Phil Gramm

Mr. GRAMM

Mr. GRAMM. Madam President, I thank the distinguished chairman of the Finance Committee. I congratulate him on the new leadership he has brought to the committee. I can't imagine a chairman doing a better job under more difficult circumstances. He has impressed everybody with his fairness to both Republican and Democrat Members. I thank Senator Baucus for working with us on a bipartisan basis. The product before us is not perfect, but then we are not in the business of perfection. And there is still an opportunity to improve. I congratulate them. There are four things I need to do, and I have only 10 minutes to do it so I am going to try, even though I speak very slowly, to do it quickly. Amendment No. 736

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GRAMM

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 365

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank the majority leader for moving to bring this bill to the floor of the Senate. As many of my colleagues know, the Congress has not reauthorized the Export Administration Act on a permanent basis since the early 1990s. As a result, we have been in a period where we have sought to get multilateral action on export controls to protect critical national security secrets, but we have had a very difficult time having standing on those issues among our allies when we do not even have a regime in place to monitor exports coming out of the United States of America. I think it is a terrible indictment of the Congress that for so many years we were unable to enact a bill to restore our export control authorities. I understand that these are very difficult issues, and they are difficult for a very simple reason: the Nation has apparently conflicting goals. We want to export high-tech items, we want to dominate the world in new technology, we want new innovations to occur in America, and we want to be the principal beneficiary of the technological revolution that is changing our lives and the life of every person who lives on the planet. And to do these things, we want Americans to be able to sell high-tech products on the world market. Wages in these industries are among the highest wages in the world. They really will determine the future of economic development on the planet, and it is a very high American priority to see that we generate these new technologies, that we generate these new jobs, and that Americans be the highest paid workers on the planet. Our problem comes in that we also have an objective of trying to prevent sensitive technologies that have defense applications from getting into the hands of people who might, at the current time or in the future, become adversaries of the United States of America. First of all, I think we have to admit to ourselves that there is an apparent conflict in these two goals and, hence, you have the difficulty in dealing with this problem. Now, I want our colleagues to understand that, first, the Banking Committee has very large jurisdiction as it relates to national security. In fact, other than the Armed Services Committee, no committee in Congress has authorizing jurisdiction in defense that rivals the Banking Committee. Let me give some examples. The Defense Production Act is under the exclusive jurisdiction of the Banking Committee. The Trading with the Enemy Act is under the exclusive jurisdiction of the Banking Committee. The International Emergency Economic Powers Act, which has frequently been used for export control purposes, is under the exclusive jurisdiction of the Banking Committee. The Export Administration Act, which is before us today, is under the exclusive jurisdiction of the Banking Committee. The Exon-Florio amendment, which set up the process whereby we look at foreign ownership of defense industries, to look at the national security implications of foreign investments and mergers, is under the exclusive jurisdiction of the Banking Committee. Sanctions bills that imposes economic sanctions against any country, whether it be the Iran-Libyan Sanctions Act, or whether it be any sanction imposed in the future, would be imposed in legislation that falls under the jurisdiction of the Banking Committee. Quite frankly, I believe some of this dispute is about jurisdiction. I did not write the rules of the Senate, but I believe that when this jurisdiction was put under the Banking Committee, it was the right decision because the Banking Committee is basically the Banking and Economic Committee. These issues have to do with economic matters that have defense implications. I think the correct decision was made in placing these items within the jurisdiction of the Banking Committee. We have spent 2 years exercising our responsibility in trying to come up with a workable and, I believe, if I may say so immodestly, a superior Export Administration Act. We have held extensive hearings on the Export Administration Act. I want to show my colleagues some of the studies that have been done that we have looked at. We have had the authors of these studies appear before our committee. The first, of course, is the now famous Cox Commission report. This was focused on China, and it was focused on the loss of American defense secrets. The Cox Commission report made a series of recommendations. Those recommendations are now embodied in the bill that is before the Senate. Rather than trying to go through all of the elements of this lengthy report at this time, which obviously would empty the Chamber for several days as I would be standing alone talking about them, given how voluminous they are, I will share with the Senate one point that Chris Cox made in presenting these reports to us and giving us the recommendations which we have incorporated in this bill. And this is critically important because I have colleagues who say that now is not the time to do this bill because of our recent problem with China. I say to my colleagues, we should have done this in 1995, but given the problems we have had with China, given their irresponsible behavior, we need this bill in place now more than ever. If it was not the time to do this 3 weeks ago, it is the time to do it today. I say the time to do it was 5 years ago, and we certainly need to do it today. Chris Cox, in looking at the loss of technology to China, cautioned the committee on something that I think every Member of the Senate, as we begin this debate, needs to be cautious about. What he cautioned us about was doing feel-good things, doing things where we pound our chest and act as if we are doing something, when in reality we are not achieving anything. One of the things I am very proud to say about this bill is that there is no feel-good provision in this bill. Everything we did we did because we believed it would work, not because it simply made us feel good to place it in the bill. The quote I want to read from Chris Cox is the following: We ought not to have export controls to pretend to make ourselves a safe country. We ought to have export controls that work, and you have to assume that if the Ministry of State Security in the People's Republic of China can gain access to the computers at Los Alamos, they can probably gain access to the Radio Shack in Europe. One of the fundamental principles of this bill is that we want to focus our attention on technologies that have defense implications, that are significant, and where we have some hope of being successful in controlling those technologies. When a million copies of a computer have been manufactured, when they are sold at Radio Shack in Bonn, when there are a million distributed worldwide, there is no possibility that we can keep that computer from falling into anyone's hands who might be potentially hostile to the United States of America. We might want to do it. We might wish we could keep an agent from a foreign country from going into Radio Shack in Bonn and buying this computer, but when there are a million copies of it worldwide, only divine intervention could keep someone who wanted that computer from having it. So rather than waste our time and energy on products that are sold by the millions, we try to focus our attention in this bill on trying to deal with those technologies where we have some realistic hope of being successful. Our current Secretary of Defense, Donald Rumsfeld, said it best when he said we need to build higher walls around a smaller number of things, and that is what we have tried to do. The next point that I want to raise from one of the witnesses before our committee I think reinforces what Congressman Cox said. It is from Donald Hicks, who is the former Under Secretary of Defense for Research and Engineering and chairman of the Defense Science Board Task Force on Globalization and Security. Here is what Donald Hicks said. He refers to what he calls the ``utter futility of the U.S. attempt to control unilaterally technologies, products, and services that even its closest allies are releasing on to the world market.'' This study in my hand is the study that was done by Under Secretary Hicks making this point. The next quote I want to give is from John Hamre, who is the former Deputy Secretary of Defense. We all knew him when he was the staff director of the Armed Services Committee. Here is what he says on this subject: America needs effective export controls to protect its national security. Our current system of export controls fails that test and fails badly. In ultimately approving 99.4 percent of the requests, we are not really protecting our security. In fact, we are diverting resources from protecting the most important technology and products. That is a critical point of this bill. When we have a system where we are approving 99.4 percent of the requests for licenses, we have a system where many things are in the system that should not be in the system. We are granting licenses on computers that are being manufactured by the millions and sold all over the world. We try to focus our attention where it can do us the most good. Frank Carlucci, the former Secretary of Defense and former National Security Adviser, gets right to the heart of it when he says: But we should do only that which has an effect, not that which simply makes us feel good. Many technologies are uncontrollable, given the access to the Internet. Others can and will be supplied by our competitors. Our job, your job, is to strike the right balance. Don't help our enemies. But at the same time, allow and encourage innovation and research to flourish. We have spent 2 years looking at all of these studies, having the authors of all of these studies appear before our committee, and in each and every case their recommendation to us is quit doing things that make you feel good. Quit forcing us into a mechanism where we are having to deal with thousands of items, when 10 are really important. By dealing with thousands, we are not paying enough attention to the 10 that ultimately affect American security. We have put together a bill that I believe dramatically improves the export control process, the export control review mechanism that is used, and greatly enhances national security. I am proud to say this bill is supported by the President. The President said in very simple terms, ``I believe we've got a good bill and I urge the Senate to pass it quickly.'' He said this in the East Room of the White House on March 28. The bill before the Senate has been endorsed by the Secretary of Defense, by the Secretary of State, by the President's National Security Adviser. We gave them an opportunity when the new administration came in, to take the bill we had worked on, and go through it in detail. They suggested some 21 changes. We adopted those changes. In several cases I thought the previous bill was stronger, but we adopted those changes. I think in the process, on net, we have improved the bill. What does the bill do? The bill strengthens national security. No. 1, and most importantly of all these other things, while it doesn't sound as robust as these other things I will mention, it is actually more important. We focus the attention of the export administration process on defense sensitive items where we have some hope of being successful. We set up a procedure whereby the President is given tremendous powers to negotiate international agreements with our major trading partners to cooperate to try to prevent sensitive technologies from getting into potentially hostile hands. We establish new criminal and civil penalties for knowing and willful violations. One of our problems under the current situation we face is, for example, that with the question of an illegal transfer of missile technology to China, given the laws that are in place, even if the parties are convicted, the penalties would be trivial. No one will call the penalties in this bill trivial. The penalties in this bill begin with $5 million for a violation. In the case of multiple violations, the penalties could run into the hundreds of millions of dollars. We have tough prison sentences for knowing and willful violations. When we have those penalties, we affect people's behavior, which is what we need to do. Again, it is very difficult to enforce these laws. It is difficult to prove intent. Knowing it is difficult to catch people, we wanted to have very severe penalties when they are apprehended, prosecuted, and convicted. We strengthened the hand of the national security agencies by, for the first time, giving them a formal procedure by which to be involved in this process. We were very concerned that in the previous administration the Defense Department was in a position of not being in concurrence with some decisions that were being made but not having an effective way to show it did not agree. So we provided a process whereby if any member of the review panel--and we would assume in general it would be the Defense Department--objects, that individual, with the concurrence of the designated political appointee in his or her department, has the ability to object and force that decision to the next highest review level. That is a substantial strengthening, in my opinion, of the process. We have greater predictability in the process, as well, which is important both for national security and economic reason. I will end with this: We do have a cloture motion. At some point that petition may be filed, because it is critical to national security we get on with this process. I conclude by talking about the balance we are trying to establish. We want a balance that allows us to provide for the national security of the United States, but on the other hand, we want to be able to be the dominant high-tech manufacturer in the world. Please remember, despite any feel-good speech we could make, most high-tech companies have operations worldwide, so when they are developing a new product, they can develop it in Germany or they can develop it in Dallas. If we have an export control process that is cumbersome or inefficient or costly or overly burdensome, they will develop these products in Germany and not in Dallas. That is harmful to our security, and it is harmful to people who are working in America. This bill is good for security because it restores the expired control authority. It adopted the recommendations from the studies I referred to earlier, such as the Cox Commission and the commission studying proliferation of weapons of mass destruction. It protects sensitive U.S. goods and technologies. It strengthens the role of the national security agencies, and it toughens criminal and civil penalties. That is how it strengthens national security, why it is good for national security. Why is it good for trade and for job creation and for the economic development and economic dominance of the United States of America? No. 1, it streamlines controls and procedures. No. 2, it removes ineffective controls where we know an item is mass marketed. A million copies are sold on the world market, and an American company trying to get market share ends up, under current practices, being delayed for long periods of time to get approval to sell something that is readily available on the world market. That makes no sense and it burdens the process to such a degree that we are not paying attention to the things that are really important when we are doing those things. This bill changes that, it fixes that problem. This bill brings certainty and transparency to the licensing process. When somebody applies, they know how the process works. They know what the timetables are. They know they are going to get an answer--yes or no. As anybody who has ever been contacted by a high-tech manufacturer knows, what they want to know is, yes or no. If the answer is no, they can deal with it. If the answer is yes, they can rejoice. What they cannot deal with is no answer, which is what the current process is producing, even though it is eventually approving 99.4 percent of the applications. This bill seeks to restore the international cooperation that we had under the cold war export control regime, where we had multilateral agreements and where we could prevent things from being sold by one country or another to our potential adversaries. This bill, first, sets up the best system we can set up given we are acting unilaterally, but it also gives the President strong new directive to go to England, to go to Germany, to go to Japan, and try to work out multilateral agreements, and then this bill automatically makes those binding. Finally, it creates a framework compatible with the high-tech economy in which we live and work. We have currently set into static law the number of MTOPS, millions of theoretical operations per second, that a computer could generate as a condition for export, when we know that this number is doubling every 6 months. So what did this provision of the law do? What it did was put American producers at a disadvantage because they would have to go through our export control process, while their competitors in Germany and Japan could rush right out into the marketplace. Our producers would fool around, trying to get a Presidential decision to update the standard, generally with legions of high-tech people coming to kiss the President's ring and in some cases attend his fundraisers. That is an unworkable system. It breeds corruption. It hurts America. It does not enhance security. So we in this bill we repeal the MTOP limit and set out a process where the focal point is not on something that is doubling every 6 months--we cannot change that, we cannot legislate it away. I do not question the sincerity of the critics of this bill. I do not think their hearts are any less pure than mine. But I would like to say that I don't take a backseat to anybody in America in supporting national defense. I was in the House, and I helped write the budget in 1981 that rebuilt defense and helped fund Peace Through Strength that tore down the Berlin Wall. I am concerned about American security. My dad was a sergeant in the Army. I am from a part of the country that lost a war. I understand something about national security and why it is important. So while I do not doubt that I have colleagues who have national security concerns, I have those concerns as well. They are reflected in this bill and its provisions. I believe we put together a good bill. I know that not everybody agrees with that. We got a vote of 19-1 in the Banking Committee. I have been the ``1'' many other times, on other committees under other circumstances, and that didn't make me any the less right that the other 19 people voted the other way. I understand that. But we have come to the point where we have to make a decision. I urge my colleagues, let's go to the bill, let's make our cases, and I will pledge to them if they convince me that they are right--I helped my colleagues in the committee write the bill the way we wrote it because I thought it was best, but if there is a better way, I am willing to support changing it. I cannot speak for other people. But if my colleagues can convince me there is a better way of doing it, I will do it that way. What I do not think I can be convinced of is that the best thing to do is to do nothing, that the best thing to do is to continue to limp along without having an effective process in place. I am concerned about the potential threats we face as a nation. I think we need this bill to help meet those threats. I urge my colleagues to support the bill, but if they are not going to support the bill, tell us how they would make it better, let's look at it, let's have votes on it. Again, anybody who has a way to make it better, I am willing to support it. I do not think we have reached the perfect bill yet, but I do think we have a dramatic improvement on the status quo. I thank my colleagues. I thank Senator Enzi and Senator Johnson for the great work they have done. I have never seen a Member get as involved in issues as Senator Enzi has been involved in this process. I have never seen a Member of the Senate who went to the actual meetings of these agencies and sat for hours, trying to figure out what they do and why they do it and how it works. The quality of this bill is in large part due to the work that he did and the work he did with Senator Johnson on the International Finance and Trade Subcommittee. I thank Senator Sarbanes. This is a bipartisan effort. Senator Sarbanes and I are far apart on some kind of mythical, philosophical line. But I think the reality is that we have been very effective in legislating and we have been effective because we have tried to work on a bipartisan basis. If we can work in a bipartisan basis, it can be done. I thank my colleagues for their leadership and their cooperation. I am hopeful we will pass this bill. I hope after the debate our colleagues who are concerned about the bill will be convinced--not necessarily to be for it--but will be convinced that maybe it is an improvement over the status quo, and maybe it is not quite as bad as they would think. I yield the floor.

Mr. GRAMM. That is not right.

Mr. GRAMM

Mr. GRAMM. Mr. President, as chairman of the Banking Committee, I support this amendment. Obviously, nothing in the proposal actually changes banking law, it merely sets out budgetary assumptions. Broader issues are involved and I pledge to both authors of the amendment to hold hearings or otherwise deal with these broader issues. Given that understanding, I ask our colleagues to not force a rollcall vote so that we can save that time and get on about our business.

Mr. GRAMM. I would ask for a voice vote.

Mr. GRAMM

Mr. GRAMM. Mr. President, I want to give a very brief synopsis of my argument for the use of reconciliation. We have had an extensive debate on the floor of the Senate. We are going to adopt a budget at some point. I hope it will be to my liking, but we are going to adopt one whether it is to my liking or not. We are going to go to conference. I hope to be a conferee, and I am confident the conference report will be more to my liking if this bill is not. In any case, we want to be sure we have an opportunity to have an up- or-down vote on the President's tax cut or something very close to it. Obviously, there is no way we can make people vote for it, but we want to be sure that a new President with a new agenda gets an opportunity to have his program voted on. We obviously are at an impasse as a Senate on naming conferees. When we worked out this powersharing agreement--an extraordinary agreement, in my opinion, and a very generous agreement from the majority leader, in my opinion--one of the things that was not worked out is what do we do about conferences. We believe if we pass a tax bill in the Senate and it requires a conference, we do not want to get into a position where we simply try to pass the House bill. It may not be the final product we want. That does not make for good law to do something like that. We ought to be able to name conferees, and on a tax bill we adopt, obviously we believe we should have a majority on the conference committee. Unfortunately, since we could not work out a unanimous consent agreement, the only way we can be assured that we have this opportunity to make the case and have an up-or-down vote is through reconciliation. When reconciliation was used to raise taxes in President Clinton's first year in office, not one Republican voted for that tax increase, but no one challenged the right of our colleagues who were in the majority then to use reconciliation. No one challenged that right. It was used. In 1997, in the budget when reconciliation was used to adopt a bipartisan tax cut, that was a hammered out agreement between the Republican majority then in both Houses and President Clinton. No one challenged our right to use reconciliation for that process. Now we have a situation where we are trying to do for our new President what President Clinton did. We are trying to follow a procedure that we followed in 1997 when no objection was made. We understand strong feelings. We are sorry we could not work this out, but in the end, we believe the process is the right process, and given our inability to work out an agreement, we want to use it. That is why I urge my colleagues to vote to allow us to use the same process that has been used over and over since the budget process first started. I yield the floor.

Mr. GRAMM. I ask for the yeas and nays.

Mr. GRAMM. Mr. President, I thank the distinguished chairman of the Budget Committee. This has been a long, hard process and we are only part way through it. Senator Domenici and I don't always agree at every single moment, but my admiration for him constantly grows as the years pass and I have an opportunity to work with him more. We are getting ready to have a serious debate, and I don't want to in any way infringe on it by getting into any kind of partisan bickering, but I did want to respond to one point that was made earlier when we didn't have time to respond. I can be brief about it. Some of our colleagues lamented the lack of bipartisanship on the budget. I want to respond, with all due respect, that bipartisanship is a two-way street. Since we started considering the budget, we have had amendments offered by Democrat Members of the Senate to spend another $697 billion over the next 10 years. This is coming on top of the last 6 months of last year, where we added $561 billion to the underlying spending projections of the Federal Government over the next 10 years. I just want to say that never in that short a period in American history, to my knowledge, have we ever had a Congress or a Senate propose more spending in a shorter period of time. I guess I would say that you can't have it both ways. You can't have the bipartisanship you seek and, at the same time, propose that level of spending. Having gotten all that out of my system, let me turn to the issue before us. I thank Senator Byrd for his willingness to talk to Senator Domenici, to me, and to others, in trying to find a way out of this conflict. When you serve in the Senate, when you have competing visions for America's future, when you believe in what you are doing, it is easy to get into conflicts that are unavoidable. But when they are avoidable and you don't avoid them, it is not only poor legislative strategy, but I don't think you are living up to the high standards of this great institution. So when Senator Byrd raised a concern about using reconciliation on the tax bill, even though we feel as strong on our side, based on the precedents that have been used, including the tax increase when President Clinton was President, and the tax cut that was part of reconciliation in 1997, we decided that any time you can accommodate the concerns of another Member without undoing your ability to have a chance to achieve what you want to do, that you ought to do it. So we undertook what I call a fairly extensive negotiation. We met three or four times off and on. We submitted a proposal in writing. Just to refresh my colleagues' memory, we have about four or five people who work with this law every day. Senator Byrd wrote most of it. But to most Members, and almost everybody else in America, it is all gibberish. Basically, under reconciliation, we have a very powerful tool that allows you to have special privilege in implementing your budget. You are going to hear a lot of debate about that and what it was intended to do today. The point is, it does exist. It is part of the law. Under that procedure, it would mean that the tax bill we bring to the Senate would be subject to these special procedures: There would be 20 hours of debate equally divided. The majority could yield back its 10 hours. So we could end up with 10 hours of debate. We have a strict germaneness rule on amendments. When the debate is over, we have an up-or-down vote. In naming conferees, we have a time limit on debate. We have an up- or-down vote. That is the procedure that exists in the budget process. What we had sought to do in trying to work out an accommodation--and I am sorry it did not work, as I know Senator Byrd is. I want people to understand there was a good-faith effort to work this out. We proposed that rather than having 20 hours, we have 50 hours equally divided. We proposed on first-degree amendments there would be no more than 2 hours, unless the managers yielded more time, that is, if there was real debate, and on second-degree amendments, only 1 hour; that all first- and second-degree amendments be germane; that at the end of the process, we have an up-or-down vote; that on naming conferees, we have a time limit on debate and then have an up-or-down vote; and the same procedure would apply to the conference report. Some concern was raised that even with this agreement, we could come back and use reconciliation again. It was clear from our intent at the time that if we agreed to a unanimous consent agreement, there would be no need to use reconciliation. In any case, with the best of intentions, we got together. Differences existed at the end of the process, and no agreement was reached. So we are here basically in a debate and with a vote coming that no one wanted, but here it is. Mr. President, how much time do I have?

Mr. GRAMM. Mr. President, we have 1 minute in opposition to the Breaux amendment. Exactly the same argument is true with regard to the Breaux amendment. Nothing in the Breaux amendment in any way requires that the money go for the purpose he specifies. All his amendment does is basically reduce the tax cut by $70 billion and add it to spending. What Senator Collins has done is given us an opportunity as a Senate to go on record in favor of something we all claim we are for; that is, to provide $70 billion for the purpose of making a health insurance tax credit for small business, so they can cover their employees, and to give deductibility for health insurance. I yield to the Senator from Oklahoma.

Mr. GRAMM. I reserve the time.

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM. Mr. President, the Corzine amendment spends another $46 billion, adding to total spending in a budget which is now already grossly bloated. Our Democrat colleagues in the last 2 days have in the process of adding spending, added $697 billion of new spending in their amendments. That is more than the entire Government spent in the first 150 years of our great Republic. If anybody has any doubt as to what the two parties are about, all they have to do is look at this spending orgy. I urge my colleagues to vote no on the Corzine amendment.

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 257

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank Senator Domenici for yielding. Let me first say to my colleagues that I have concerns with both of these amendments. We should wait until the new farm bill is written before budgeting money to spend on agricultural programs over the next 10 years. Our colleague from North Dakota talks about how much the Europeans spend subsidizing production and exports and then holds that out as a standard for something we should be doing. His argument basically is to imitate the worst, most inefficient farm program in the history of the world--a program that would make a commissar from the old Soviet Union have an uneasy stomach. I am going to vote for the Grassley-Miller amendment for a very simple reason; that is, it provides funds in the budget for this year and sets out an expectation of funding over the next ten years, while allowing us to write a farm bill and determine what is really needed in order for rural America to prosper. Of the two approaches, the Grassley-Miller amendment is by far the more rational option. The alternative that is presented by Senators Johnson and Conrad would simply create a $97 billion entitlement, put on automatic pilot, massive government spending, when we haven't even written a new farm bill. No logic whatsoever exists to support such an amendment. The only purpose of the amendment is to take $97 billion away from the tax cut. So what this amendment really does is reduce the tax cut, which means either we aren't going to repeal the death tax, or we are not going to repeal the marriage penalty, or we are not going to double the child credit exemption, or we are not going to reduce rates. Instead, this amendment takes $97 billion away from the tax cut and creates an entitlement before we have even written a farm bill. So this may be disguised as an agricultural amendment, but this is really an amendment to reduce the tax cut. I hope my colleagues will vote for the Grassley-Miller amendment. It sets out funding for this year, to address real problems in agriculture, it provides a projected level of funding for the next 10 years, and it allows us to write a new farm bill. How are we going to write a rational farm bill if we have already committed to an entitlement of almost $100 billion? Does that make any sense whatsoever? The answer is no. The Johnson-Conrad amendment should be rejected. I urge my colleagues, especially those who are inclined to vote against both amendments to support the Grassley-Miller amendment--life is about choices, and we have a very big evil here in the Johnson- Conrad amendment. I suggest we go with the Grassley-Miller alternative in order to provide funding that we know we are going to need this year to address current problems in agriculture--it would be better to do it through the normal process under an emergency designation, but that is not the choice. Then we can write a farm bill, and, having a farm bill before us, we can make a rational decision about how much money we need for the future. It may be less than $97 billion; it may be more than $97 billion. But the idea of committing money in the year 2001 in an entitlement, when we have not even written a farm bill, really insults our intelligence. I urge my colleagues to vote for the Grassley-Miller amendment and to vote against the Johnson-Conrad amendment. I think this is an important issue. If we adopt the Johnson-Conrad amendment, we are going to set a precedent that indicates we are not necessarily interested in farm policy, we are just interested in a bid to reduce the tax cut in order to fund a program which has yet to be devised. So I want everybody to remember, if you vote for the Johnson amendment, you are taking money out of repealing the marriage penalty, or doubling the dependent exemption for children, or repealing the death tax, or reducing rates. It has to come from somewhere. I urge my colleagues to support the Grassley-Miller amendment. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. How much have I used?

Mr. GRAMM. I would like 20 more minutes, if I may have it.

Mr. GRAMM. Every time we hear the President's tax cut discussed, we hear the term ``huge'' or ``massive.'' Why not? It is $1.6 trillion. I have a few constituents who know what $1 million is. I have two constituents who know what a billion dollars is--Mr. Perot and Mr. Dell. Mr. Dell used to know what a billion dollars is. I suspect he will again, knowing Mr. Dell. Nobody knows what a trillion dollars is, so obviously it is huge. What I would like to do is, using some figures from the National Taxpayers Union that are very relevant to the debate, let's convert it into English. Out of every dollar we are going to send to Washington in the next 10 years, how much would the Bush tax cut give you back, how many pennies for every dollar we are going to send to Washington in the next 10 years? The answer, 6.2 cents. So this tax cut, basically, will give back 6.2 cents out of every dollar that taxpayers are going to send to Washington in the next 10 years. Six point two cents out of every dollar sounds like a fairly modest tax cut, and it is. Compare it to the Kennedy tax cut--the proposal that John Kennedy, as President, sent to Congress--a tax cut, by the way, that cut rates across the board. We now hear from our colleagues that when we cut the bottom rate twice as much as the top rate, then it is skewed to the rich. But John Kennedy, when he submitted his tax plan, had an across- the-board rate cut. In fact, when the question was raised, he said, ``A rising tide lifts all boats.'' When you look at his tax cut and ask how many pennies out of every dollar in revenue were collected in the 10 years after it was adopted, you find that it gave back 12.6 cents out of every dollar. It was over twice as big as the Bush tax cut. The Reagan tax cut, in 1981, gave back 18.7 cents out of every dollar collected. It was three times as big as the Bush tax cut. So the first point I want to make is, when you look at the tax cut in terms of how much taxes people are paying, the Bush tax cut is actually a quite modest and responsible tax cut. It is half as big as what President Kennedy proposed in 1961, and it is one- third the size that Reagan proposed in 1981. And it is 2001 and it is time for another tax cut. Many of my colleagues are saying it is not big enough. My response to that is, let's do it, and if the economy gets stronger, we can cut taxes again next year. This doesn't have to be the last tax cut of the first Bush term. But this, by historic standards, is a modest tax cut. That is the first point I want to be sure everybody understands. The second point is, this is a tax cut that America not only needs, but that we can afford. Let me remind everybody--it is a point Senator Domenici made, but it is a point worth making--last year, in the last 6 months, we increased spending by $561 billion over 10 years. This surplus has literally been burning a hole in our pockets. Even the Chairman of the Federal Reserve Bank, Alan Greenspan, who is very loathe to criticize Congress, in testimony before the Banking Committee, raised the issue about what has happened to spending in the last 2 years and expressed alarm and concern about it. If you listen to our Democrat colleagues, you would get the idea that President Bush is just slashing spending, and they have all these charts about how he is not doing enough and they are going to do more and more--trillions, billions of dollars more. The plain truth is, the Bush budget takes every penny we have spent in the last 6 months in the biggest spending spree in American history and uses that as the beginning point and raises spending by 4 percent. How, based on that, can anybody argue that the President is cutting spending? In fact, he adds $1 trillion of new spending in the next 10 years over the current level. Now, he adds a 4-percent increase that adds $1 trillion to Government spending over the next 10 years. But even after you spend that $1 trillion, we are looking at a $5.6 trillion surplus over the next 10 years, according to the Congressional Budget Office. If we take out the amount of money that is committed to Social Security and Medicare, we have $3.1 trillion left in what we call on-budget surplus, and then President Bush has proposed that roughly half of that money, that surplus, go to his tax cut. This is a modest tax cut by historic standards--half the size of the Kennedy proposal, a third of the size of the Reagan proposal, and it is also a tax cut that we can afford. Now, we cannot afford it if you are going to let the Democrats spend this money. That is true. You can't spend it and give it back. You can spend $1 trillion on top of what we have already spent in the last 2 years and you can afford this tax cut. But if you are not going to say no to any special interest group in America, if you are going to take this opportunity to spend even more money, you can't do both. We choose to give it back; they choose to spend it. Now, let me talk a minute about debt reduction. Under our current situation, we are literally able to pay down the debt quicker than the bonds become due. And everybody has said, since one-third of the Federal debt of this country is held by foreign governments, foreign central banks, that we don't want to pay a premium in order to buy this debt back. But this is the plain truth. Let me show you the following chart. We currently owe $3.4 trillion in debt that is held by the public. If we didn't do the tax cut, we would have enough surplus to pay this off by 2009. Doing the tax cut, we would have enough to pay it off in 2011. But the plain truth is that we can't physically buy the debt back as quick as we are capable of doing it under either scenario. What we can do, as this chart shows, is we can dramatically reduce the size of the public debt, but we are going to reach a point out here in 2009 where we would have to pay these foreign bondholders these big premiums in order to reduce the debt. And it doesn't make any sense to do that. We are going to get the interest on the debt down very low. So our colleagues talk about interest costs to the tax cut. The plain truth is that we are going to get interest costs down to as low as it can be gotten down, so there are hardly any interest costs to the tax cut once we get past 2005 and 2006. Here is the point. We are paying down debt as quickly as we can pay it down. If we control spending, if we are prudent about what we do, we can increase Government spending by 4 percent, which is more than the average family budget is going up this year, and we can have the Bush tax cut, and we can pay down debt as much as we will be capable of doing, given the bonds that are available. So let me conclude by simply making the following points. This is a choice in the end between letting people spend this tax surplus or having the Government spend it. I am sure there are many Americans, not a majority, but many Americans who are not paying taxes and would rather the Government spend it because they might get some of it. I think most Americans who work for a living and who pay taxes would believe they can spend $1,600, which is the average tax cut in my State, better than the Government could spend it if the Government got to keep it. That ultimately is what this debate comes down to. We have put together a very responsible budget. In fact, I have been involved, one way or another, in every budget debate since 1979. I have seen a lot of budget proposals that were rosy scenarios or had magic asterisks and had all kinds of gimmicks. I have never seen a budget that is more realistic and more achievable than the Bush budget. The Bush budget has no gimmicks in it. The reason it has no gimmicks in it is because it has a modest tax cut, it has an achievable proposal in debt reduction, and it has a modest increase in Government spending. But if you believe Government spending should keep growing the way it did in the last 6 months, and you believe we cannot afford a tax cut, then you are right. The question is, Should Government spending grow that fast? Should we literally spend this surplus instead of giving part of it back? I do not think we should. I urge my colleagues to vote for this budget. I want to pay down the Government debt, and I am in favor of setting out a program to pay it down as quickly as it is physically possible as the bonds become due. Any bond that comes due ought to be paid off, and we should not borrow more money. There is another kind of debt, private debt. Twenty million families are carrying debt on credit cards. There are a lot of families who would like to engage in debt reduction. This tax cut will let families reduce their debt as our Government reduces its debt. Finally, in terms of the tax cut itself--and we are going to have plenty of time to debate it, but ultimately it is going to be part of this debate--we do three simple things in the tax cut: One, we cut everybody's rate. Everybody who pays income taxes will get a tax cut. We will hear some say there are some people who do not get a tax cut. Yes, but they do not pay income taxes. This is an income tax cut. You do not get an income tax cut if you do not pay taxes. Said another way, we will give you a 100-percent cut if you do not pay taxes. Of course, you do not get anything because you do not pay taxes. We have a surplus of taxes so we are giving taxes back to the people who pay it. We cut the top rate half as much as the bottom rate. The second part is repealing the marriage penalty and doubling the child tax credit. We think families should keep more of what they earn to invest in the one institution we know works. Government does not always work, but the family will work if it has the resources to work. The third part is repealing the death tax, believing that when people build up a family business or family farm and they pay taxes on every dollar they earn, we ought not to force their children to sell off their business or sell off their farm to give another tax to the Government. Ultimately, we are going to hear in this debate that Bill Gates will be able to buy a Lexus. Bill Gates already has a Lexus. Can anybody who believes that a man who pays 1,000 times as much income tax as I do does not deserve a bigger tax cut than I get? The fact he could buy a Lexus is irrelevant. He already has a Lexus. We are going to hear other people say: Yes, but low-income people who don't pay much in taxes will only get enough to buy a tailpipe system and muffler. Have you bought a tailpipe system and muffler lately? Obviously, you have not, but if you had, you know it costs a lot of money, and if you need a tailpipe system and a muffler, having the money to pay for it makes a big difference. This is going to be an important debate. Often we talk about things that do not matter. We spend endless hours talking about issues that somebody thinks is important and that often do not end up being important. This issue is important. What America will look like 10 years from now and 100 years from now will be determined, in part, significantly by the outcome of this debate. If we adopt the President's budget, if we enforce it, and if we cut taxes, I believe America will be richer, freer, and happier 10 years from now and 100 years from now than it would be if we do not. I believe Government will be bigger if we do not. I think Government will be spending more money if we do not. I think the tax burden will be heavier if we do not. If you think you can make America greater by making Government bigger, then you would want to vote against this budget, but if you believe, as I do, that letting working families invest more money in their children, in their community, and in their family makes for a better America, then making it so people who work hard for a living get to keep more of what they earn and not end up working a third of the year just to pay for Government, if you believe that makes for a better America, you have to believe this debate is important. Whatever happens, one thing is clear: We are not going to waste this week. This week we are going to make very important decisions that will affect the well-being of everybody who will call themselves Americans for a very long time. That is why this debate is so critically important. I yield the floor.

Mr. GRAMM. Mr. President, I thank the distinguished chairman of the Budget Committee. I thank him for his work not only on this budget but on budgets for America going all the way back to 1981. If there is any person here who has had a permanent impact on this process, it is Senator Domenici. I congratulate him. Let me say to Senator Conrad, I congratulate him on being the new ranking member. He does an excellent job in making his case. The fact that the case will not hold water is not a reflection on him. He does as good a job with a bad hand as you can possibly do. But the problem is, facts are stubborn things. Facts are very stubborn things. And our Democrat colleagues now have become conservatives. They are concerned about this big tax cut. They are concerned about debt. They are concerned about deficits. They are concerned about protecting Social Security. But fortunately we do have some memory. I would like to say, and I am sure the same must strike Senator Domenici as well, it takes a sense of humor in this business. It amazes me how people who killed our Social Security lockbox in 1999--we tried one, two, three, four, five times to set up a procedure to prevent Congress from spending the Social Security surplus: On April 22; on April 30; on June 15; on June 16; and on July 16. In each case, we were successful in that we got a majority vote, but we could not get 60 votes we needed to pass the bill. And we did not get 60 votes because the Democrats opposed the Social Security lockbox in 1999. Today they are worried about tax cuts. They are worried about debt reduction. They are concerned that this massive tax cut is going to take away Social Security money. But 2 years ago, on five different occasions, they used the necessity of our getting 60 votes to pass Senator Domenici's proposal to not let Congress spend Social Security and, on virtually a straight party-line vote, that effort was killed. It never ceases to amaze me that people who voted against the balanced budget amendment to the Constitution, who voted against a prohibition that would have stopped the spending of the Social Security surplus, who voted against Gramm-Rudman, which, with all of its problems and failings, was the only effort we have made to try to control spending, now are very concerned about debt. But they are not concerned when you are spending money. This concern they have about deficits and debt is very narrowly defined. They are concerned about deficits and debt only when you want to give money back to the taxpayer. They are not concerned when you are spending. As all of my colleagues know, in January, the Congressional Budget Office--this is the nonpartisan budgeting arm of the Congress--came out with their estimate as to how much we had added to Government spending over 10 years during the last 6 months of the Clinton administration. How much money did we commit to spend out of the surplus over the next 10 years in the last 6 months of the Clinton administration? Many people were stunned to find that in those 6 months, we added $561 billion to Government spending. No 6-month period in American history ever added that much money to Government spending. I ask my colleagues: Where was all this concern about debt and deficits when we were spending $561 billion in the last 6 months of last year? Where was this concern? It didn't exist. It was silence. All the people who are now telling us that they are worried about this giant tax cut are the same people who stood by while in 6 months $561 billion was spent on new Government programs. At that rate, in 12 more months, they will have spent the entire Bush tax cut. I don't understand. Where was this concern about deficits and debt when they were voting down the balanced budget amendment to the Constitution? Where was it when they weren't willing to protect Social Security from having its funds plundered and spent? Where was it when they were spending $561 billion? What produced this change of heart? What produced the change of heart is, they weren't concerned when they were spending money. They are only concerned when we give it back to the taxpayer. That is what this debate is about. Our colleagues want to make the point this week that they have this idea to divide the surplus into a third, a third, and a third. There is only one problem. They have already spent their third. Since we achieved a surplus, since the economy started running a budget surplus, we have added some $800 billion to new spending on programs. So having already spent their third over the last 2\1/2\ years, now they want to spend another third, which is why they can't afford to let the American people have more of their money back in tax relief. Let me make the points I want to make. First, what is a budget about? I am sure people think this is dull business, but actually of all the votes we cast every year, it is the most important because it is the one time we define our vision for the future of America. Each year our two great political parties on the floor of the Senate and in the House try to define through their budget what kind of vision they have for the future of America. I believe if you listen very carefully, you ultimately reach the conclusion that there are two competing visions and that the two visions really come down to the following: Do we want more Government, or do we want more opportunity? Do we want to tighten the belt on the family, or do we want to tighten the belt on the Government? Given that we have this surplus because people have paid more in taxes than we need to fund the Government, should we use this money to let the Government grow? Or should we give some of this money back to the people who have earned it? That is what this debate is about. Don't be confused. Despite all the talk about debt and deficits, this debate is not about debt and it is not about deficits. It is about spending versus tax cuts. We want to give a substantial amount of money but a responsible amount of money, as I will show, back to the people who paid the taxes to begin with, and the Democrats want to spend it. That is a perfectly legitimate view. You can make a case for it. You will hear it over the next 50 hours. But it really boils down to a simple question--and Americans will ask it, hopefully, and answer it--that is: Do you believe the Government can take this surplus of tax revenues and spend it better than you could spend it if you got to keep it? Under the President's tax cut, the average family in my State making $51,000 a year, two-wage earners with two children, will get about $1,600 in tax relief. At some point in the debate, I am sure our colleagues will say: Look, that is not a whole lot of money. In my State, $1,600 is a lot of money. It is the difference between owning your own home and living in somebody else's house. It is the difference between your children going to college or going to work. It is the difference between having a retirement program and not having one. The real question is, if Government kept the money and spent it, could they spend it better than you could spend the $1,600 if you got to keep it? That is the question about which I am willing to let the American people make a decision. In fact, I would be willing to submit that to the public. There will be all kinds of efforts to confuse the issue and talk about debt and deficits instead of about spending, but anybody who is listening is going to understand. Let me begin talking about the President's tax cut. Every time that anybody mentions the President's tax cut, they talk about how big it is, huge.

Mr. GRAMM. I am happy to yield.