Phil Gramm

Mr. GRAMM

Mr. GRAMM. Let me first thank our dear colleague, Senator Byrd. I think he is giving us a lesson on the history of funding for highways that is long overdue and is not generally understood. I want to thank him for giving me an opportunity to sort of butt in the middle of his speech and really focus on something that I think is important and that really is part of what the Senator is saying, but I think sort of sets it in perspective. I think maybe by explaining the big picture first and then having the Senator explain the portion of it related to Appalachia, I think people will have a clearer view of where we are. Let me begin with Appalachia, then go to the debate about funding. I then want to talk about an amendment that continues to be referred to in these ``Dear Colleague'' letters that are being mailed. Senator Byrd, I was shocked. The letter today shows that our amendment is producing 43 States who are losers, and you can imagine my consternation when I discovered that my own State was one of the biggest losers. So perhaps we are not doing as good a job as we thought if we could believe these numbers, but let me assure you, do not believe these numbers. Now, let me first talk about the highway bill and how it works. How the highway bill works, as it was reported out of committee to the Senate, 90 cents out of every $1 that is provided in the highway bill goes to the States in a formula. The amendment that Senator Byrd and I have written does not change that formula whatever. We took the committee's judgment--we are not trying to become the highway subcommittee through our amendment--we took their formula and allocated the money by exactly the same formula, only we allocated $31 billion more in budget authority, $21 billion more in outlay than they allocated. I will explain where that came from in just a moment. Under their bill, 10 percent goes to the overhead of the Department of Transportation and it funds the Appalachian Regional Highway System, it funds the emerging international trade corridors, it funds all of the research projects that are part of the highway system, and it funds the functioning of the Federal highway department and the administrative expenses. The amendment that I have offered with Senator Byrd does not change the allocation of funds as far as 10 percent going to the Department and 90 percent going to the States. So when we add an additional $31 billion in budget authority and $21 billion in outlays, not wanting our amendment to substitute for the wisdom of the committee, we took exactly the same allocation, 90-10, for this new money that they had for the old money. Now, if you listen to the critics of our amendment, they have zeroed in on Senator Byrd and on the Appalachian region, and it's as if this is a whole new area of funding. Well, this is where I think the confusion comes from, and I think I can straighten it out pretty easily. First of all, President Clinton, when he submitted the highway bill, proposed $2.3 billion for these 13 States to be funded by the Secretary out of the 10 percent of the money set aside for the Secretary's use. He proposed $2.3 billion, even though his bill authorized over $31 billion less than our amendment will provide. So remember this number. The President proposed $2.3 billion for the 13 States of Appalachia to complete their system, which is over 75 percent already complete, while providing $31 billion less money than we are providing. Only our amendment provides only $2.2 billion. So if it is the purpose of the Senator from West Virginia to somehow exploit his colleagues, I would have to say that he is doing a very poor job of it, because the reality is that our amendment provides an additional $2.2 billion for Appalachia, which is less money than the President requested. He requested $2.3 billion when he was spending $31 billion overall less than we are spending. The reality is that our amendment contains less money for Appalachia than the President requested. Second, the House, when they wrote a 3-year bill in committee, provided $1.05 billion for Appalachia; but that's only for 3 years. In fact, if you run it out to 6 years, they would have provided approximately $2.5 billion for these 13 States and for this funding of highways within those 13 States, which was in the President's budget and which has been in every highway bill that we have funded in the recent past. So the reality is that, while people don't want to debate the real issue here, which is spending the highway trust fund, we have added less money to Appalachia, using the formula of the committee, than the President requested when he was spending $31 billion less. We have requested less money for these 13 States than the House provided in its bill. So I hope this puts that issue to bed. When the President requested more, when the House provided more, when this has been an ongoing line item in the highway bill for many years, and when it was a line item in the original bill, and when we took the committee's overall allocation of funds, the point I am making is that the allocation of funds here is basically in line with what the President requested and what the House has done. The Senator has explained to us that the highway project in these 13 States is 75 percent complete. Surely, no one believes they should be left uncompleted. But the Senator is roughly asking for the same amount of money that was provided by the President, that was provided by the House, even though the President was providing $31 billion less overall. Now, having, I hope, put that to bed, to anybody who wants to debate the issue I would have to say--and I want to be sure that I am always kind to our colleagues--that it is frustrating to me to try to debate an issue when we are having so much trouble getting people to focus in on that issue. I want to give you an example. There was a ``Dear Colleague'' letter sent today with this headline: ``Final Analysis Complete; 43 States Lose Under Byrd-Gramm.'' As I said, unfortunately, my State is one of the biggest losers in the country, losing $28 million. Now, what are we losing relative to? Well, what we are losing relative to is the so- called Domenici-Chafee amendment, which I have here, and what they are saying is that if you provided $21 billion more in outlays, and if you don't fund the overhead of the Department of Transportation, then you would have additional funds to provide to States. But guess what? They don't provide an additional penny. They put out all these tables about what Domenici-Chafee would provide. But when you take their amendment and turn to the section entitled ``additional funding,'' and you turn to page 2, they have the amounts. The amounts referred to in paragraph 1 are as follows: ``(a) for fiscal year 1999, zero; for fiscal year 2000, zero; for fiscal year 2001, zero; for fiscal year 2002, zero; for fiscal year 2003, zero.'' So their amendment provides no additional budget authority for highways whatsoever. In fact, their amendment is convoluted. They go on and say: ``In general, there shall be available from the highway trust fund such sums as are provided in paragraph 2.'' But paragraph 2, as I just read you, says zero for 1999, zero for 2000, zero for 2001, zero for 2002, and zero for 2003. So they will provide such sums as in paragraph 2, but there aren't any sums in paragraph 2. If you read the fine print in their letter--you see, there is fine print here that says--and, of course, Senator Byrd would have picked it up because he picks up fine print. I am not sure how many of our colleagues did. Here is what it says, in short: ``If the Appropriations Committee funds highway programs at $29 billion or greater. . .''--it also should say: ``and if we authorize such moneys to be spent in the future.'' But it does not say that. Then if you should allocate it the way they would, not as Senator Chafee allocated it in his own committee, with the 90-10 split, you would have a different allocation. But the point I want people to understand is that all these charts are being sent out about how money would be spent. When you read their amendment, they are not spending any money. They are not providing one additional penny for highway construction; yet, they keep putting out tables showing what would be provided if someone at a later time and a later place decided to provide it. What Senator Chafee and Senator Domenici are really saying is: Don't authorize highway spending in the highway bill. Don't let the trust fund, which is collected as a tax on gasoline, be authorized to be spent on highways. Wait and let a budget be written in the future, and then if at that time it is decided to spend the money for the purpose that the tax was collected, then we will spend the money. Senator Byrd and I disagree. We wrote a highway bill 6 years ago. Have we ever changed the authorization in 6 years under that highway bill? The answer is no. We have had to live with it every single day. We are now trying to write a highway bill for the next 6 years, and Senator Chafee and Senator Domenici say don't write a highway bill for the next 6 years. Leave funding at the level that was set out in the bill that would let the highway trust fund rise to $90 billion by the end of the highway bill, and then in the future, if we decide that we ought to quit misleading the American people in telling them that these taxes that are paid at the pump go to build highways, then in the future in some budget resolution we could provide that the money would be spent. But so that no one misunderstands, not one penny of additional highway funds are provided in the so-called Chafee-Domenici amendment. There is only one amendment that takes the highway trust fund that people pay into when they go and fill up their car and fill up their truck and they shell out their hard-earned money on gasoline taxes, and we say to them, well, now, look, it's for your own good. We are spending it on highways, so this is not a tax. It is a user fee. Senator Chafee and Senator Domenici say, well, look, we don't want to do that. We want to build it up in the trust fund so that it can be spent on other things. In fact, as Senator Chafee said in a speech in the Senate Chamber on October 9, he ``cannot support the proposition of spending the 4.3-cent gasoline tax.'' That is a perfectly legitimate position. He cannot support it. But Senator Byrd and I can support it, and we do support it. What our amendment does is it starts telling the American people the truth. And that truth is they are paying this gasoline tax. We claim it is going into the trust fund to build roads, and yet we have before us a highway bill that doesn't spend a penny of that 4.3-cent-a-gallon tax on gasoline so that it can go to other uses. Senator Byrd and I say we collect the money on gasoline, on the tax at the pump, and we put it into the trust fund. We have been telling people that was for roads, and our amendment simply does what we say we are going to do. That is, we are going to spend it on roads. So if you believe that the highway trust fund ought to be spent on other things, you should vote against our amendment. You ought to support people who are opposing it. But if you believe that the highway trust fund, which is funded with a gasoline tax, ought to be used to build roads, which is what we claim we are doing, if you think it is fundamentally wrong, some might say dishonest, to build up a surplus of $90 billion in a highway account so the money can be spent for other things, then there is only one amendment that is going to fix it. That amendment is the amendment that I am offering with Senator Byrd. So in regard to our amendment, there have been a handful of criticisms, and I want to respond to one of them and try to do it briefly so I can get out of the way and let Senator Byrd go back to giving us a history lesson on highway construction and about the fairness of the underlying permanent law related to highway construction. Let me outline what these criticisms are. First of all, I want to remind my colleagues that 83 Members of the Senate voted on a resolution I offered as part of the budget resolution that called on us to put the 4.3-cent-a-gallon tax on gasoline, which had been going to general revenues, in the highway trust fund and spend it for highways. Mr. President, 83 Members of the Senate voted for that resolution. Then, in the tax bill that was passed this year, we took the 4.3-cent- a-gallon tax on gasoline and put it where every other permanent tax on gasoline since we have had a trust fund has gone. We put it into the highway trust fund to spend it on highways. Then when the highway bill came out of committee, while we had put 4.3 cents per gallon into the trust fund, about $7.2 billion a year when you count mass transit and highways, not one penny of it had been spent on highways. Not one penny of it. Under the original bill, the surplus would have built up to $90 billion, which means in our unified budget all that money would have been spent on something else. Now, Senator Byrd and I have tried to have a debate on the substance of the issue, and the substance of the issue is we believe that the trust fund made up of taxes on gasoline ought to go for the purpose that we tell the American people it is going for, and that is to build roads. We have offered an amendment to do that. Our amendment is as straightforward as it can be. It allocates the money on the same formula the committee allocates the money going to the States. It has the same amount of money being allocated by the Secretary. And it is straightforward in terms of what it funds. Now, the two criticisms that have been leveled are, No. 1, that somehow this is unfair because of funding for highways under a program which has existed since--when was the Appalachian highway program adopted?

Mr. GRAMM

Mr. GRAMM. Mr. President, Senator Byrd from West Virginia had, through a unanimous consent request, reserved time for himself and for two other authors of a major amendment to the transportation bill to speak. In the interim, Senator Breaux, I think, was scheduled to speak for 7 minutes. Senator Breaux is not here. So, rather than hold up the Senate, what I would like to do is to go ahead and speak out of order, and I ask unanimous consent to be able to do that.

Mr. GRAMM

Mr. GRAMM. Mr. President, President Clinton has talked a lot about building a bridge to the 21st century and, our philosophical differences aside, I want to help him build that bridge--with Bucky Balls. ``Bucky Ball'' is the nickname for Buckminsterfullerene, a molecular form of carbon that was discovered by Prof's. Robert F. Curl and Richard E. Smalley of Rice University in Houston. They won the 1996 Nobel Prize in chemistry for this discovery. Bucky Balls were named after R. Buckminster Fuller, the architect famous for his geodesic domes, because this new molecule closely resembles his designs. The silly nickname notwithstanding, their discovery was a breakthrough that will have scientific and practical applications across a wide variety of fields, from electrical conduction to the delivery of medicine into the human body. Bucky Balls are impervious to radiation and chemical destruction, and can be joined to form tubes 10,000 times smaller than a human hair, yet 100 times stronger than steel. Use of the molecules is expected to establish a whole new class of materials for the construction of many products, from airplane wings and automobile bodies to clothing and packaging material. This may be more than you want to know about molecular physics, but think about it this way: Because we encourage the kind of thinking that leads to discoveries like Bucky Balls, the United States stands as the economic, military, and intellectual leader of the world. We achieved this not by accident, but by a common, unswerving conviction that America's future was something to plan for, invest in, and celebrate. Using the products of imagination and hard work, from Winchester rifles and steam engines to space shuttles, Americans built a nation. We're still building, but for what we need in the next century, we're going to have to turn to people like Curl and Smalley to give us materials like Bucky Balls, and the Government has a role to play. Unfortunately, over the past 30 years, the American Government has set different priorities. In 1965, 5.7 percent of the Federal budget was spent on nondefense research and development. Thirty-two years later in 1997, that figure has dropped by two-thirds. We spend a lot more money than we did in 1965, but we spend it on social programs, not science. We invest in the next elections, not the next generation. The United States is underinvesting in basic research. That's right. The author of the landmark deficit reduction legislation known today as Gramm-Rudman supports the idea of the Government spending more money on something. Not only do I support the idea of spending more on science and technology, I am today introducing a piece of legislation to achieve that goal. I am pleased to be joined by Senators Lieberman, Domenici, and Bingaman as I introduce S. 1305, the National Research Investment Act of 1998. This bill, an update of my earlier bill, S. 124, would double the amount spent by the Federal Government on basic scientific, medical, and precompetitive engineering research over 10 years from $34 billion in 1999 to $68 billion in 2008. If we, as a country, do no restore the high priority once afforded science and technology in the Federal budget and increase Federal investment in research, it will be impossible to maintain the U.S. position as the technological leader of the world. Since 1970, Japan and Germany have spent a larger share of their national income on research and development than we have. We can no longer afford to fall behind. Expanding the Nation's commitment to research in basic science and medicine is a critically important investment in the future of our Nation. It means saying no to many programs with strong political support, but by expanding research we are saying yes to jobs and prosperity in the future. I believe that if we want the 21st century to be a place worth building a bridge to, and if we want to maintain the U.S. position as the leader of the free world, then we need to restore the prominence that research and technology once had in the Federal budget. Our parent's generation fought two World Wars, overcame some of the worst economic conditions in the history of our Nation, and yet still managed to invest in America's future. We have an obligation to do at least an equal amount for our children and grandchildren. Over the past 30 years, we have not lived up to this obligation, but it isn't too late to change our minds. The discovery of Bucky Balls is a testament to the resilience of the American scientific community. I believe that if we once again give scientists and researchers the support that they deserve, if we make the same commitment to our children's future that our parents made to ours, then the 21st century promises to be one of unlimited potential. America is a great and powerful country for two reasons. First, we have had more freedom and opportunity than any other people who have ever lived and with that freedom and opportunity people like us have been able to achieve extraordinary things. Second, we have invested more in science than any people in history. Science has given us the tools and freedom has allowed us to put them to work. If we preserve freedom and invest in science, there is no limit on the future of the American people. I urge my colleagues to cosponsor this important legislation.

Mr. GRAMM

Mr. GRAMM. Mr. President, President Clinton has talked a lot about building a bridge to the 21st century and, our philosophical differences aside, I want to help him build that bridge--with Bucky Balls. ``Bucky Ball'' is the nickname for Buckminsterfullerene, a molecular form of carbon that was discovered by Prof's. Robert F. Curl and Richard E. Smalley of Rice University in Houston. They won the 1996 Nobel Prize in chemistry for this discovery. Bucky Balls were named after R. Buckminster Fuller, the architect famous for his geodesic domes, because this new molecule closely resembles his designs. The silly nickname notwithstanding, their discovery was a breakthrough that will have scientific and practical applications across a wide variety of fields, from electrical conduction to the delivery of medicine into the human body. Bucky Balls are impervious to radiation and chemical destruction, and can be joined to form tubes 10,000 times smaller than a human hair, yet 100 times stronger than steel. Use of the molecules is expected to establish a whole new class of materials for the construction of many products, from airplane wings and automobile bodies to clothing and packaging material. This may be more than you want to know about molecular physics, but think about it this way: Because we encourage the kind of thinking that leads to discoveries like Bucky Balls, the United States stands as the economic, military, and intellectual leader of the world. We achieved this not by accident, but by a common, unswerving conviction that America's future was something to plan for, invest in, and celebrate. Using the products of imagination and hard work, from Winchester rifles and steam engines to space shuttles, Americans built a nation. We're still building, but for what we need in the next century, we're going to have to turn to people like Curl and Smalley to give us materials like Bucky Balls, and the Government has a role to play. Unfortunately, over the past 30 years, the American Government has set different priorities. In 1965, 5.7 percent of the Federal budget was spent on nondefense research and development. Thirty-two years later in 1997, that figure has dropped by two-thirds. We spend a lot more money than we did in 1965, but we spend it on social programs, not science. We invest in the next elections, not the next generation. The United States is underinvesting in basic research. That's right. The author of the landmark deficit reduction legislation known today as Gramm-Rudman supports the idea of the Government spending more money on something. Not only do I support the idea of spending more on science and technology, I am today introducing a piece of legislation to achieve that goal. I am pleased to be joined by Senators Lieberman, Domenici, and Bingaman as I introduce S. 1305, the National Research Investment Act of 1998. This bill, an update of my earlier bill, S. 124, would double the amount spent by the Federal Government on basic scientific, medical, and precompetitive engineering research over 10 years from $34 billion in 1999 to $68 billion in 2008. If we, as a country, do no restore the high priority once afforded science and technology in the Federal budget and increase Federal investment in research, it will be impossible to maintain the U.S. position as the technological leader of the world. Since 1970, Japan and Germany have spent a larger share of their national income on research and development than we have. We can no longer afford to fall behind. Expanding the Nation's commitment to research in basic science and medicine is a critically important investment in the future of our Nation. It means saying no to many programs with strong political support, but by expanding research we are saying yes to jobs and prosperity in the future. I believe that if we want the 21st century to be a place worth building a bridge to, and if we want to maintain the U.S. position as the leader of the free world, then we need to restore the prominence that research and technology once had in the Federal budget. Our parent's generation fought two World Wars, overcame some of the worst economic conditions in the history of our Nation, and yet still managed to invest in America's future. We have an obligation to do at least an equal amount for our children and grandchildren. Over the past 30 years, we have not lived up to this obligation, but it isn't too late to change our minds. The discovery of Bucky Balls is a testament to the resilience of the American scientific community. I believe that if we once again give scientists and researchers the support that they deserve, if we make the same commitment to our children's future that our parents made to ours, then the 21st century promises to be one of unlimited potential. America is a great and powerful country for two reasons. First, we have had more freedom and opportunity than any other people who have ever lived and with that freedom and opportunity people like us have been able to achieve extraordinary things. Second, we have invested more in science than any people in history. Science has given us the tools and freedom has allowed us to put them to work. If we preserve freedom and invest in science, there is no limit on the future of the American people. I urge my colleagues to cosponsor this important legislation.

Mr. GRAMM

Mr. GRAMM. Mr. President, when the distinguished Senator from West Virginia reaches the floor and is recognized, he will introduce an amendment that he and I are introducing with Senator Warner and Senator Baucus. It is a very important amendment. It is the culmination of a long debate about highway funding and about using trust funds for the purpose that the trust funds are cumulated. My colleagues have heard a great deal about this debate to this point. They are going to hear a lot more about it in the next few days. But I wanted to outline how we got to the point of offering this amendment. I think it is a very important vote. I think it is important that it be an informed vote. So let me go back to 1993. What I want to do is outline how we got to the point that we find ourselves today. I then want to talk about the amendment, and I will leave the great preponderance of the details up to Senator Byrd. In 1993, as part of the initial budget adopted with the new Clinton administration, the Congress adopted a 4.3-cent-a-gallon tax on gasoline. For the first time in the history of the country since we had the Highway Trust Fund, this permanent gasoline tax did not go to build roads or to build mass transit. Unlike any other permanent gasoline tax that we had adopted since the establishment of the trust fund, it went to general revenues. When we had the debate, obviously much objection was raised to the fact that we were taxing gasoline and not funding roads. On the budget resolution this year, I offered an amendment that called on the Senate to do two things: One, to take the 4.3-cent-a-gallon tax on gasoline-- which is an annual revenue, by the way, of about $7.2 billion--to take that money out of general revenue and put it into the Highway Trust Fund, where historically permanent gasoline taxes have always gone. The second part of this amendment was to require that the money be spent for the purpose for which it had been collected as part of the Highway Trust Fund, and that is that the money be spent to build roads. That amendment was adopted with 83 votes in the Senate. Every Republican except two voted for the amendment; 31 Democrats voted for the amendment. It was a strong bipartisan declaration of the principle that when you collect money from gasoline taxes that that money ought to be used to build roads as part of the user fee concept which has always been the foundation on which we have had gasoline taxes. When we passed the tax bill this year, I offered an amendment in the Finance Committee to take the 4.3-cent-a-gallon tax on gasoline away from general revenue and to put it into the Highway Trust Fund. That amendment was adopted in the Finance Committee and that amendment was part of the tax bill both times it was voted on in the Senate. Those who opposed the amendment contemplated offering an amendment to strip away that provision and, after looking at the level of support in the Senate, decided not to offer it. As a result, in the new tax bill the transfer of the 4.3-cent-a-gallon tax on gasoline became the law of the land and it now is going into the Highway Trust Fund where historically our gasoline taxes have gone. Now, in this last month, the transportation bill, the highway bill, was reported out of committee, but that highway bill did not provide that any of the funds from the 4.3-cent-a-gallon tax on gasoline be spent for roads. What would occur if in fact the bill as written by committee were adopted is that we now have--if you will look at this chart--we have $23.7 billion of surplus in the Highway Trust Fund. What that really means is that over the years we have collected $23.7 billion to build roads, but rather than building roads with those funds we have allowed that money to be spent for other purposes. And as a result, Americans have paid taxes on gasoline but that money has not been used for the purpose that they paid the taxes. Now, as a result of the adoption of the amendment that I offered on the Finance Committee bill, the 4.3-cent-a-gallon tax on gasoline is now going into the trust fund and, if we don't amend the transportation bill before us, by the year 2003 we could have a surplus in the Highway Trust Fund of $90 billion. What does that surplus mean? It is simply an accounting entry to say that we have collected $90 billion that we told the American people would go to build roads, we have collected it by taxing gasoline, and yet every penny of that $90 billion will have been spent but not on roads. It will have been spent on many other things--some worthy, some not so worthy--but it will not have been spent for the purpose that the money was collected in the first place. And that purpose is to build roads. The amendment that Senator Byrd and I are offering will basically do this. It will take the 4.3-cent-a-gallon tax on gasoline and it will allow it to accumulate for a year. And then, after the accumulation has occurred for 1 year, it will commit that revenue for the purpose that it was collected: To build roads. What it will mean is that over the period of our bill it will authorize about $31 billion of additional funds to build roads, and the actual expenditure will be about $21 billion. If we don't pass this amendment, what will happen is this $90 billion will be collected, it will not be spent for roads, and every penny of it will be spent for something else. Senator Byrd the other day likened this procedure to the story of Ananias in the Bible, where, in the book of Acts, Ananias has sold his worldly goods to give the money to the new, fledgling church, only Ananias holds back part of the money. And God not only struck Ananias dead but struck his wife Saphira dead. In a very real sense, what we have been doing on the Highway Trust Fund is we have been engaged in an action which is basically deception. We have been telling people that they are paying taxes to build roads when they pay at the gasoline pump, and we have not been building roads. We have, in fact, been spending that money for other purposes. The amendment that Senator Byrd will offer for himself and for me, for Senator Warner, and Senator Baucus, will simply take the 4.3 cents of revenues and assure that they are, in turn, spent for the purpose that the tax is now collected, and that is building roads. I would note that even under our amendment, the unexpended balance of the trust fund will grow from $23.7 billion today, to at least $39 billion by the year 2003. The issue here is, should money that is collected for the purpose of building roads be authorized for expenditure for that purpose? Or should we continue to allow it to be spent for other purposes? Let me address the issue of the budget. Nothing in our amendment busts the budget. Nothing in our amendment increases expenditures by one thin dime. Nothing in our amendment will allow the budget deficit to grow. All our amendment does is require that the funds that are collected on the gasoline tax to build roads be authorized to be expended on building roads. Obviously we cannot require, in the transportation bill, that the Appropriations Committee appropriate the money each and every year to fund the authorization. But I would remind my colleagues that 6 years ago we wrote a highway bill and we set out in that highway bill the authorization levels that would allow appropriations, and that highway bill, through 6 long years, was never changed. Some of our colleagues will argue, ``Well, let's not authorize the building of roads with taxes collected to build roads now, let's wait a couple of years and write another budget and make a decision.'' Our decision today is about whether or not we are going to be honest with the American people and whether or not we are going to spend money collected to build roads for the purpose that they are collected. That basically is the issue. This is not an issue about total spending. Nothing in our amendment changes total spending. It is an issue about truth in taxing, and that is, when we tax people on a user fee to build roads, do we build roads with the money or do we allow it to be spent for other purposes? In our amendment, we say that we are not raising the total level of spending, but we make it clear we are serious about funding highways. We say that if savings occur in the future relative to the budget agreement and if Congress decides to spend any of those savings in the future, that those savings must be used to fully fund highways and meet the obligation that the revenues collected in this gasoline tax be used for the purpose of building roads. So there will be many issues debated, but they really boil down to a very, very simple issue: When we are imposing a tax on gasoline, a tax that people are paying when they are filling up their car and truck, and we tell them that that money is being spent for roads so that they are beneficiaries of the tax they are paying, are we going to fulfill the commitment we make to them when we tell them that or are we going to allow, incredibly, $90 billion to be collected over the next 6 years where people are told the money is going to build roads but, in reality, the money goes to fund something else? There are many ways you can debate this issue, but it all comes down simply to priorities. What the Byrd-Gramm amendment will do is fulfill the commitment we have made by authorizing that funds collected in the gasoline tax be available to build highways. That is the issue. We do not change the formula in allocating the funds. We meet the same requirement the committee met, and that is, we guarantee that for the first time, every State, at a minimum, will get back 90 percent of their share of the gas taxes they send to Washington, DC. As a person who is from a donor State, which means we are currently getting 77 cents for every dollar we send to Washington, that is a dramatic improvement. The amendment that Senator Byrd will be offering on behalf of some 40 or 50 cosponsors is an amendment basically that will allow us to fulfill the commitment that we have made to the American people. So I am very proud to be an original cosponsor with Senator Byrd of this amendment. I think it is a very important amendment. I hope our colleagues will look at it. I hope they will decide that it is time to tell the American people the truth. It is time to stop collecting gasoline taxes and then using those gasoline taxes for purposes other than building roads. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me first say that I am very proud to join with Senator Byrd and our two other colleagues in this amendment. Our purpose today is not to introduce the amendment as a formal pending amendment before the Senate but to basically put the facts out on the table so that we can have a full and informed debate, and so that over the recess people will have an opportunity to know what this amendment does, why it is important to every State in the Union, and why it is important to the future of the country. I want to try to make two points as briefly as I can make them. The first point is that in 1993, for the first time in the history of America, the Congress adopted a permanent gasoline tax that did not go to the highway trust fund. Instead, that permanent gasoline tax went to general revenues and was spent for general purposes. We had a strong base of support in the Senate and in the House to take the action which was consummated in the Taxpayer Relief Act. The amendment that I offered in the Finance Committee was adopted as part of that bill. We were able to put the 4.3-cents-a-gallon tax on gasoline into the highway trust fund where it belonged. That became the law of the land. But our problem was that when the bill that will be before us when we debate ISTEA was reported from the committee, it did not include any of the money that was transferred into the trust fund when we took the 4.3-cents-a-gallon tax from gasoline and put it where it belonged, in the highway trust fund, to fund highways and to fund mass transit. That produced a situation which is portrayed in this chart. I hope every Member of the Senate will become familiar with this chart because it really shows the sleight of hand that has been underway now for quite a while and will certainly be perpetuated and expanded in the future if our amendment is not adopted. We currently collect the money from gasoline taxes and transportation fuels taxes that are dedicated in the trust fund to highways and mass transit. But, yet, as of today, we have $23.7 billion in that account that have not been expended for the purpose that they were collected. Over the years they have, in fact, for all practical purposes, been spent for other purposes. As a result of our decision to put the 4.3-cents-a-gallon tax on gasoline where it belongs, in the highway trust fund, under the ISTEA bill as reported from the committee, this surplus in the highway trust fund would grow from $23.7 billion today to a whopping $90 billion in the trust funds collected for the purpose of building highways and mass transit but never expended for that purpose. In the year 2003 we would have $90 billion in the trust fund, and we would have told the American people that they were paying gasoline taxes to fund highways and transportation, and, yet, that $90 billion would have been spent for other purposes. What the Byrd-Gramm amendment does--I am very proud that we have the two most knowledgeable people in the Senate on highway matters who have now joined us as cosponsors--but what our bill does is assure that the area you see in blue here, this 4.3-cents-a-gallon tax on gasoline, is spent for the purposes that it was collected. This is a truth-in-government provision. This is a provision where you tell people you are going to do something in government and you do it. Let me also make note of the fact that, even if our amendment is adopted, the balance in the highway trust fund will grow from the current $23.7 billion to a whopping $39 billion surplus by the year 2003. So under our amendment the unspent balance in the trust fund will grow every year even if we spend the 4.3-cents-a-gallon tax on gasoline where we told the American people that we would spend it. Let me also make note that our amendment is very conservative and very responsible because we don't spend the money in the year that it is collected. We spend it the year after it is collected. So even though we will be collecting the 4.3-cents-a-gallon tax on gasoline and putting it into the trust fund for the first time in 1998, we don't spend any of that money in 1998. We only spend what was collected in 1998 in fiscal year 1999. And the same process continues throughout the period of this highway bill through the year 2003. We are talking about highways today because we have the highway portion of the bill before us. But, as everyone knows, the mass transit title of this bill was reported from the Banking Committee, and they have delayed reporting their precise spending figures for technical reasons. When that portion of the bill is before the Senate, we intend our amendment to apply to it as well because mass transit receives 20 percent of the 4.3-cents-a-gallon tax on gasoline, and we want to be sure that this portion of the highway taxes can also be spent. Under this provision, every State in the Union will get additional funds. The increase per State will be about 25 percent. I think it is important to note and for every Member of the Senate to understand that under this amendment the ratio of funds going to States, the proportion going to any one State, is totally unchanged. But the result of truth in government, the result of spending money for the purpose that it was collected, is pretty remarkable. The result is, if we are going to spend $27.8 billion, if this full program is carried out through the year 2003, on highways, the purpose for which the tax was collected to begin with, that will make a very substantial difference to every State in the Union. Arkansas, we know from the very effective arguments that have been made by our colleagues from Arkansas, has felt slighted by this bill. Under the existing bill, they would get $1.47 billion over the five years covered by our amendment. But with the adoption of our amendment, that would grow to $1.84 billion. A similar proportional increase in each State would occur as a result of this amendment. I want to make it clear that we are going to hear arguments throughout this debate that we are, through this amendment, taking money away from other programs. I want to address this head on. I want to address it in two ways. First of all, those who are making that argument are in essence claiming that they have the right to spend this $90 billion on other programs, that they have that right. It reminds me of an argument that might be made by a rustler. There is this rustler who has been rustling cattle off the Byrd and the Gramm ranch. We call the sheriff, and the sheriff comes out. The sheriff hunts him down, and he brings him to us. We decided, well, we know this guy. We are not going to put him in jail. But the sheriff says to him, ``You have to quit rustling these cattle.'' So the rustler says, ``But I am used to eating all this beef. You know. It is easy for you to say, but where am I going to get my beef?'' Well, I think the answer of Rancher Byrd, Rancher Gramm, Rancher Baucus, and Rancher Warner under this circumstance would be, ``That ain't my problem.'' The point is they never had the right to spend the $90 billion for anything other than highways to begin with. And we are going to have an extensive debate about that. Let me address in a little bit of detail the provisions that Senator Byrd talked about where we are dedicating, at least in terms of a commitment about the future, funds to fulfill our commitment to build these highways. We have, I believe, very artful language. Senator Byrd and Senator Byrd's staff are responsible for the language. I think it is language that every Member of the Senate can be supportive of. We are not trying to judge what kind of budgets we are going to write in the future. We are not trying to make a judgment about what the economy is going to be like in the future, or what kind of expenditure savings we are going to have in the future. We are not making any judgment as to how those savings might be used. But what we are saying--I think if every Member of the Senate will look at this language, they will be in agreement--we are saying, if there are spending savings that occur in the future and if the Budget Committee decides that any of those spending savings are going to be used to spend money through the Federal Government--two ifs--that, if there are savings in other spending programs, and if any of those savings are spent, they have to be used in total or part to fund our commitment to the highway trust fund before any of those savings can be used for any other purpose. There is only one reason that anybody would be against that language. The only reason that anybody would be against that language would be if they intend to spend this money for some other purpose. Our point is we are collecting this gasoline tax. It has been put into the trust funds by the decision of the House and the Senate. We made a commitment that it was going to go to build highways and for mass transit. What our amendment does is guarantee that if any funds are spent, they are going to be spent for this purpose and spent for this purpose first. So I think this is a good amendment. I hope that we are going to get a strong vote. We have a point of order. Senator Byrd made the point, but I want to reiterate this. This point of order is not that we are busting the budget or raising the deficit. Both of those things are not the case. The point of order is really based on a technicality in the budget because we are allowing funds, if they are spent, to be spent on transportation needs and highways beginning in fiscal year 1999. So, in the technical language of the budget, we are changing the 302(a) allocation of budget authority to the Environment and Public Works Committee. We are not raising the total level of outlays. We are not busting the budget. This is a simple technicality. There ought not to be a point of order against it. But there is. So, as a result, we are going to have to get 60 votes. So, if you want truth in government, if you want to have a program whereby when people are going to the gas pump and they are looking at that big tax they are paying, and they are saying, ``Well, you know, at least it is being spent on highways,'' we want that to be true. If you believe that the highway trust fund ought to be used to build the highways and to build mass transit, then we believe that you are going to vote for this amendment. We are very hopeful that we are going to be successful. I yield the floor. Mr. BAUCUS addressed the Chair.

Mr. GRAMM. Mr. President, let me say it is awfully tempting to get into a debate here, and I will try to avoid that as well. We will have an opportunity to do that the week after the recess when our amendment will be before us, the bill will be before us. In the words of Ronald Reagan, let me ask Senator Domenici to take a little walk with me down memory lane. When his budget was on the floor, I offered an amendment to take a position in the Senate that said that the 4.3-cents-a-gallon tax on gasoline should be put in the trust fund and should be spent for highways and for mass transit. By a vote of 83- 16 Members of the U.S. Senate said yes. When the tax bill was before the Finance Committee I offered an amendment to put the 4.3-cents-a- gallon tax on gasoline into the trust fund. By a vote of 15-5 the Finance Committee said yes, and that amendment was never challenged on the floor of the U.S. Senate. So, whatever the Senator from New Mexico would like the world to be, 83 Members of the Senate said put the gasoline tax in the trust fund and spend it for the purpose that gasoline taxes have always been spent every time there has been a permanent gasoline tax in history before this gasoline tax, spend it for that purpose on highways and mass transit. Now, in terms of this debate about the budget, what Senator Domenici is saying is, ``Don't amend the highway bill; let me amend the budget. Don't do it today, decide it next year.'' We have the highway bill before us. The last highway bill that we wrote lasted without a change in the amount of money being spent for 6 long years. The reason we debate a highway bill is to write a highway bill. The point here is as simple as it can be. Do you believe that the gasoline tax which is in the highway trust fund should be spent for highways? If you do, then you are going to end up supporting the amendment that Senator Byrd and I are offering. If you don't believe that, you are going to end up opposing it. Finally, in terms of the whole debate about the budget, this amendment does not bust the budget. What this amendment does do is it raises the contract authority for highways so that we have an opportunity to compete for funds in appropriations to build highways. Our amendment is very clear on this point. I don't want to go much further because it is not fair to Senator Domenici, given that we don't have the amendment before us, but it simply says two things, and I think it is clear there are Members of the Senate who do not support these two things--but I do. It says, No. 1, that if you have savings by lower spending --it doesn't say anything about higher revenues from economic growing, any of that stuff. It just says if we spend less than we have in the budget and if you decide to spend that money somewhere else--two ifs; it doesn't say you will have the savings and it doesn't say you will spend it anywhere else--but it says if you do have the savings and you decide to spend it, you have to fund the highway trust fund first. You have to fund it first. Now, other people say, well, what is so important about it relative to all these other things we spend money on? What is important about it is we already have a surplus of $23.7 billion where we told the American people their money was going to build highways and we spent it on something else, as we are doing this very day. That surplus is going to grow to $90 billion. Senator Byrd believes, I believe, Senator Warner, and Senator Baucus believe that it is fundamentally dishonest for us to tell people the trust fund is for building roads and to be building up a surplus of $90 billion where that money is being spent on other things. So we are not making a decision here. We are not trying to write Senator Domenici's budget next year. We are trying to write the highway bill now. Senator Domenici says, ``Well, let's debate next year's budget.'' We are not debating next year's budget. There is no guarantee that all of us will be on the same side of that debate. What we are doing is debating highways. We are saying, we have said by overwhelming votes, including on Senator Domenici's budget this year, that we want gasoline taxes to go to the trust fund. We want those taxes to be spent on highways. All we are saying is that we want to have a highway bill that reflects the position that we have taken not once but twice. Once in the budget this year, once in the tax cut this year. This is not a new idea. This is something that we have approved over and over and over again. We think the time has come to make it clear in the highway bill--not in some future budget we may write, but in the highway bill--that when we tell people their gasoline tax is going to highways, we want it to go into highways. In terms of our language on the budget, we are just simply saying if you have outlay savings and if you spend them--two big ifs; if you have outlay savings and you spend them--you have to fund the highway trust fund first. I think the overwhelming majority of the American people are for it. I know there are other spending interests that would rather have the money. That is not the debate today. The debate today is about highways, and we are for them and we want to build them. I yield the floor.

Mr. GRAMM. Mr. President, Senator Santorum, who presided over our presentations, asked to be added as a cosponsor. Mr. Faircloth would also like to be listed. We are not offering the amendment today, but in terms of putting people on notice, putting the tables out, I wanted to be sure that they were listed as well.

Mr. GRAMM

Mr. GRAMM. Mr. President, as I understand it, we have scheduled a tabling motion of the Mack amendment, and Senator Mack himself has moved to table the amendment. I thought it would be timely for me to come over and say a little bit about this amendment. Let me make it clear that I intend to vote against tabling the amendment. I think this amendment should be debated, and I think it is important to try to outline why. That is the purpose that has brought me to the floor today. First of all, we are talking about, in the Mack-Graham-Kennedy amendment, an amendment that changes the immigration laws of the country. I remind my colleagues that we are considering the D.C. appropriations bill and, therefore, this amendment has nothing to do with the subject matter of that bill. Second, I believe that this is complicated legislation, dealing with very complex, very important, and, quite frankly, very emotional issues that ought to be dealt with by the Immigration Subcommittee, by the people who wrote the law that we just adopted last year, and by people who are experts in this area. I do not believe that an amendment that has the sweeping impact of this amendment should be dealt with as a rider to an appropriations bill when, by and large, other than three or four Members of the Senate, nobody has closely examined the pending amendment. Now, let me outline very briefly what the amendment, in my opinion, seeks to do, and let me also say that I am not a member of the committee that has jurisdiction. My concern about this amendment was generated by the chairman of the Immigration Subcommittee in the House, who is my colleague from Texas, who is very concerned about this amendment, and who is very much opposed to it. Basically, what this amendment seeks to do is to change the immigration bill that we wrote just last year. Now, our colleague from Florida argues that, well, it doesn't appear that maybe we wanted to do what we did. It is hard for me to judge that and, quite frankly, I don't know. But let me outline what the amendment will do and the concerns that I have. First of all, one of the provisions in the immigration bill last year was a provision to try to end the practice of people coming into the country illegally and then using the system to stay here. I am very sensitive to this issue. We had an effort that was undertaken last year to cut back on legal immigration. I was a leader in killing that effort because I want people to have an opportunity to come to America legally. I am not one of these people who believes that America is full. I believe that we have a system for people to come here under existing law--to come to the country legally, to come to work, to build their dream, and to build the American dream. I am a strong supporter of legal immigration, but I am a strong opponent of the illegal immigration of people who come to the country illegally and, in doing so, jump in line in front of 7 million people who are waiting to come legally. One of the things we did last year in the immigration bill was set a cap on the number of people who were in the country illegally but who were able to stay here by claiming extraordinary hardship if they were returned home. The cap was 4,000 people a year that we would allow to remain in the country under these extraordinary circumstances. What the Mack amendment does is waive that cap for a huge number of people, certainly in the range of 300,000, and critics--I can't speak for whether they are right or wrong--who are concerned about it suggest perhaps a larger number. I think what this does is produce sort of a rolling amnesty. I remind my colleagues that in trying to gain control of our ability to have some say about who comes to our country, without limiting legal immigration, we took the extraordinary step of granting amnesty to people who had violated the law. But part of the deal was that it was a one-time agreement and that we weren't going to continue to do it. My concern here is that we are creating a rolling amnesty. A second very real problem is that we are talking about people who came to this country, many of them from El Salvador, Guatemala, and Nicaragua, when there was a war going on. The war in El Salvador was a war where Communist insurgents were trying to overthrow the government and deny democracy and capitalism to the people in El Salvador. The war in Nicaragua was a war against a Communist dictatorship. What happened during this period is that people came to this country illegally. Now we are hearing the argument that there was a wink and a nod and there was an agreement. But I don't see anywhere in law that that was the case. Now, I can't today make a judgment about whether people who came here from Nicaragua fleeing communism should be granted the ability to stay. I would have to say that I am more sympathetic to them than I am to people who came here from El Salvador, because they were supporting a Communist insurgency, and now the El Salvadoran Government is saying, ``Please keep those people in America, don't let them come back to El Salvador.'' My point is this. I think we need to look at each one of these cases. But the war in each country from which these people were fleeing is over. We were successful in stopping Communist insurgency in El Salvador. We won in Nicaragua. Now people who were fleeing a conflict, now that the conflict is over, are saying, ``We don't want to go back.'' Well, now, in some circumstances, they should not have to go back. But I don't think the Senate is ready today, without the benefit of hearings, without the benefit of consideration by the subcommittee and full committee, without an extensive debate, to make that determination. I don't know what we should do in each of these circumstances. If we could narrow the scope, if we could put the focus on those who came from Nicaragua, if we could find some middle ground, I might be willing to do that. But I don't see any effort to find a middle ground. So this is one of these circumstances where we are trying to change a law that is just now going into effect--the first real test we have had in the new immigration bill--where we set a cap on the number of people who come to the country illegally and we subsequently allow to stay here. The first time we come up with a test based on, obviously, very real human drama--in many cases, strong cases by individual families-- we are getting ready to set aside the bill that we so recently adopted and grant a rolling amnesty. Apparently, nobody else seems to care, but I care. That is why we have the rules of the Senate as we do, so that one person who cares can be heard, so that there can be a debate. So I intend to vote against tabling. I hope the vote will be 100 to 0. But it won't change anything. We can vote not to table this amendment 100 times and it won't change anything, because I don't intend to step aside on this issue. Now, we have rules of the Senate. There can be cloture. We can file cloture and we are going to wait the several days that the Senate rules require it to mature. We can have extensive and thorough debate. This amendment is amendable. It is amendable with a motion to recommit with instructions. It will be amendable when the second-degree amendment is disposed of. It will be amendable when we vote to name conferees. It will be amendable when we vote to take up the House bill and insert the Senate language. It will be amendable in many different ways. And, until we find a solution, I intend to see that it is amended. I yield the floor.

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, let's begin by talking about testing. I have here a pie chart that talks about people who attend D.C. public schools. These are the cold realities of the situation: 52.9 percent of them drop out of D.C. public schools before they graduate. So, obviously, they don't have a chance of going to college. Of the less than half who graduate, 22.1 percent of all people who are in the system never take the SAT test that would allow them an opportunity, if they are successful, to attend a major college or university. Of those who take the test, half make below 796 on the test. That is below the minimum standard set by most major colleges or universities in this region of the country. So to begin with, roughly only one out of eight students has any chance in the world of attending a major college or university. That is the quality of the system that we see defended today by people who are willing to let children go to schools that don't teach, that don't deliver, that don't produce quality in order to defend teachers unions and vested interests. Let me show you the next chart. The next chart basically points out where we are in the District of Columbia as compared to what is required to actually be successful and go on to a college or university. The average student in the District of Columbia makes 790 on the SAT test. The average for the country as a whole is about 1050. To go to the University of Maryland, you have to average about 1170. To go to Penn State, you have to average about 1190. To go to the University of North Carolina, you have to score about 1230, and to go to the University of Virginia, you have to make about 1300. Talk about discriminating against children. You force working families in the District of Columbia to send their children and their money to schools that turn out children that make 790 on the SAT test, and you are discriminating against them before they ever have any opportunity to use their God-given talents to advance themselves and their families. Let me make note of the fact that the NCAA says that if you don't make 840 on the SAT test, you are not a real student and you are being exploited by playing football or basketball at a major college or university. The average SAT score in the District of Columbia is 789. That is clearly a case of failure. Is it a failure to commit money? The average school system in America spends $5,765 per student. The District of Columbia spends $10,180 per student, roughly twice the national average, and yet look at the final product. But not for children of D.C. teachers. They want a mandatory program for everybody except themselves. Nationwide, 12.1 percent of public schoolteachers on average send their kids to private schools. But in the District of Columbia, it is 28.2 percent. So despite more money than any other school system in America--twice the national average, more than twice the number of teachers in the District of Columbia send their children to private schools as the national average. Yet the test scores continue to reflect failure, and this is not new. The failure of the D.C. schools to deliver in terms of hard achievement are well documented, and they have been in existence for a long time. Why not spend $7 million to give people a chance to compete? For God's sakes, this is something we ought to do. We ought to be ashamed of denying these children an opportunity to compete. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wish to thank the distinguished chairman of the Committee on Banking, Housing, and Urban Affairs, Senator D'Amato, as well as Senator Mack, the chairman of the Housing Opportunity Subcommittee and the ranking members for including in the manager's amendment the text of several proposals that I drafted and which I believe will strengthen the legislation. The first of these is an amendment which will ban violent sexual predators from eligibility for, and thus admission to, public housing facilities. The second initiative allows public housing authorities access to State records concerning sex offender convictions. Both of these provisions were approved by the House in its version of the legislation. In a letter endorsing the effort to rid our public housing of these violent predators, the National Center for Missing and Exploited Children said that ``* * * each and every American, regardless of socio-economic class, has the right to a safe and secure neighborhood.'' Mr. President, I do not believe that there is a constitutional right to have access to public housing. If there is a right involved here, it is the right of people to know that the person living next door to them and their children is not a convicted sex offender. Adoption of these amendments will insure a safer environment for the adults and children who reside in public housing. I urge adoption of the amendments.

Mr. GRAMM

Mr. GRAMM. I announce that the Senator from Arizona [Mr. McCain], is necessarily absent.

Mr. GRAMM. I announce that the Senator from Arizona [Mr. McCain] is necessarily absent.

Mr. GRAMM

Mr. GRAMM. Mr. President, today we are for arts. Last week we were for education. Before that we were for housing. In fact, we are in about a 60-year cycle where the way you show you are for something is to have the Federal Government take the money of working Americans and spend that money for them on the thing you want to show that you are for. For 60 years, the choice that has been presented on the floor of the Senate is a choice about whether or not you are for something based on spending the Federal taxpayer's money on it. The choice is not, ``Are you for art?'' in the sense that you want to let working families keep their money to invest it in art, the choice is not whether you are for education but letting families decide how to spend their money on education. For 60 years, the only real choice we have had is whether or not we are for things based on spending the taxpayer's money. It is like the compassion debate we have in Washington. Compassion is not what you do with your money, it's what you do with the taxpayers' money. Rather than getting into all of the different elements of the debate today, I want to talk about this central point. This is the 12th appropriations bill that we have dealt with this year, and when it is passed today, we will have spent $268,195,000,000 on just domestic appropriations. Nobody knows how much money that is. I have a constituent, Ross Perot, who knows what a billion dollars is, but nobody knows what $268 billion is. But it comes down to $2,126 for every working American. When we pass this bill, we will have, in the last few weeks, spent $2,126 of the income on average of every working person in this country, and what we have decided and, in fact, what we are debating about the arts today is whether or not we are going to spend their money on this purpose. I know we hear our President say the age of big Government is over, but the plain truth is that next year, we are going to spend more money in Government as a percentage of the income of working Americans than we have ever spent in the history of the United States of America. We are going to have the largest Government that we have ever had in the history of America next year as a result of the money that we are spending here, as a result of the money that we have committed to programs we call entitlement programs and as a result of money that is being spent by State and local government. In other words, the tax burden on the average working American next year will be higher than it has ever been in the history of the country in terms of how much of their money the Government will be taking. How does this debate about the arts fit into that big picture? It seems to me that we are having the wrong debate. The debate here shouldn't be whether or not you are for the arts based on how much money the Government is going to take from working people and spend on arts. Why don't we have a debate about who should do the spending? I was examining the figures on spending for the National Endowment for the Arts, for the National Endowment for the Humanities, and the Corporation for Public Broadcasting, programs where we are taking money out of the paychecks of working American families and we are bringing the money to Washington and deciding on their behalf that we want to spend it on NEA, NEH, and the Corporation for Public Broadcasting. We have heard a lot of debate about whether we are spending it wisely, whether what is being defined as art with the expenditure of our taxpayer money through NEA is, in many cases, art. I think the vast majority of Americans would say in many cases it is not. But the point is, if we took those three agencies and eliminated them, we could give an art and entertainment tax credit of about $200 to every working family in America. It is in that context that I want to talk about the National Endowment for the Arts, because what we are deciding today is not that we are for the arts by voting to continue funding NEA. What we are deciding is that by funding NEA, NEH, and the Corporation for Public Broadcasting that we are doing more for the average working family in terms of the arts and the humanities and access to information through broadcasting than they could do if they were able to keep $200 more and spend it as they chose. Granted, I am sure there are some here who would get up and say, ``Wait a minute, with this $200, we are funding the symphony, and if we let working families keep the $200, they might go see Garth Brooks, they might decide to spend it going to three or four Texas A&M football games.'' I guess I would argue that families ought to have a right to choose what is art and what is entertainment to them rather than delegating that responsibility involuntarily through the IRS to 100 Members of the Senate. In a very real sense, this is the choice that working families are making. How many families would choose to get an Internet hookup rather than to fund public broadcasting if they had the choice to make? How many families would choose to get the cable rather than to fund public broadcasting? So my point is, this is not a debate about whether you are for the arts or not. This is a debate about whether Government should be the final decisionmaker about what is art and what should be funded. Our colleague from Minnesota said, ``Well, this is only $100 million.'' Well, $100 million is a lot of money. I personally would like to begin the process of making fewer decisions in Washington so that we could have more decisions made back home. I think part of our problem in the arts, part of our problem in Government, is that too many spending decisions are made around these committee room and Cabinet tables and too few decisions are made by families sitting around their kitchen tables. The question that we face as Republicans is, if we are not for less Government and more freedom, what are we for? What do we stand for? If we really want to reduce the size of Government and to let people keep more of what they earn to invest in their own family and their own future, to invest in their own art, to invest in their own entertainment, to invest in their own education and housing and nutrition, if that is what we really want, where do we begin? We are not eliminating a single program in the Federal Government this year that I am aware of. Not a single program in the Federal Government will be terminated as a result of this budget which will spend a record amount where we are increasing discretionary spending and, in the process, deciding that the Government ought to direct more goods and services and where they go. I don't, quite frankly, know a better place to start than the National Endowment for the Arts. It is not that I am against the National Endowment for the Arts or the National Endowment for the Humanities or against public broadcasting. But the question is, why not eliminate these programs and let working families keep $200 more per family and decide what they want to invest that in, what brings the most to their family. It seems to me that that is the choice. As I understand it and they proliferated a little, we have three amendments that are before us in some form. One of the amendments would block grant the money to the States and eliminate the National Endowment for the Arts by giving the money directly to the States. Another amendment would give 75 percent of the money to the States, have 20 percent of the money go to national art organizations and give the National Endowment for the Arts 5 percent so we can maintain their infrastructure. The third proposal is to eliminate the National Endowment for the Arts. Since I see all three of these as an improvement over the status quo, I am going to vote for all three of them. But the position that I want to take today and make clear is that you are not saying whether or not you are for the arts based on how you vote on spending the taxpayers' money. I am for the arts, but I think families ought to have the right to decide what is art and what is not art. I think families ought to have the right to make these decisions. I don't think we should be making those decisions for them. Finally, if we are really serious about less Government and more freedom, if you really believe that Government is too big and too powerful and too expensive, if you really believe that having the average family give Government almost a third of its income is too much, if you believe all of those things, as I do, I don't see how you can then justify having the Government take $100 million from working families to spend on what we define as art. So I think this is a fundamental choice. I would have to say that for 60 years, I think we have been making it the wrong way. For 60 years, we have been losing in the appropriations process, because the choice is always spending money and being for something, rather than not spending money. What I would like to do is to have the ability to put all these appropriations bills out here and go through them one by one and basically decide, would you like to do less of this and let families keep more of this money themselves? I think when we start changing the way we make these decisions, when we start looking at them from a bigger perspective, I think ultimately freedom will start winning in this debate instead of losing. The vote on NEA today is not a vote about arts to me, it is a vote about freedom. It is a question of whether or not we want the Government, with the highest tax burden in American history set to be imposed on working families next year, to spend another $100 million trying to tell people what is and what is not art, and I think given our record on the subject and given the issue itself, that we would be better off letting families keep this money. If they call Garth Brooks art, I call it art. If they would prefer spending their money on an Internet connection instead of public broadcasting, or if they would prefer going to Texas A&M football instead of going to the symphony, maybe there is wisdom in each and every household. And what is wisdom in each and every household can hardly be folly, even in the greatest nation in the world. I yield the floor. Mr. JEFFORDS addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, every once in a while a vote comes along that is a defining vote. I am sure that to a lot of people the Gorton amendment looks like a fairly simple, straightforward concept. And that concept is that we are spending a lot of money on education at the Federal level. Yet, if one looks at the 30-year history of that expenditure, Federal spending and Federal control have expanded and we have crowded out parental involvement, and the quality of American education by almost any measure has declined. This has created a dilemma on the part of many Members of Congress. Congress and bureaucrats dictating local education priorities and programs is failing. Yet those who are concerned about education have loathed the idea of reducing the amount of resources committed by the Federal Government for a purpose that they support. So we have been in an endless debate where everybody admits that what we are doing is failing. And, yet, we continue year after year adding more money for the very programs that we have all concluded are failing because we want to show that we support education. For example, one of the provisions of the bill before us that I strongly oppose is bilingual education. This program has become a vehicle to keep people dependent on a language other than the language of opportunity and commerce in America. It begins to produce a society where people who do not learn English are isolated. Yet, in this bill we have a 36-percent increase in funding for bilingual education. That is the dilemma. How can we see the money is spent efficiently, if, in fact, we want to improve the quality of education? The Gorton amendment solves the problem by eliminating the dilemma. The Gorton amendment will spend every penny on education that this bill calls for. For poor students, it maintains the same allocation for title I. We have already dealt with the education of disabled persons. That is outside the purview of this debate. We have recently reformed that program. It is not included. Impact aid is given on the basis of the number of Federal employees who are working in facilities that do not pay local taxes. That is a property tax supplement. Impact Aid is not included. But nearly all other K-12 educational funding at the Federal level is included in the Gorton amendment. So what the Gorton amendment essentially says is this: Take the amount of money that is currently being spent by Washington bureaucrats and congressional politicians and give it to the school systems. But take away all of the mandates as to how it is to be spent, and let local teachers, local parents, and locally elected school board members decide how this money is spent. I think conservatively it has been estimated that over $1 billion of additional spending will get through the massive web of bureaucracy, through that maze of grants and applications and bureaucratic oversight, and get to the students. I think that number is a gross underestimation. So this is one of those votes that really defines where we stand. Those who vote against this amendment are voting to continue a system that for 30 years has failed the children of this country, that has increasingly dictated education policy in Washington, DC, where bureaucrats and Congressmen set priorities in education and where parents are basically excluded from having a real voice in how their Federal tax money is spent and often how their State and local tax money is spent. Those who oppose the Gorton amendment are saying let's protect the status quo. Let's continue a program where Washington knows best. Those who support the Gorton amendment are saying, look, we want to commit the money, but rather than letting Washington bureaucrats and Washington politicians decide how it is being spent, let's let local teachers, local parents, local administrators, and locally elected school board members take this money and use it in a way that maximizes the rate of return in terms of quality education that we get. I think for years to come, people will be able to look at this vote and determine where people stand on this fundamental issue. Do you believe Washington knows best on education? Well, obviously many do. But if they do, they believe it is in spite of 30 years where the record has shown a clear failure as Washington has dictated more and more of the spending on primary and secondary education in America. It seems to me it is very difficult based on empirical evidence to suggest that the current program really works. What the Gorton amendment says is let local people set priorities in education. The American people overwhelmingly in poll after poll believe that. I am confident that local parents in my hometown of College Station, TX, local teachers, locally elected school board members love their children at least as much as we do. I remember once engaging in a debate with someone from the Department of Education in the early 1980's, and I made what I thought was the convincing point. I said I may be ignorant, I may not know curriculum, I may not have a Ph.D. in education, but I do love my children more than you do, to which this very sweet lady said, ``No, you don't.'' And I said, ``Then what are their names?'' She loved them but not enough to know their names. So I am confident that people in my hometown care more about the quality of education their children receive than we do. I am convinced that if we give them the same money we are giving them now but we let them decide how to spend it, they will do a better job. It is not going to do us much good to have the Department of Education or some surrogate create a test to give students, then discover that our schools are failing to teach our children. We already know that. Nothing is more documented in the country than the fact that public education is failing, especially in the big cities. The question is what are we going to do about it? The Gorton amendment says let us in a very simple way fundamentally begin to change the equation. It is only the first step. If we give the money directly to the school system, then you have to ask, what do we need all these bureaucrats for? Perhaps next year we can go back and take the money we are spending on all the people who administer these programs and give that money to the school system and thereby greatly multiply our efforts. So I am proud of this amendment. I think this is a defining amendment. I think how you stand on this amendment basically says whether you believe that Washington knows best or whether you believe that local parents, local teachers, locally elected school board members know best and care most. I do not have any doubt about the answer to that question. That is why I am for the Gorton amendment. I hope it will pass. I yield the floor. Mr. D'AMATO addressed the Chair.

Mr. GRAMM. Mr. President, I ask unanimous consent to add my name as a cosponsor of the Gorton amendment.

Mr. GRAMM

Mr. GRAMM. Let me begin where Senator McCain left off. It is a great paradox in a dramatic change in public programs subsidies. So, therefore, we are moving toward ending the practice of paying people not to produce things we do not want. What an incredible paradox it is. At the very moment that we are getting out of the business of paying people not to produce agricultural products, the Federal Government is on the verge of paying medical schools not to train doctors. Let me explain how the program came about and how it works and then try to end up as quickly as I can by explaining to people why, as chairman of the Medicare subcommittee, I am for the McCain amendment. First of all, we set up a program to fund graduate medical education. It was done a long time ago, but in essence, we were running a surplus in Medicare, so rather than coming up with a funding mechanism for training doctors, Congress simply reached into Medicare and took the money away from beneficiaries and from payroll taxpayers to fund graduate medical education. It is an outrage that with Medicare on the verge of being insolvent, we are still plundering the Medicare trust fund to pay for graduate medical education. I believe that should end. Basically, we have an entitlement program run by the Department of Health and Human Services which pays teaching hospitals for residents to be trained in various specialties. The average subsidy is about $100,000 a year per slot. About $35,000 of that amount goes to the resident and $65,000 to help fund the cost of graduate medical education. Now, there is virtual unanimity that we are training too many doctors and too many specialists. Rather than going back and eliminating the entitlement or reducing the payment for the entitlement so that fewer schools will be providing the training to fewer students, Congress was afraid to change the program. It simply lacked the political courage to cut these entitlements to graduate medical schools. So HCFA initiated a pilot program in one State, New York, and started paying medical schools not to train doctors. Basically it works like this: If the teaching hospital agrees not to train a doctor they otherwise are entitled to receive funding to train, then we pay them the money. Interestingly enough, in the first 2 years of the program we are going to pay them $100,000. Yet by not training a resident, they do not have to pay a resident $35,000. So now they are getting $35,000 more for not training the doctor than they got for training the doctor during the first 2 years. Now, basically, this is an absurd situation. The idea we are taking the taxpayers' money and paying people not to train doctors is almost unbelievable. If you went out and did a survey of the American people and asked them about this program, they would not believe the Government would be doing this. But not only are we doing it in a very small provision in this budget bill we passed, a provision that most Members knew absolutely nothing about, we are expanding this program from just New York to the whole country. So we are going to be paying people all over America not to train physicians.

Mr. GRAMM. Mr. President, let me ask the Senator from Arizona to yield me 5 minutes.

Mr. GRAMM. There will be people who come over and say, well, in the long run, it will save us money to pay medical schools not to train doctors. My response is that this is an absurd program. We ought to stop doing it. We ought to end the program right here on the floor of the Senate today. Then the committee can go back, because it will be forced to do something about the program, and come up with a coherent program to reduce the overall subsidy. But we should not get into a situation where we are doing in medicine what we did in agriculture for years and years and years, and that is paying people to not produce things that we do not want. It is unimaginable this has occurred. Yet it has. It needs to be stopped. I want to urge my colleagues to vote for the McCain amendment, and then all the technical things that need to be fixed about it we will fix later. Unanimous-Consent Agreement

Mr. GRAMM. I yield 1 additional minute and I will be through.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me review what the issue is before the Senate and make it clear that there is nothing confusing about the Kennedy amendment. The objective of the Kennedy amendment is to require the taxpayer to pay for yet another union election. Now, let me go back to the facts and then delineate where I believe Senator Kennedy drifts far afield from the facts. I also want to respond to this assertion about UPS, which borders on violating rule XIX of the U.S. Senate. Now, first, let me begin with the consent decree. Because of corruption in the Teamsters, we entered into a consent decree which resulted in the taxpayers paying for the 1996 Teamsters election. The taxpayers spent $22 million. The person appointed to oversee the election, having been paid $300,000 to $400,000, a couple of weeks after it was known that we clearly had violations in the election, now, belatedly, has raised questions. Now, my point and the point of the Nickles amendment is that we agreed to pay for the election, and we paid for the election. The point is that we did not get the election that we paid for. Perhaps the amendment of Senator Nickles should demand that we get our $22 million back because the same corruption we were trying to stop apparently occurred again. Now, nothing in the Nickles amendment interferes with the consent agreement, except that the Nickles amendment makes it clear that the Constitution of the United States does not give a judge the power of the Federal purse. The Nickles amendment says we paid for an election we didn't get, and we are not paying for another election. The judge can require another election, which I assume he will do. But under the Nickles amendment, he will have to require the Teamsters to pay for the election. We have already paid for one election and we didn't get it. I hope while he is at it, he will fire everybody who drew these salaries to oversee an election through which they slept. Now, as for the UPS strike having anything to do with this amendment, that assertion violates rule XIX of the U.S. Senate. We are impugning the motives of people offering this amendment. If I stood up on the floor of the Senate and said that this amendment was offered by a Democratic Senator because the Democratic Party colluded with the Teamsters Union, I would be subject to rule XIX, and rightly so. I would never do that. And to come to the floor of the Senate and suggest that Senator Nickles' amendment has anything to do with anything other than stopping the purchase of another election when we didn't get the first one we paid for is outrageous. I was on the verge of raising rule XIX on that assertion. I think it assaults the dignity of the Senate to try to impugn the motives of people who are offering serious amendments. Now, with regard to the judge, the Nickles amendment doesn't restrict the judge. The judge can order a new election; he can fire the people who didn't do their jobs the first time; and the judge can set out the parameters of the new election. But under the Nickles amendment, the judge cannot say to the taxpayer: You already paid for an election you didn't get and we are going to make you pay for another election. All the Nickles amendment does is assert the power of Congress to expend money. It says to the judge and the courts that we are passing a law that says we already paid for our election and any future election will have to be reimbursed. The cost that the Federal taxpayer should incur in overseeing that election will have to be reimbursed by the beneficiaries, the members of the union, who, hopefully, will get an honest election in the future. We had a consent decree; the Federal Government has lived up to the consent decree. We spent $22 million for an election that we did not get. We were supposed to have gotten an honest election, but apparently did not. The question is: Are we going to do it again? I think it is a very clear vote. We attempted to have an honest election once, which we did not get, even after the taxpayer paid $22 million. Now the person who was given the responsibility of overseeing that election says that a fair election did not occur. Should we be forced to pay again? The Nickles amendment says no. I think the American people would say no. So the Kennedy amendment puts this back in the hands of the court. And, basically, his argument is, let a Federal judge appropriate and expend another $22 million if he chooses. The Constitution is very clear about who has the power of the purse. The Nickles amendment, totally within the consent decree, simply says that we paid to have an honest election, but we didn't get what we paid for. Quite frankly, I would vote for an amendment that demanded our $22 million back. But the point is that the Nickles amendment simply says that if another election is ordered, which it almost certainly will be, the beneficiaries of the election pay for it. So it does not interrupt the consent decree. We have lived up to our end of the bargain, but the participants in the election and the overseers did not live up to their end of the bargain. This is a question of whether you want the taxpayers to fund a second election when the first election was apparently fraudulent. The Nickles amendment says no; the Kennedy amendment says yes, but does it indirectly by saying let's let the judge take the rap for requiring us to pay for the election the second time. I say this is an issue the Congress should decide. We have the constitutional responsibility to spend or not spend money. I say buying one election you didn't get is one too many. I support the Nickles amendment, and I hope people will vote to defeat--by voting to table-- the Kennedy amendment so that we can vote on the Nickles amendment, which simply says that we paid for an honest election, we didn't get it, and we are not paying for a second one. That is the issue. It is as clear-cut as it can be, and hiding behind some black-robed official who does not have the inconvenience of having to run for reelection and having to answer to voters for spending their money, I don't think is a way the U.S. Senate, as the greatest deliberative body in the world, should be acting. This is a clear-cut choice, and the choice is: No more money to pay for elections that don't seem to be held fairly. I yield the floor. Mr. WELLSTONE addressed the Chair.

Mr. GRAMM. Can we get a time limit on the debate before the tabling motion?

Mr. GRAMM. I assume we will go back and forth?

Mr. GRAMM

Mr. GRAMM. I thank the Senator from New Mexico. Mr. President, let me begin with the tax cut. First of all, I think if you are going to judge what has been done, you have to first begin by looking at the fact that we are cutting taxes by approximately 1 percent. The tax cut on average over the next 5 years will lower the tax burden on the American people by slightly less than 1 percent. So for all of those who are saying, ``Well, the Tax Code becomes more complicated, the changes that are made are piecemeal,'' all of that was driven by the fact that with the bipartisan nature of this bill and the fact that we have a President who was adamantly opposed to cutting taxes until 3 years ago, who only endorsed the concept of trying to balance the budget 2 years ago, that we had a very limited amount of resources. Obviously, for people who have listened to much of this debate and have gotten the idea that we are talking about a huge tax cut, they are going to be disappointed. But there are some people who are going to be directly affected, and in a very positive way. Right at the top of the list will be people who have families and who have children. Nearly all of the $85 billion net tax cut we have in this bill goes directly to families with children. Why single them out? I am sure there are people who say, ``Well, children are important. Families are important. But why such a focus of this tax bill on children?'' Let me explain why. In 1950, the dependent exemption--the amount you got to deduct from your income because you had a dependent--was $500. As a result of that $500 dependent exemption for children in 1950, 65 percent of all income of the average income working family was not subject to income taxes in the average family of four in America. Today the dependent exemption is $2,500. But to cover the same expenses and to protect the same level of income that it did in 1950, it would have to be twice that big, or $5,000 per child. So what has happened since 1950 is that the real dependent exemption in terms of letting working families keep their money to invest in their own children has effectively been cut in half. If you look at the Tax Code, what has happened is this: In 1950, rich people paid a lot of taxes. And today rich people pay a lot of taxes. In 1950, poor people didn't pay any income taxes to speak of. And today poor people do not pay any income taxes to speak of. But the explosion of Government between 1950 and today has been almost totally funded by a massive growing tax burden on working families with children. And we have literally starved the one institution in America that really works--the family. So our primary focus--first, in the Contract with America, then the budget 2 years ago, then the budget a year ago, and now the budget this year--has been to give a $500 tax credit per child and to let working families invest in their own children, their own family, their own future, recognizing that the best housing program, nutrition program, and education program is to let working families keep their own money and invest in their own children, their own family, and their own future. Second, in this tax cut bill we begin the long process of eliminating the death tax. People work a lifetime to build up a farm, or a small business, or to build up assets. And they do it for their children and their future. And they make the country rich in the process. But when they die, even though they pay taxes on every penny they earned along the way, when they try to pass these assets on to their children, the Government comes in and takes up to 55 cents out of every dollar. So it routinely happens in America every day that parents die, and then their children have to sell the fruits of their lifetime labors-- their business, their farm, their home, their assets--in order to give Government 55 cents out of every dollar of its value. Republicans believe that is wrong. We believe you ought to tax income once, and not twice. And I think the changes we made in this area, especially for small businesses and family farms, is very, very important. I believe that people who are trying to educate their children will be beneficiaries of this program. Quite frankly, my favorite part of the tax bill in the area of education is not the President's initiative. It is instead an initiative that came from Senator Roth. That is the initiative that lets people when they get out of school treat student loan interest payments as a business expense. Think about it for a minute. If you go out and buy a tractor, you can depreciate that tractor--write its value off against your income. But if you invest in going to college, or graduate school or medical school by borrowing a bunch of money on a guaranteed student loan, when you get out of college and you start to work with that big heavy burden of debt, none of the expenses you incurred in getting the education that economists call ``human capital'' can be written off as a business expense. So our society's Tax Code has historically discriminated against investing in our own people. One of the provisions of this bill that is critically important is the provision that for the first time will let a young wage earner who has gotten out of school, who has a big guaranteed student loan, to write off that interest against the income they are earning as a result of the earning power they got from going to college, or graduate school, or professional school. And I believe this is going to encourage people to go to school longer and to accumulate greater human capital. There are a lot of provisions in the tax bill. I believe the tax bill is basically a good bill, and the American people are going to benefit from it. Not everybody is going to benefit. The top 5 percent of income earners pay 50 percent of the taxes. They are going to benefit from none of the general tax provisions. They will benefit marginally from the death tax change. They will benefit from the capital gains tax. But the focus of our benefit, quite frankly, with simply a 1-percent cut in taxes, is where it ought to be--on working middle-income families. We have had a long debate with the President, and the President has won the debate in this bill. But what is the old saying? He, convinced against his will, is unconvinced still. And let me say I think it is a fundamental error, even though I am going to vote for the tax package, it is a fundamental mistake in a tax bill that only provides $17 billion of tax cuts a year, it is fundamentally unfair to take part of that tax cut away from working two-income families in order to give a tax cut to people who do not pay income taxes. I believe that tax cut bills should be aimed at cutting taxes for people who pay them. In any case, that is where we are in the tax bill. Let me turn now to the spending bill. The best provision in the spending bill, from my point of view, is expanded choice on Medicare. Medicare has grown by 12 percent a year in cost in the last 20 years. No major program has ever grown that fast before, and, as a result, even with the reforms we have instituted, even under the best of circumstances, Medicare is destined to become the largest and most expensive program in the history of the American Government. But by letting our senior citizens have more choices, by encouraging competition, by allowing a broad range of choices between the traditional HMO and fee-for-service medicine, we are going to for the first time bring the forces of competition to bear on controlling the cost of Medicare. Since 1965, we have tried to use Government regulation to control Medicare costs, and it has been a total and absolute failure. We are now going to try the forces of competition. I believe that they are going to be successful, and I believe that the most remembered part of the spending bill that is before us will be the expanded choices that we provide under Medicare. If we allow each of these choices to develop, if we continue to refine them and promote competition, I believe we can and will over time drive the cost of Medicare growth down to roughly the cost of medical care in the market system. Last year, the cost of medical care in the private sector of the economy actually grew less than the Consumer Price Index. Medicare continues to outpace inflation by a wide margin. I believe that by bringing the forces of competition to bear, we have made a fundamental change in at least part of the Medicare problem. Our failure to deal with the long-term Medicare problem is my greatest disappointment with the bill before us. Someone said in the newspaper this morning that the subtitle of this bill ought to be ``Opportunity Lost.'' I agree with that. I believe that we have missed a golden opportunity to begin the reform that will be required to keep Medicare solvent. I am proud of the Senate. I am proud of the three votes we cast to keep provisions in our bill that would have raised the eligibility age on Medicare to conform to Social Security, that would have asked very high-income retirees to pay their full part B premiums, that being the voluntary part of Medicare that you don't pay a penny for during your working life, and finally to have a simple $5 copayment for home health care. Home health care is the fastest growing part of Medicare. The President had a 10-percent copayment in his national health insurance bill. The Democratic leader, Senator Mitchell, when he offered the final version of the President's plan 3 years ago, proposed a 20- percent copayment. Prior to 1972, we had a 20-percent copayment. And the rejection of a simple $5 copayment to try to induce people to be cost conscious was, I believe, a sad commentary on the lack of leadership both at the White House and in the Congress. I believe we missed a real opportunity to reform Medicare, and I believe that each and every one of these things will be done. Going back to a point that our colleague, Senator Kerrey from Nebraska, made earlier, the longer we wait to institute these reforms, the more difficult it is going to become to make these reforms work because the problem is going to get bigger. Some people are encouraged by the fact that we have set up a commission in this bill. Forgive me for being underwhelmed at setting up yet another commission. We have already had an entitlement commission. It has already reported. We know what the situation is. Let me just summarize it. Under the best of circumstances, if everything goes right, if the economy stays strong, if we have the best possible circumstances that we could expect over the next 25 years, our current policy on Medicare and Social Security will require the payroll tax to double from 15 percent to 30 percent on every working person in America. Under the best of circumstances, if we do not change policy, we are going to have a doubling of the payroll tax in 25 years, and nobody disputes it. Under the pessimistic scenario of lower growth, we are going to have to triple payroll taxes. Let me remind you what that means. It means that a low-income worker who is paying 15 percent of his income in taxes and 15 percent in payroll taxes will go from a 30-percent marginal tax rate to a 45- percent marginal tax rate. What it will mean, if we do not do something to reform Medicare and Social Security, is that, with absolute certainty, 25 years from today the average working American will be paying over 50 cents out of every dollar they earn in payroll taxes and income taxes. For those people who said, do not make these hard choices in Medicare, they are the people who are going to have to explain why we are doubling payroll taxes over the next 25 years. I believe we have a crisis in this area, and let me say the first week we are back, as chairman of the Medicare subcommittee, we are going to hold a series of hearings on Medicare. Senator Kerrey and I are going to reintroduce our reforms as a freestanding bill, and we are not going to let this issue die. I am also going to expand our hearings to begin to look at private investments and ownership of assets especially by young workers as a way to guarantee that they have Social Security benefits when they retire and as a way of guaranteeing that they have Medicare benefits. If we do not change this program, with the baby-boom generation retiring in 14 years, we are going to have a generation of Americans that will be paying 30 percent payroll taxes to pay benefits to retirees who will never get benefits out of these programs that are in any way related to what they paid in. Only if we begin to reform these programs now and only if we begin to restructure the system so when a young person is setting aside money for their retirement, it is not going to some phantom account with the Social Security Administration but where it is going in a real investment in something they own and can depend on and trust, until we collateralize or securitize the Social Security and the Medicare contributions of our young people, their retirement is not going to be secure. Senator Domenici said that I was going to talk about the welfare reform, and I am. One of my biggest disappointments in this bill is that, as it is currently structured, we have gone a long way toward killing welfare reform, and let me explain why. First of all, we made some tough decisions about denying benefits, setting higher standards and saying, especially to immigrants, you come to America. You have to come with your sleeves rolled up ready to go to work. You cannot come to America with your hand held out ready to go on welfare. We have partially reversed that in this bill, and we are going to spend tens of billions of dollars providing benefits to people who are denied benefits under our welfare bill, but that is the smallest part of the problem. As a result of the administration responding to special interest groups, especially organized labor, we now have provisions that will make it virtually impossible for States to require welfare recipients to work, and let me explain why. If a State has a mandatory work requirement, and let us say they want to require welfare recipients who are young mothers who have one skill, and that skill is taking care of children, and let us say they set up in Government housing projects a day care center, and they ask some welfare recipients to do part of the baby-sitting under supervision, under the provisions of this bill and under the new requirements that have been set by the administration, we would have to pay minimum wage. We would have to provide fringe benefits. We could not count all the welfare benefits they are getting like Medicaid and housing subsidies as part of those wages. And so it is going to cost States substantial amounts of money to put welfare recipients to work where they would acquire skills that would let them go out in the marketplace and work. The net result is going to be that we are in reality coming very close to killing the very welfare reform bill that was the greatest achievement of the last Congress. These are trainees. They are people who are receiving public benefits, and to ask them, in return for those benefits, to do productive work is the most reasonable thing imaginable. It was something that a large percentage of Senators and Congressmen on a bipartisan basis agreed to last year, and yet 1 year later, with administrative action by the President and through this bill, we are going to make it virtually impossible for the States to have a work program for welfare recipients. Now, I am hopeful that we can in the future come out with a bill that will at least let the States count all the benefits that are received by people who are receiving welfare in calculating what their effective wage is by working. But this is a very, very serious matter. I am also very concerned about this massive new program to give health insurance to children. Who can be opposed to health insurance for children? Nobody. Bismarck once said, never does a socialist stand on firmer ground than when he argues for the best principles of health. And I would just paraphrase Bismarck by saying, never does a socialist stand on firmer ground or higher ground than when he argues for the best principles of health for children. But here is the problem. We started off with a bill that had a broad consensus and it was a bill where we were going to spend $16 billion to try to help the States get access for health coverage for children from very low-income families. What happened in the process is that the piling on of the tobacco industry got caught up in this, so, whereas the President started out with $16 billion, it has now already grown to $24 billion before we adopt the bill, and does anybody believe that this program is not going to explode in the future? Here is the problem. Once you get up to roughly 200 percent of poverty, 82 percent of the children are covered by private health insurance. So, unless we are very fortunate, what is going to happen to us in this bill is that we are going to end up having four children who will give up, through their families, private health insurance, for every one new child we get covered. So 80 percent of our money will simply displace private health insurance. And how can you blame them? If you have a moderate-income family, having trouble making ends meet, and we are going to give their children private health insurance, what rational parents are going to continue to pay for it themselves? So, we have the very real specter, here, of spending a tremendous amount of money and covering almost no additional children. Let me say, I totally agree with Senator Domenici. I think the worst choice we could have made was simply going through Medicaid, when all 50 Governors, 2 years ago, told the Congress that they could do what Medicaid was doing for 30 percent less if we would let them do it. But I think we have to be very concerned about this program. I hope we are as committed to monitoring what we are doing as we are to doing it. If it becomes clear that all we are doing is displacing private health insurance, I hope we will be willing to go back and try to adjust this program to try to prevent that from happening. I am also very concerned about all of these new benefits. Again, they are not benefits anybody can be against. We are cutting the copayment for outpatient care under Medicare. We are adding a whole bunch of new benefits to Medicare. The problem is, Medicare is going broke as quickly as it can go broke. The only reason we can claim we have saved it for 10 years is we, in the process, were forced to give in to the administration's demand that we take the fastest growing part of Medicare and take it out of the trust fund and put it into general revenue. As I said when we first debated this, I can make Medicare solvent for 100 years by simply taking hospital care out of the trust fund. But have we changed anything by doing it? The answer is no. I am concerned that, by creating these new benefits, all of which are popular, that we have to look and see whether, in fact, we made the problem better or worse. I am very skeptical that cutting reimbursements to doctors and hospitals will really save money. The reason I am skeptical is that, as we have gone back and looked at our reforms in the past, that has not been a very effective way to save money. Because what tends to happen is that doctors and hospitals-- basically, doctors are smart people or they wouldn't be doctors; hospitals tend to be run by smart people--what they do is they figure out how they can change the billing so they end up billing for more and getting the same amount of money. So, I am concerned about these add-on benefits. I am worried that these new programs are like little baby elephants, they are little and pretty now, but if we are not careful they are going to all grow, each one, into a big elephant. And, as we talk about balancing the budget, the final subject I wanted to talk about, this could be a problem for us. Finally, let me talk about balancing the budget. I have been involved in budget debates since I first came to the House of Representatives. We have, on many occasions, claimed to have balanced the budget. Many of us on various occasions have thought we had really done it. And I think, on balancing the budget, it is important to remember an adage that Abraham Lincoln used to be fond of. Abraham Lincoln once said, ``The hen is the wisest of all birds. She never cackles until the egg is laid.'' I believe that a lot of work is going to be required to make this budget ultimately produce a balanced budget. Much of this budget is based on assumptions about a strong economy--which today is very strong. Obviously, we all want it to stay strong and we are going to try to make it stronger. It is also based on the premise that these programs are not going to grow beyond the levels we have set out in our budgets, even the new programs, and that we are going to live up to these discretionary spending caps. Obviously, it is hard to live up to them. As everybody knows, we pass emergency appropriations bills for $8 billion, and we end up breaking the budget, not only in the year we are in but for the next 3 or 4 years. We don't write money for emergencies into the bill, knowing we will have an emergency bill. It is going to take a tremendous amount of concerted, bipartisan effort to live up to the commitments we made on discretionary spending. I hope our colleagues are as committed to living up to this budget as they are to adopting it. I think, if they are, we might have a fighting chance. But clearly, balancing the budget is not something you buy on a one-time payment. You buy it on the installment plan. And the weakness of the program is it is based on the assumption that this very strong economy is going to continue into the future. It may and it may not. We are in the second-longest peacetime expansion in American history. I think it is highly improbable that we would go 5 years without an adjustment. But we could still balance the budget with a minor recession if we could control the growth of these programs. I wish, as I said numerous times during the budget debate, we could have done more to control spending. I wish we could have bought more insurance. But, in conclusion, let me say that the reforms in Medicare, the expanded choices, represent a fundamental change in policy. And I believe we will all benefit from them. I think we did about as good a job, given that we had a Democrat President who had very strong goals in the tax bill, especially a belief that you can't cut taxes for people who pay taxes unless you give money to people who don't pay income taxes. I think, given that we had 1 percent of taxes to deal with and we had a President who didn't share our fundamental goal, I think overall we did a pretty good job on the tax bill and I think we have reason to be proud of that. I think the reforms and choice on Medicare are good reforms. But I think there is really reason to be concerned about what we have allowed to happen on welfare reform, and much of our budget is assuming that the progress we have made on reducing the welfare rolls is going to continue. I think we have to be concerned about growth, especially in these new programs. We have to enforce the discretionary spending caps to have any chance of balancing the Federal budget. So my message today is that there is a lot of work to be done. I look forward to participating with Senator Domenici and with our colleagues to try to get that work done. I yield the floor.