any new, forever government program. It is short term in structure and intent. It is limited in its extent. It is designed to force the insurance industry to develop its own capacity to handle this new risk in a shortened period of time. From our discussions with the industry, with the state regulators, with insurance consumers, we believe that the industry will be up to the task. Central to our proposal is that this legislation would not provide one penny of federal assistance to the insurance industry. No insurance company will get a penny out of this program. All of the benefits of this program would go to victims of terrorist activities. The structure of our program is, for a two-year period that may be extended by the Secretary of the Treasury for only one additional year, to divide the terrorism risk with industry. We say to industry, here, you take the first risk. It is all yours. But we will define what that initial risk is so that you can price it. We will put limits on it. We will, for the period of this program, take over the currently unknown risk, the cataclysmic risk, while you develop the means for dealing with that new risk as well, as the industry always has. Under our program, in the first two years, the industry has sole responsibility for the first $10 billion of risk from terrorist events. The industry then has ten percent of the risk above that to encourage them to manage and become familiar with managing the catastrophic risk, while the Federal Government will carry ninety percent of that catastrophic risk. If a third year is added, then the industry will have the sole responsibility for the first $20 billion of risk. I believe that this is the most effective way not only to deal with this tidal wave approaching our shores but in fact to ward it off. The program is simple and understandable. The program does not have the victims of terrorism paying any extra premiums to the government for the coverage provided by the government. We don't make the suffering pay yet again. But we also do not expose the taxpayer to liability for frivolous lawsuits that might follow a terrorist event. With the Federal Government providing this insurance benefit, we do not also want to open the Treasury doors to frivolous or predatory litigation. But these limitations are narrow, and they are limited to the life of the program. They end when the Federal program ends. The limitations are similar to the limitations in place today against lawsuits brought against the federal government. We cannot expose the taxpayer to punitive damages at the same time that he is providing generous assistance to the victims of terrorism. There are a few things that we need to do before adjournment of the Congress this year. I believe that this legislation, that addresses this very serious problem, should be on that sort list of things that we need to do. I ask that the text of the bill and a summary of its highlights be printed in the Record.

Mr. GRAMM

Mr. GRAMM. Mr. President, today I am joined by Senators Enzi, Bennett, Bunning, and Allard, in introducing the Terrorism Risk Insurance Act of 2001. This legislation will effectively, and in a straightforward way, address a crisis before us. The crisis of which I speak is, like a tidal wave, currently away from the shore. Its movement is little noticed until it reaches the shore, when its consequences will be disastrous. That is, the consequences will be disastrous unless we prepare for them now. This legislation will do that. Tidal waves are started by major seismic, earth shaking events. The earth shaking event that set this tidal wave in motion took place on September 11. Our Nation has responded admirably to the very visible problems caused by that day. We need to act just as admirably and effectively to address this hidden wave. This hidden wave nearing our shores is the unavailability to terrorism risk insurance, an unavailability that will strike a little more than one month from now. Already we are receiving signs from all across the country that terrorism risk insurance is becoming increasing hard to get, in many cases it is not available at all even today. That is because insurance companies have to be able to estimate and measure risk in order to be able to provide for it, in order to be able to spread the risk, and to do that so that the insurance is affordable. Right now, in the short term, they cannot do that. If they cannot do that, they cannot offer the coverage without jeopardizing the solvency of their companies and the value of all their other insurance policies. I want to make it clear that the problem before us is not one of the weakness of our insurance industry. It is a strong and vibrant industry. The industry needs no help, no bail out, no government assistance. And our bill would not give them any assistance, not one penny. Our bill addresses the needs of the insurance customers, the customers who, without this short term program, will not be able to find affordable insurance coverage against terrorism risks. What does that mean for the economy? It means that without insurance, banks will not make loans where there is an uncovered risk, a risk that what they are lending the money for might be destroyed or harmed by a terrorist. It means that simple, ordinary, everyday business transactions that rely upon the security of underlying insurance coverage will not take place. That means that, without this legislation, come January 1 and the weeks leading up to it a brand new weight will be placed upon our economic recovery just as it starts to get going. Will the insurance industry be able to figure out how to price this coverage? Yes. But history tells us that they will not figure it out right away. It will take a few months, maybe a couple of years. The legislation we are introducing today is a program that will work to solve this problem in the mean time. It has been put together in close consultation with industry, with the consumers of insurance products and with the insurance companies. It has been put together in close consultation with the White House and the Treasury Department, and it enjoys their support. This bill will not create any new, forever government program. It is short term in structure and intent. It is limited in its extent. It is designed to force the insurance industry to develop its own capacity to handle this new risk in a shortened period of time. From our discussions with the industry, with the state regulators, with insurance consumers, we believe that the industry will be up to the task. Central to our proposal is that this legislation would not provide one penny of federal assistance to the insurance industry. No insurance company will get a penny out of this program. All of the benefits of this program would go to victims of terrorist activities. The structure of our program is, for a two-year period that may be extended by the Secretary of the Treasury for only one additional year, to divide the terrorism risk with industry. We say to industry, here, you take the first risk. It is all yours. But we will define what that initial risk is so that you can price it. We will put limits on it. We will, for the period of this program, take over the currently unknown risk, the cataclysmic risk, while you develop the means for dealing with that new risk as well, as the industry always has. Under our program, in the first two years, the industry has sole responsibility for the first $10 billion of risk from terrorist events. The industry then has ten percent of the risk above that to encourage them to manage and become familiar with managing the catastrophic risk, while the Federal Government will carry ninety percent of that catastrophic risk. If a third year is added, then the industry will have the sole responsibility for the first $20 billion of risk. I believe that this is the most effective way not only to deal with this tidal wave approaching our shores but in fact to ward it off. The program is simple and understandable. The program does not have the victims of terrorism paying any extra premiums to the government for the coverage provided by the government. We don't make the suffering pay yet again. But we also do not expose the taxpayer to liability for frivolous lawsuits that might follow a terrorist event. With the Federal Government providing this insurance benefit, we do not also want to open the Treasury doors to frivolous or predatory litigation. But these limitations are narrow, and they are limited to the life of the program. They end when the Federal program ends. The limitations are similar to the limitations in place today against lawsuits brought against the federal government. We cannot expose the taxpayer to punitive damages at the same time that he is providing generous assistance to the victims of terrorism. There are a few things that we need to do before adjournment of the Congress this year. I believe that this legislation, that addresses this very serious problem, should be on that sort list of things that we need to do. I ask that the text of the bill and a summary of its highlights be printed in the Record.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me identify myself with the excellent remarks of our colleague who just spoke. We are going to have an opportunity on Monday to determine whether or not we want to debate energy policy in America and whether we want to deal with the problem of human cloning. That will come on the cloture vote. If cloture is invoked on the railroad retirement bill, those two issues will be sheared off and we won't get an opportunity to vote on them. If cloture is not invoked, we would get an opportunity to vote yes or no on them, and then they would go forward as part of the railroad retirement bill, if they were adopted. I identify myself with the excellent remarks that were given. I must be getting 300 or 400 calls a day about railroad retirement. I am getting lots of letters--I am not getting the letters; they are coming, and I am going to get them some day when we get through with this anthrax business and I will be able to answer them. It frustrates me. I would like to try, as briefly as I can today, to explain this issue on railroad retirement at least as I see it. I will try to present the facts. We are all entitled to our own opinion, but we are not all entitled to our own facts. The first way, the best way to start this discussion is to explain how I became involved in the debate. About a year ago, I had representatives of the rail labor unions and the railroads come to see me to talk to me about a proposal they had to ``reform railroad retirement.'' I guess other things being the same, I am for reform. But when it became clear that they were talking about taking the sterile assets that are now sitting in a meaningless IOU in the Federal treasury and investing it in stocks and bonds and real wealth, out of which they were going to be able to pay benefits to railroad retirees, I think it is fair to say that even for an old jaded politician, I was excited about this bill. Into my office came all of these people, representing these major interests, very knowledgeable, very intelligent people who were there to lobby me on behalf of it. I guess it took me about 5 minutes to figure out that something didn't add up. Let me offer a little information to set the predicate for that. As everybody who has not been hiding under a rock somewhere for the last 25 years knows, Social Security is in trouble. We have gone from 42 workers per retiree, when we started paying Social Security benefits, to 3.3 workers today per retiree. We are in sheer panic--I am--about what we are going to do as baby boomers start to retire, and we move from 3.3 workers per retiree to 2 workers per retiree. While I may be the strongest proponent on the planet of taking the Social Security surpluses we have and investing them in real wealth to bring in what Einstein called the most powerful force in the universe, the power of compound interest, I have never claimed, nor has anyone ever claimed, that for the next 25 years that even the best investment program imaginable by the mind of man could enable us to raise Social Security benefits now, to lower the retirement age for Social Security benefits now, or to cut Social Security taxes now. I have not been here forever, but I didn't just come in on a turnip truck yesterday. I started with this knowledge that in Social Security, with 3.3 workers per retiree, we are looking at dramatic increases in taxes or dramatic reductions in benefits, and maybe both, and that an investment component could mean less in the way of reductions in benefits and less in the way of increases in taxes. But not by any imagination that I have could I have believed that we could with any kind of investment program in Social Security raise benefits today and cut taxes today knowing that in Social Security there is only 3.3 workers per retiree. And yet these people come to my office and tell me that we can have a railroad retirement investment program and that we can immediately slash taxes that are going to fund railroad retirement. We can immediately increase benefits. We can immediately change the retirement age. We are in the process now of raising the retirement age for Social Security from 65 to 67. And in walk these people saying to me: Look, with this little investment program, we can today change the retirement age in railroad retirement from 62 to 60. While I wouldn't have believed that for Social Security, let me give one more set of facts. Today in Social Security we have 3.3 workers per retiree. In the railroads, we have one worker per three retirees. The railroad retirement program is in nine times worse shape than the Social Security program. We have three workers per retiree in Social Security, they have one worker for three retirees in railroad retirement. And yet these people, highly paid, highly intelligent people came in to my office. They were lobbyists. I don't begin to act as if something is wrong with lobbying. The Constitution guaranteed them the right to come make this pitch to me. But with a straight face, they came in my office and said: If you will let us take $15 billion, we will invest it, we will raise benefits, we will lower the retirement age--and I am not talking about way off in the sweet by and by, I am talking about today--we will raise benefits, we will lower the retirement age to 60, we will cut taxes on the railroads that fund railroad retirement, and it will just be great. Now, I am sorry to say, I don't know what their pitch was to the 74 Members of the Senate who signed on as cosponsors, but that was their pitch to me. I didn't believe it. And I was right. I will explain to you why I was right. I didn't believe it because it didn't make any sense. And now that we have the railroad retirement board to work out all the numbers, let me tell you what the plan is and then show it in terms of the numbers and talk about the danger it creates. What must have happened is--and this is just theoretical, but it seems to me this is what happened--our railroads have had problems really since their formation because they got lots of assistance from the Government. They negotiated labor agreements that didn't make sense. They had massive featherbedding. When they started competing against trucks in the 1930s, they were forced to reduce their labor force. So they had this huge number of people, they have huge severance pay packages, and they have very high retirement benefits. So they got in financial troubles. I am sure that sometime last year, or the year before, somebody with the railroad said: Look, we have over $15 billion of real assets in the railroad retirement program. You need to realize that railroad retirement has never been self-sufficient; the Federal taxpayer heavily subsidizes it, and there is no private retirement program that could run with the benefits it is paying out, with a trust fund as small as their trust fund. So it has never been self-sustaining; the Government has always been a very heavy contributor to it. But what must have happened last year, or the year before, is somebody with the railroad said: Wouldn't it be great if we could get some of that money out of that trust fund? We would like to have it. But they could not figure out, to save their lives, how they could raid the railroad retirement trust fund without the unions going absolutely crazy. So it looks to me as if some really smart lawyer, lobbyist, economist--somebody--came up with the idea that the railroads should go to the unions and say: Look, if you will let us take $7.5 billion out of this retirement fund, we will let you take $7.5 billion out of it, and we will leave the Federal Government on the hook for paying this benefit. Now that is literally what happened. Today it is typical of the news coverage--and this is an article in the Roanoke Times. I don't know why my clipping service got it. They are talking about my opposition and Senator Domenici's and Senator Nickles', and they say we argue that taxpayers would be left holding the bag because the railroads and the unions want to take the money out of Government funds and invest it. It is not investing that I am against. It is pilferage that I am against. If they were investing the money, I would be saying hallelujah choruses right here before Christmas. I am for investing it. It is stealing it that I am against. How can I say such a thing? Let me tell you how. It is true. It is just that simple. What I have done here is taken the data from the railroad retirement board--and I am not a member; this is not my data; these are the facts. According to this line right here on the chart, over the next 25 years the trust fund balance of railroad retirement would look like this under the current system. They are closing in on $25 billion now, and that would rise over the next 25 years from about $20 billion to about $35 billion--still a very modest trust fund for a retirement program the size of railroad retirement. But we rejoice in it. Now if you listen to the proponents of this bill, they say: Look, all we want to do is take this money and invest it. They assume--and I grant them the assumption because I believe it is true that over the long term they can get 8-percent return on investment. Currently, they are not getting it on government bonds; it is an IOU from the Government itself. It is not really an investment. Investing it would be a good thing. I am for it. Wouldn't you believe that if you were getting no return now, and you had 8 percent after inflation, the value of the trust fund would go up? I mean, what investment can you imagine that--if you were getting an effective zero rate of return today and you started getting 8 percent, don't you think the investment would grow in value? Yes, it should be getting bigger. But what happens, if we adopt this bill, is the trust fund will start falling and will fall dramatically until the emergency provisions of the bill kick in and taxes are automatically raised on the railroads. What literally happens--and I want people to listen to these figures--under this bill is that the $15 billion is not invested, it is pilfered. What happens under this bill is that over the next 17 years, despite the fact that we are getting a higher rate of return on the money, the balance actually falls by $15 billion. How do you get a higher rate of return and end up with less money? You end up with less money because, before anything is invested, before one penny is invested, we are going to slash taxes on the railroads from 16.1 percent to 14.75 percent to 14.20 to 13.1, and we are going to lower the retirement age for beneficiaries, we are going to cut the time for vesting in pensions in half, and we are going to raise the value of many pensions. So what we are literally doing is this, if you work out the numbers. If it doesn't smell like a political deal to you thus far, it will when I give you the numbers. How much of the $15 billion do you think goes to the railroads? How much do you think goes to the employees? You would think, if it were just accidentally distributed by some program, one might get a penny more than the other and it might be a little bit different. Incredibly, over the 17 years, $7.5 billion of this pension fund goes to the railroads and $7.5 billion goes to the union members. Now what happens when suddenly you have a program where, despite the fact that you are getting interest, which you didn't before, over the next 17 years you have $15 billion less, because before you have invested a penny, you have cut taxes and you have raised benefits--what happens? The program starts having big-time problems. In fact, under their own numbers, what happens is, while the tax rate on the railroads gets down to 13.1 percent by 2004, by 2025, just to cover the portion for which they are liable under this bill, their tax rate would have to be up to 22.1 percent. The reason this trust fund does not go right through the floor is there is a provision in the bill that says if the trust fund is, for some reason, used up, and the reason is pilferage, that while taxes are being cut on the railroads now and raising benefits now, in the future taxes on the railroads are going to have to be raised to make up the difference, and that tax is capped at 22.1 percent. Imagine when we have been cutting taxes and increasing benefits and all of a sudden the railroad retirement program is in dire straits and the railroads have to raise the percentage of wages they put into the retirement program from 13.1 percent to 22.1 percent in 3 years, what is going to happen? They are going to run to Congress and say, we are going to go bankrupt. We are going to have to shut down every railroad in America. There is no way we can go from 13.1 percent of our wage bill going into this retirement program in 2019 to 22.1 percent going into it in 2025. We have let the railroads come in and take $7.5 billion. We have given the employees $7.5 billion. The Federal Government is guaranteeing this retirement program now. We get out to 2022, the bottom is falling out of the program, and so the trust fund, which would have been up here, would have been almost $40 billion under the current system, but now it is down below $10 billion. Remember, they invested the money. They are getting 8 percent, and the trust fund has gone from almost 40 to below 10? How could that happen? Because they are taking money out of the trust fund and giving it to the railroads and giving it to the retirees. To fill up this gap, let me give a figure. The year is 2026, 25 years from now. Now we have passed a railroad retirement bill that is loved. The railroads are for it. The retirees are for it. The unions are for it. It is wonderful. It has this cloak that says we are going to let them invest this money, but when we look at the numbers they are not investing the money. They are spending the money. So 2026 comes. We have a crisis in railroad retirement. The taxpayers are guaranteeing it. What kind of payroll tax would there have to be on January 1, 2026, to put the system back where it would have been had we never passed this bill that has 74 cosponsors? Listen to this. Hold your hat. We would have to have a payroll tax of 153 percent of wages on January 1, 2026, to put back the money that has been pilfered out of railroad retirement. In other words, if a person is paid $1,500 a month--or say they are being paid $1,000 a month. I guess they do not hire anybody at $1,000 a month, but it makes the arithmetic simple. If somebody is being paid $1,000 a month, $1,530 would have to be put into railroad retirement from the first paycheck in January of 2026 to get the trust fund balance back to where it would have been before the $15 billion was stolen. Does anybody believe that on January 1, 2026, the railroads are going to be able to pay a payroll tax of 153 percent? Nobody believes that. Nobody believes they are going to be able to pay the payroll tax of 22.1 percent, which the bill would require them to pay. Given the figures of the Railroad Retirement Board, if we pass this bill, the amount of money going into the pension fund from the railroads would go down from 16.1 to 14.75, 14.2, 13.1, and it would be at 13.1 in 2019. So we are right here. The bottom is falling out of the program. The law starts requiring money to be put back. So within a 6-year period, this payroll tax to fund this program has jumped from 13 percent to 22 percent, and we still are nowhere near where we would be if we had never passed this bill. In fact, as I noted, we would have to have a 153-percent payroll tax to get us back to where we were if we had never done this. That is not going to happen. Neither one of those payroll taxes are going to happen. What is going to happen is we are going to pass this bill and, boy, it is going to be loved. This is consensus. The railroads are for it. The retirees are for it. The workers are for it. It is true, if one looks at the numbers they are taking $15 billion right out of the trust fund. But it is a victimless crime, right? In fact, as one of the railroad executives says in the paper today, ``It is our money.'' It is their money. Well, what if we were taking money out of the Social Security trust fund and giving it away? After all, probably the guy who gets it, it would be their money. The point is, however, the Federal Government is on the hook to pay these benefits. There is nowhere near enough in the trust fund today to pay the benefits. When we give this $15 billion away, we are putting the taxpayer on the hook and come 2019, when the bottom falls out, the railroads--I am not going to be here. I do not know how many people are going to be here when it happens, but it is going to happen if we pass this bill. When the bottom falls out, the railroads are going to run in and say, we cannot operate and pay these kinds of taxes. Nobody is going to say, well, you should have thought about that when you participated in stealing $15 billion out of this trust fund. They do not say that. They are going to say, well, look, we cannot let the railroads go broke. So what we are going to do is we are going to have the Federal Government pay an even larger share of the cost of this retirement program. That is basically where we are. We have a proposal before us that claims it is reforming the program. It claims it is earning interest on the assets of the railroad retirement program. But if it is earning interest, why are the assets going down instead of going up? Because before one penny is invested, before one penny is earned, it slashes the amount of revenue going into the pension fund. It vastly increased the benefits being paid out. The railroads are for it because they get $7.5 billion. Railway labor is for it because they get $7.5 billion. Who pays the $7.5 billion? The taxpayer. Let me sum up by noting what we ought to do. I want to state a paradox. America loves consensus. I have to say when I go to my State, the people are sweeter to me now than they have been in a very long time. I think they are because they sense we are pulling together. We had this terrible thing happen on September 11, and I think for about 6 weeks we did have a pretty good consensus, and I was proud of it. Bipartisanship and consensus are not always good things. Let me repeat it because it is a pretty startling statement. Bipartisanship and consensus are not always good things. In fact, the Founders understood checks and balances. When labor and business get together, it is not always in the public interest. What we have in railroad retirement is literally a proposal to pillage $15 billion out of the railroad retirement trust fund over the next 17 years, give half of it to the railroads, half to the union, and the taxpayer ends up in a very deep hole in supporting railroad retirement. They will claim when you hear the debate: But when it goes to hell, the taxes on the railroads are automatically raised. They are, but only up 22.1 percent. To get back in the year 2026 where we would be if we never let the money be taken out, there must be a payroll tax of 153 percent. Obviously, this is not going to happen. What should we do? First of all, nobody wants to hear this stuff. When all the people came in to our offices, this sounded as if Christmas had come early, so 74 Members of the Senate signed onto it and gave it a big fat kiss. Now nobody wants to know the problem. Nobody wants to fix it. Here is how we can fix it and still dramatically improve the well-being of the railroad and the retirees. Take the $15 billion and invest it; don't pilfer it, invest it. Then out of the interest that we earn on the investment, once the money is earned, look at strengthening the trust fund, look at these very high taxes railroads have to pay, and look at benefits. But don't go out and spend the money first. Invest the money first, earn on the investment, and then look at using that to make the system safe and sound, first; and then to improve it, second. I would change the program by requiring, before any taxes are cut, before any benefits are increased, we make the investment and we actually have the money in hand. I do believe there is a very real problem of what we are doing--even if you have the money, and it is clear you don't. Here is another figure: To just fund the new benefits promised, even with the interest rate you could earn by investing the money, you would have to raise payroll taxes by 6.5 percent more. It would have to be 6.5 percent higher each year, for the next 25 years, just to pay for the lower retirement age, the quicker vesting and the more generous pensions. We are not raising payroll taxes when we increase the benefit; we are lowering them. We need to fix this bill. We are going to have cloture on it. I hope we have a chance to debate energy, which is a crisis issue, and too human cloning, because I believe the Senate would vote overwhelmingly to at least have a 6-month pause to look at it. That would also give an opportunity to come up with a rational way to improve railroad retirement. This is almost too good to be true, because it is too good to be true. There is no investment scheme that has ever been derived that would let you do what is being done here. If you look at the trust fund, it is clear it is too good to be true because it is not true. I hope, even at this late date, even though people are signed on to this bill, that people will look at it and give us a chance to fix it. I am going to offer a series of amendments. One of them will say don't cut taxes, don't raise benefits until you have made the investment and earned money to pay it from. Don't just draw down the trust fund, because right now we have a trust fund. Don't use it up now so we don't have it when retirees need it. Another amendment I will offer would be to not let the money be taken out of the Social Security trust fund to pay for these new benefits. These are things that need to be addressed. I have come today to basically explain how it is possible to be against this bill. It appears that everybody is for it, but it is a bad bill. It is a dangerous bill. It is a bill that puts the taxpayer in mortal danger. It is a bill that doesn't make any sense on its face. I don't know how anybody could have ever sold it. I am sure whoever came up with this whole deal of giving half of it to labor, half to management, and selling it to Congress as a reform based on investment--even though the trust fund goes down like a rock--I am sure whoever devised this stuff made millions. And they should have. The problem is, this isn't some kind of game. This is real public policy. The idea that we would have a bill that will literally pillage the trust fund of railroad retirement funds is a startling thing. This may pass. It probably will pass. I would rather it not pass on my watch. I am going to vigorously oppose it. I hope my colleagues, even at this late date, will look at these things. If somebody wants to debate this, if somebody wants to come over and present their figures, if they will let me know, I will come over and debate them on this subject. However, I haven't seen anybody present the argument for the other side. I believe there is no argument for the other side. What we are seeing is basically misinformation. The idea that we have railroads saying, ``All we want to do is invest the trust fund,'' when billions of dollars are being taken out of the trust fund despite interest that is supposedly being earned, obviously something is very wrong. I urge my colleagues, I urge people that follow these issues, to look at these facts, verify what I am saying and raise these issues. People writing about this in the media, don't be confused. I am not concerned about investing $15 billion. That is God's work. I am for investing $15 billion. What is happening, when the trust fund is projected to look like this line, and it is turning out to look like this, that is not investment. That is pillaging. That is taking money out of the trust fund. We need people to start asking: Why are we doing this when the taxpayer is liable: If they start asking, maybe we can fix it. I appreciate the indulgence of the Chair. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Madam President, you would think that in a proposal where you have had government bonds mandated as the basis for your retirement program--and, quite frankly, we have this in railroad retirement because railroad retirement has never been self-sustaining. It has received and does receive today huge Federal subsidies. You would think, taking $15 billion out of that trust fund and investing it in interest-earning assets, that the value of the trust fund would rise over time; wouldn't you? You have $15 billion you are going to invest. You are investing it right now in government bonds. They are really IOUs to the same people who are paying the interest. They are not even real assets. It is like an IOU that you put in one pocket and count it as an asset. But in any case, you would think since they are assuming an 8 percent rate of return after inflation, that this wonderful idea--in fact, I will read the quote from the chief executive of the Association of American Railroads. He says: What we hope to get out of it--That is this bill--is what any pension plan has, a more flexible approach to investment. Who is against that? Who is against getting a higher rate of return? But remarkably, almost unbelievably, if you grant that they are going to go from virtually a zero rate of return under the current program to 8 percent plus inflation, their own Railroad Retirement Board looks at the bill that is before us and concludes that in 17 years, after earning these interests payments, you have $15 billion less in the trust fund than you would have under the current system. That is pretty startling. You are going to invest at interest, and you are going to have $15 billion less in 17 years than you would have without having any earnings whatsoever. How is that possible? How it is possible that what we are about here is not investment but pilferage? Let me outline how all of this came about. At least I can theorize how it came about. Today, as a result of a bill we passed, when Social Security is going broke, we remarkably have $19.2 billion in the railroad retirement trust fund. If you calculated the present value of the liability of the railroad retirement trust fund, it would be huge as compared to $19.2 billion. Madam President, $19.2 billion is a lot of money, but it is not a lot of money to a system which has three retirees for every one worker. We are worried about Social Security when we have 3.3 workers per retiree. In railroad retirement, you have one worker for every three retirees. This $19.2 billion is a fairly small amount of money given the liability of the system and when its financial security is very much in doubt. If that is the case--nobody disputes that it is the case--why are we taking $15 billion out of it over the next 17 years? Let me tell you what I think has happened. I would have to say in my 24 years of debating issues such as this, this is the most remarkable one I have seen. I am sure there is something comparable, but it doesn't jump to my mind. Here is what I would say happened a couple of years ago. The railroads are having tough times, similar to many other industries. They looked at this $19.2 billion, and they said: This is somebody else's money. This is the money that is supposed to at least partially back up the retirement program. But wouldn't it be great if we could have $7.5 billion of it? We would just like to pilfer $7.5 billion out of railroad retirement. I am sure they hired some brilliant lobbyist lawyer and paid him several million dollars. He was worth every single penny of it. Here is the idea they came up with which is embodied in this bill: The railroads went to the unions and said: We want to steal $7.5 billion out of your retirement program. Needless to say, I am sure the unions must have said: Are you crazy? They said: What about this? At the very moment when the retirement age for every other worker in America to get full Social Security benefits is rising from 65 to age 67 where you get the full benefit--a big jump this year--what we will do is lower the retirement age for railway workers at the same time it is being raised for everybody else. In fact, we will cut it from 62, which is already 3 full years below Social Security; we will reduce it to 60. We will add a handful of new benefits, and we will raise the maximum benefit we will give. The net result is that over the next 17 years we will get $7.5 billion, and we will give retirees $7.5 billion. We will take the $15 billion out of the railroad retirement program. In fact, sure enough, the Railroad Retirement Board, in looking at this data over the next 17 years, despite ``investing'' their money, the trust fund will be $15 billion smaller 17 years from now than it would be under the current system. I think you have a problem. They say: OK, we get $7.5 billion, you get $7.5 billion, but what about our retirement program? It is just too good to be true. They said: Oh, it's not too good to be true. We will put the Federal taxpayer on the hook for the $15 billion. You get $7.5 billion and we get $7.5 billion, and the taxpayer will guarantee the money will be there. Let me go over what the railroads get. Currently, for their tier 2 retirement--which is just part of the retirement; it is not essential that people understand that to understand what is happening--today, they are paying 16.1 percent of payroll into this retirement program. They say: OK, look, next year, before any money is invested, before any returns could possibly be had, let's drop that from 16.1 percent to 14.75 percent. And then the next year, let's drop it from 14.75 to 14.2 percent. Then they say: If, in the future, when this $15 billion has been pilfered--they did not really say that; they just do it--if there is a problem, then you can raise the tax on railroads. But there is a cap on the amount you can raise it. So who is taking on this liability? What makes this whole deal work? How this whole deal works is, basically, the unions get $7.5 billion, the railroads get $7.5 billion, the taxpayer assumes another $15 billion liability, and the trust fund actually goes down by $15 billion. The final point was: Gosh, but how are you going to convince Congress of it? This is where it really gets brilliant. They said: OK, look, unions will get $7.5 billion, the railroads will get $7.5 billion, but what we will say is we are investing the money. Then Congress will say it is OK because they are investing the money. People are for investing the money. It makes good sense. The bottom line is, we have before us a bill that basically says we have a trust fund which now has $19.2 billion in it and has a projection, over the next 25 years, as to where it will be in terms of how much in assets it will have, given the money coming in, being paid in by railroad workers, and the amount of benefits that are being paid. Under the bill before us, because we are cutting taxes on railroads, even though the program has real actuarial solvency problems--no private pension fund in America could run a program like railroad retirement and not go to prison, but even though it has these problems, the bill before us, over 17 years, will take $15 billion out of the trust fund and will pay it out to the railroads and to the unions and to their members. Over 25 years, it takes out $28.7 billion that would have been in the trust fund, that will not be, even though the trust fund, under the current system, is earning a very small rate of return. And they are assuming a 8-percent rate of return plus inflation. I am sure people would look at these numbers and say it is not possible you could increase the rate of return severalfold and yet have the trust fund decline by $15 billion over 17 years. Yes, because the higher rate of return is really a smokescreen. What is going on here is pilferage. What is going on here is we are giving the railroads $7.5 billion and we are giving railway workers $7.5 billion and we are putting the American taxpayer in harm's way. That is what this bill is about. The House of Representatives passed it, and they passed it by a huge number. Why did it happen? How did it happen? It happened because the unions and the railroads are for it. You have a nice, catchy theme, ``investing in a higher rate of return.'' Nobody paid any attention to the details and, quite frankly, when business and labor get together, more often than not, society and the taxpayer are losers. Paradoxically, these kinds of consensus measures are generally harmful, not helpful. The public may hate contention, but it is checks and balances that basically make for good government. The House of Representatives passed this bill by a huge number because every railroad--last year, I must have had 50 lobbyists come to see me. I have a huge number of railroad retirees. I am blessed to have lots of railroads. I have one that runs right through the middle of my hometown with seven big-time trains a day. The lobbyists came to see me and said: Boy, you can help the railroads. You can help the railroad retirees. Everybody is better off. In fact, I am sure that somebody would say: We can't refute the numbers. That $15 billion is coming out of the trust fund, but it is a victimless crime. Railroads are better off; unions are better off; they received $15 billion. But who is worse off? The taxpayer is worse off. That is who is worse off. But in any case, all of these lobbyists, all this letter writing and e-mail converged on the House, and they passed this bill. It has now come to the Senate. It seems to me that we could stand to be reminded of what the Senate is supposed to do. Some of you will remember the story that Jefferson had been in France when the Constitution was written. When he came back from France, he was suspicious of the Constitution. He met at Mount Vernon with George Washington. They were having tea. He was asking Washington what the Senate was for. He understood what the House of Representatives was for. But what was the Senate for? So Washington, as many southerners, had this habit, which some people still have now with coffee that they had with tea, of pouring the tea into the saucer to let it cool, and then pouring it back into the cup and drinking it. Washington said, in a very famous story, the House of Representatives will respond to the passions of the moment; they will respond to popular clamor. But the Senate will be as the saucer, where there will be a cooling of reason, and the result will be a stronger, more stable, more responsible government. I understand that 74 people cosponsored this bill. I am not short on arithmetic. And I understand that, in the end, 51 Members in the Senate could pass a bill. Thank God we do have procedures where people who believe strongly can object and delay and cause debate. And I am going to do that. But I want to urge my colleagues, we can fix this bill. We can make this a good bill. I am totally supportive of letting railroad retirement invest the $15 billion. I would like to build a firewall where the people who are doing the investing have fiduciary responsibility, where they cannot promote some social agenda with railroad retirement money and, indirectly, with the Government's money. I would like to have some safety and soundness standards on the investment. Investing the money is one thing, but lowering the retirement age, expanding benefits, and cutting the taxes and the money going into the program is quite another thing. My proposal is, let's take this bill, let's go to the Finance Committee--we have never held a hearing on it; we have never had a markup on it--let's go to the Finance Committee, and let's agree to a program to invest the money, and then let's set up an actuarial system where we will look at the benefits of the investment, and to the extent that the system becomes actuarially sound, then--and after we have the money in hand--we could lower taxes, and then we could look at benefits. I do believe there is something innately unfair about raising the retirement age for 95 percent of the workers in America and cutting it for other people. How can that make any sense? How could any Member of the Senate go back to Iowa or Texas or Nevada and look their constituents in the face and say, we are getting ready to make you work 2 additional years to get full Social Security benefits, but we have lowered the retirement age from 62 to 60 for railroad retirement? How can you possibly justify that? I have plenty of railroad towns in my State. I had a lot of them in my old district. I don't think I could sell this in Inez, TX, which is a big railroad town. I don't think I could sell, at the same period we are raising the retirement age from 65 to 67 on everybody else, that suddenly we are going to cut it from 62 to 60 for railroad retirees. I am perfectly willing to support--I wanted to come over today and pledge--a bill that sets up the investment of the $15 billion with a firewall to keep politics out of the investment, assess actuarially where we are, let the Railroad Retirement Board assess it, and when it is clear that we have more money than we need, if, God willing, that ever happened, then we could lower taxes on the railroads; then we could raise benefits for the retirees. But should we not get the return first? How can it make sense in this bill to lower the retirement age, expand benefits, and cut taxes before one penny is invested? How can that possibly make any sense? How can you spend money you don't have? How can it make any sense whatsoever to have a program that, to quote the representative of the American railroads who said, ``what we hope to get out of it is what any pension plan has, a more flexible approach to investment''? If that is all they want to get out of it--I assume he said this with a straight face--if that is all they want to get out of it, I am for that. In fact, I am very much in favor of investing pension funds. But should we let them take $15 billion out of the fund over and above the interest they would gain from the investment, and should we let them do it before they have earned a single penny? I don't see how in the world you could justify being for this bill in its current form. I make a plea: I know 74 people have signed onto this bill. It is not the same bill they signed onto because this bill is now scored as raising the deficit by $15 billion. And there has been a new provision added. If you cosponsored this bill, you haven't cosponsored the bill that is before us because it has a special provision that says, while the deficit of the Federal Government under this bill goes up by $15 billion, we are going to pretend as if it doesn't. It actually says to the Congressional Budget Office and to the Office of Management and Budget, we want you to certify something that is false. We want you to, in essence, look the other way, and even though you have scored this as costing $15 billion, we want you to certify that it doesn't cost $15 billion. I believe most of the 73 people who cosponsored them did not understand it. They were for investing the money. Why not help workers; why not help the railroads? I don't think they understood the $15 billion of pilferage. But they didn't sign onto the bill that is before us because it has this provision that forces OMB and CBO by law to certify something that is not so. My point is, we could do this right, even at this late hour. We could take this bill to the Finance Committee. We could set up an investment program. We could put an actuarial program into effect as we earn these investment returns in the future. We could look, as the system becomes stronger, at cutting taxes on railroads, giving benefits to workers. But under the current bill, we cut taxes before any money is ever invested. We raise benefits before any money is ever invested. Despite the rate of return over 10 years, the value of the trust fund is $5 billion less than the current trust fund would be under the current system. Over 17 years, it is $15 billion less; over 25 years, it is $28.7 billion less. How do you earn more and have less? Pilferage, that is how you do it. That is our problem. We have two choices. One, we can look the other way and respond to the political pressure coming from two powerful political interests-- interests to which we are sympathetic. Who is hostile to railroad retirees? I am not. I can't justify having their retirement age 60 and Social Security 67. And theirs is already lower; it is already 62. We are going from 65 to 67, and they want to go down to 60. I can't justify that. But I am not hostile. I am not hostile to anybody who would want it. Who wouldn't want full benefits at 60? The point is, much of this program is paid for by Social Security money. Why should people who work for one industry be treated differently than people who work for other industries? I don't understand it. I don't know how you justify it. I don't guess people want to justify it. I am not unsympathetic to railroads. God knows, we want our railroads to be strong. We want to modernize our tracks. We want better equipment. I want railroads to make money. I want them to be successful. I have no hostility to them. We can't have a great and powerful economy without having successful railroads. But do we really want to pass a bill that pilfers $15 billion out of a pension fund and leaves the taxpayer liable for the great bulk of the $15 billion? We can avoid it. We can write a responsible bill. We could do it very quickly. The way we would do it is invest the money but don't start giving it away until we earn it. Don't start raising benefits and lowering taxes until we have gotten the return. And don't cut taxes and raise benefits more than the return grows. Those are just sound, simple principles. I want people to understand what is in this bill. It is true the railroads are for it. It is true the unions are for it. You might ask, well, if they can get together, if they think it is a good idea, isn't it a good idea? Well, when you read the fine print, why they are for it is they are dividing up $15 billion. Why I am against it is the taxpayer is becoming liable for the $15 billion. My colleagues on the other side will point out there is a provision that would allow the tax on railroads to rise when the pension fund gets into trouble. But it caps the amount that they can rise. We are cutting the amount they are paying in right now. Doesn't somebody suspect that when the roof falls in on this retirement program the railroads are going to come up here and say: If you make us pay all this, we are not going to be able to invest in railroads; it is going to hurt the economy, so let the taxpayer pay it? If what I am saying is not valid, I hope someone will stand up and say it is not valid. But if it is valid, I plead with my colleagues, let's fix it. We can do what people say they want to do--invest the money. And we can do it responsibly. But the current bill before us is not good policy. It is obviously good politics, especially to people who signed onto an earlier version of it some months or years before. To sum up, because I know other people are here who want to speak, we have a bill before us that is not the same bill people have cosponsored. As far as I am aware, no one is a cosponsor of the bill that is before us because the bill that was cosponsored by 74 of my colleagues did not have a provision in it that directs OMB and CBO to turn and look the other way and not score the $15 billion that would be scored as an increase in the deficit, some of which is coming out of the Social Security trust fund. No one signed onto that as a cosponsor. So it is not true to say that 74 people cosponsored this bill. They didn't. They cosponsored something close to it, but not to mandate that OMB, the Office of Management and Budget, and the Congressional Budget Office simply certify something they know is false. We can fix the bill by investing the money first, and then when income is earned, we can have a formula or procedure for the distribution of the money. This bill distributes the money before any investment is made. Finally, and most remarkably, even with the assumption that 8 percent is earned on the investment after inflation--and I am not disputing that you could not earn that today, I believe over the future that is a fairly conservative estimate. But even with that assumption, over 17 years, under the bill before us, the trust fund actually goes down by $15 billion compared to the current program. Over 25 years, it goes down by $28.7 billion. How do you get less by earning more? Pilferage. By simply taking the money out and giving half of it to labor and giving half of it to the railroads. That may be popular, but it is not good policy. It is not right. It puts the taxpayer on the hook, and I urge my colleagues to give us a chance to fix it. Let us go to the Finance Committee, where we can debate these issues and report back in 2 or 3 days a bill, which I think we could do. We can pass it and we can be proud of it. As it is now, we are in a situation where we are going to have a cloture vote on Thursday. I assume that it will pass. This is a cloture vote to move to the bill. Then we are going to have a cloture vote on the bill. Then we will have a cloture vote on a substitute. And we are simply going to be in a process that may or may not produce a result in this year. It is not so important when we do this, but it is very important what we do and that we do it right. I just want people to know that I am willing to work to try to do it right. I hope someone will take me up on it. I am a member of the Finance Committee. We have the chairman and ranking member here in the Chamber. I would like for us to have a markup on this bill and discuss these issues and see if we can find a way to do this that will work better and that we can be proud of. I think we could, and I wanted to be on record saying that today. I appreciate our distinguished floor leader for his patience. He is much beloved around here for that characteristic.

Mr. GRAMM. Reserving the right to object, when I go to the shopping mall, I am already hearing Christmas carols. We are closing in on Christmas. If we get off into extraneous matters, we are not going to complete our business. We need to pass a stimulus package, the appropriations bills, and deal with the insurance problem we have with terrorism. On that basis, I object.

Mr. GRAMM

Mr. GRAMM. Mr. President, in the 24 years I have served in Congress, I have seen many ideas debated; some of them good, some of them bad. I guess we are all prone, on the spur of the moment, to overstate things, but I think I can say without any fear of contradiction that of all the bills I have ever seen on which cloture has been filed, this comes closest to simply being an overt effort by two established and powerful special interests to literally pilfer the retirement fund that is available for railroad retirees, and the backing for that retirement fund. Part of our problem in debating a bill such as this is that there is a natural tendency in a partisan body when, in this case railroads and railroad unions get together, everybody sees this as an opportunity to jump on the bandwagon. I don't know that I would state it as any first law of political behavior, but normally when business and labor get together on something, it is generally an effort to reach deeply into the pockets of the American taxpayer. That is what the provision before us is, in reality. We have a retirement trust fund which has built up for railroad retirement, principally as a result of the action we took when railroad retirement was going broke and when Social Security was going broke. My colleagues will remember that we passed a bill changing the retirement age, setting up a procedure where the retirement age would rise--in the case of railroad retirement from 60 to 62; in the case of everybody else's retirement, from 65 to 67. We made other changes. In the process, back in the mid-1980s, we were able to bring some degree of temporary solvency to both these programs. The net result in railroad retirement is that we have built up a trust fund for railroad retirement of $19.2 billion. I remind my colleagues and everybody in the country who is listening to this debate that we talk about Social Security being in deep trouble now because we started out with 42 workers per retiree, and we are down to 3 workers per retiree. And we are heading over the next 30 years to 2 workers per retiree. Obviously, when you have two workers supporting one retiree, you are talking about a very heavy burden. In railroad retirement, we have one worker supporting three retirees. Every problem we have in Social Security, multiply it by 9, and you have some index of the problem in railroad retirement. Also, you have the implicit taxpayer guarantee behind that program. What has literally happened? What gave rise to the bill that is now before us in the form of a cloture motion is that railroads, facing some financial difficulty, got together with the railway unions and basically said: We have built up a base of financial assets--in this case Treasury bonds--of $19.2 billion. So what we should do is take $15 billion of that money out of the retirement program and roughly give half of it to the railroads and give half of it to the retirees. And, in the process, commit the taxpayer to deal with the problem if insolvency is faced in the future. What we have before us is literally an effort by two powerful vested interests to take $15 billion of the $19.2 billion in the railroad retirement trust fund and literally divide it up, with roughly half of it going to the railroads and roughly half going to the employees of the railroads and the retirees. In fact, the Railroad Retirement Board, in their data, in analyzing this proposal, has basically concluded that the net result of this will be that $15 billion will be taken out of the retirement trust fund over the next 17 years. So what the proposal before us does is pilfer $15 billion. Obviously, people have some shame; not much, but they have a little. So rather than saying we are simply going to steal this $15 billion and we are going to get 74 Members of the Senate to applaud when we steal it, they came up with a clever ruse. The clever ruse is to say: Look, let's take this $15 billion and invest it. Instead of having it in Government bonds, we will invest it in stocks and bonds. So as a result of this new investment and the new rate of return that we will get, we will be able to do some things to help the railroads and to help the employees. The problem is, before any investment is ever made, they are lowering the retirement age. They are cutting taxes on the employers. They are expanding benefits for employees, and when you add it all up, even with a higher rate of return that they hope to gain over the next 25 years, the trust fund will be $28.7 billion lower under this new proposal than it would be under current law. The $15 billion in question would be completely pilfered over the next 17 years. These are not my numbers. These are the numbers of the Railroad Retirement Board. What does the bill do? First of all, it immediately cuts taxes on railroads that they are paying in to support these retirement programs. It cuts their tax rate from 16.1 percent to 14.75 percent, and it does that next year. Then it cuts it again in calendar year 2003, to 14.2 percent. So the net result is that in very short order, $4 billion from the retirement trust fund is transferred from the trust fund to the railroads. I remind my colleagues that beginning this year, based on the Social Security solvency bill we passed in the early 1980s, the retirement age for American workers is starting to go up. We are moving from 65 to 67, the age that you have to be to draw full Social Security benefits. We are in the process of the largest increase in the retirement age in American history beginning this year. But what do you think the bill before us does for people who work for railroads? At the very instant that we are raising the retirement age for everybody else from 65 to 67, remarkably, almost unbelievably, we lower the retirement age for people who work for railroads from 62 to 60. Survivors of railway workers already get substantially better benefits than survivors from Social Security, but we raise those benefits. We change the vesting requirements. The net result is that over 17 years, roughly $7.5 billion is taken out of the railroad retirement trust fund and is given to the railroads. Roughly $7.5 billion is taken out of railroad retirement and given to beneficiaries by lowering the retirement age, by raising survivor benefits, by changing the vesting requirements--in essence, increasing benefits. $15 billion is pilfered over a 17-year period under this bill. You might say, well, this is sort of a victimless crime because the railroads are for it, and the railroad retirees are for it. It is their $19.2 billion. They are pilfering $15 billion, and it was their money to begin with. So where is the victim? In fact, 73 Members of the Senate signed on to the bill. It is obvious that has been the question. Where is the victim? The victim, as is usually the case when powerful vested interests get together, is the taxpayer. The taxpayer stands in line to cover shortfalls in the future. It is true that in the future, up to a point, you can raise the tax on the railroads. There is no provision for requiring employees to give back these benefits, or to pay higher taxes. Does anyone here doubt that when $15 billion is pilfered over the next 17 years, when the day of judgment comes and there is no money to pay railroad retirement benefits, especially if the very optimistic projections that are being made don't turn out to be correct in terms of the retirement fund, who is going to be paying the money that has been pilfered? The taxpayers. I know there are others who want to speak. Let me just say that it is not every day that you have a proposal to pilfer $15 billion from a retirement trust fund and have 73 Members of the Senate cosponsor it. It is not every day that you get railroads and railway unions together in support of something. But, look, when each one is getting $7.5 billion, that is a lot of incentive. This is about as bad a public policy as you could possibly propose. How in the world can anybody justify that at the very moment when everybody else's retirement age is rising to 67, we are going to lower the retirement age for those working for the railroad from 62 to 60? How could anybody stand up in any city or town in America and justify raising the retirement age to make Social Security solvent when its trust fund is many times bigger per retiree and bigger in billions of dollars than the railroad retirement trust fund? How can anybody justify raising the retirement age on the great mass of workers in America and lowering it for a privileged few? How can anybody justify, when you have a retirement program that has one worker for three retirees, adding benefits and cutting taxes when everybody knows that the retirement program is potentially insolvent? That is the problem before us. If the bill is in fact brought up, if cloture is obtained, then I think there have to be some changes. I do not per se object to investing the money. I think there have to be protections for the railroad worker to be sure the Government doesn't direct the investments to benefit some interests other than the worker. There needs to be some firewall between the investment committee and the Government. Then we need to look at the proceeds of these investments and ask ourselves: Are they needed to pay benefits in the future? In that case, they should be retained. If they are not needed, giving some of it back to the railroads and giving some of it back to the workers, I think, you could justify. But how do you justify giving all of their money back until any money is earned? Finally, how in the world can we justify lowering the retirement age for railroad retirement workers at the very moment that we are raising it for everybody else? This is a very bad bill, in my opinion. It is special interest at its worst. I know there are relatively few people who are against it. But people who are against it feel very strongly about it. So we intend to resist. I hope someone out in the country will take a look at these numbers I am talking about. You have to have some pause when the Railroad Retirement Board, which oversees the retirement fund, clearly says that in 17 years, if this bill is passed, there will be $15 billion less in the trust fund than if the bill is not passed, and $7.5 billion has gone to the railroads and $7.5 billion has gone to railroad workers. Yet the liability and the solemn commitment of the Federal Government to these retirees has not changed. So if they have gotten $15 billion richer, and the commitment has not changed, who is $15 billion poorer? The same person is always poorer when special interests get together to benefit themselves; that is, the American taxpayer. That is why I am opposed to this bill. I yield the floor.

Mr. GRAMM. I object.

Mr. GRAMM

Mr. GRAMM. I object.

Mr. GRAMM. I object.

Mr. GRAMM

Mr. GRAMM. Mr. President, first I thank Senator Byrd for his speech. I want to clarify exactly where we are, exactly what the rules of the Senate are, the issues I believe are involved, and then I will make a point of order. I think I can do all that fairly briefly. We have before the Senate a bill which is the House bill, H.R. 3090. That bill has been brought to the floor of the Senate. Now there is an amendment to that bill in the nature of a substitute, which is pending. Part of that substitute is Senator Byrd's $15 billion amendment, but $67 billion has to do with tax and spending provisions as diverse as giving Federal funding for health insurance for the unemployed and an innumerable list of large and small items to be given some form of subsidy or tax treatment. In the 2001 budget, we reached a conclusion about a provision we added to the old Gramm-Rudman law in 1990, which gave emergency designations, where you wrote a budget, the budget was binding, but if the Congress and the President agreed, there was not a point of order against a provision. It was decided in the 2001 budget that this process had been greatly abused and so it was changed. It was changed so there would still be an emergency provision for defense-related matters, but there would not be an emergency provision to waive or get by the budget constraints that we had imposed on ourselves for non- defense matters. The point of order that I will make is not a point of order that Senator Byrd's provisions are not emergencies. They are not a point of order against provisions that would use poultry waste to create energy. It is simply a point of order that says we do not have a procedure whereby you can protect yourself in advance against a budget point of order except in strictly defined areas related to national defense, so that the waiver that is written into the bill is basically a waiver which is banned under the budget process as it was amended by the 2001 budget. That is the point of order that I will make. Senator Byrd has given a list of concerns that we all share. I do not believe any Member of the Senate is less concerned about security of our homeland and our people than any other Member of the Senate. The President, whether he is right or whether he is wrong, said the $40 billion that we have given him, which he is in the process of spending--$20 billion of which we will have an opportunity to set partial priorities on--is sufficient through the end of the year. At the beginning of next year, if more funds are needed, he would like the opportunity as President to review the need, to involve the Cabinet officers and members of the executive branch and potentially independent agencies in doing a comprehensive review, and to send a request to the Congress for those funds. The question proposed by the Byrd amendment, which is only a small part of the bill against which I make a point of order, is the basic approach that we should act now and that we should set these priorities as Congress. I believe it is a joint process involving the President and the Congress. The President has said that he would veto a bill that breaks the budget caps, even with the best of objectives. I make this point of order, not because it solves our problem by killing the underlying substitute, but because I see it as an important step in the right direction. The problem is we have our ideas as Republicans. Democrats have their ideas as Democrats. In this case, for the first time since September 11, we in the Senate have not successfully been able to come together on a bipartisan basis. So rather than spending the rest of this week making partisan speeches where Democrats point out and vilify some part of the Republican stimulus proposal and we pick out some small provision and burrow in on it--rather than waste the week in doing that, my objective in making the point of order is to make it clear that the provision before us cannot pass and begin the process whereby we go into negotiations, hopefully involving the House and the Senate, Democrats and Republicans and the White House, to try to come up with a stimulus package. I think the American people want us to work together. Working together means I am not going to get everything I want. Our Democrat colleagues are not going to get everything they want. But in the end, I believe we can produce something that will be worthy of being adopted. Mr. President, I make a point of order that section 909 of amendment No. 2125 to H.R. 3090 is in violation of section 205 of House Concurrent Resolution 290, the fiscal year 2001 budget resolution. Sustaining this point of order will not bring down the bill itself. The House bill will still be there. It will then be subject to amendment if we work out a bipartisan compromise. But it will pull down the committee substitute.