Judd Gregg

Mr. GREGG

Mr. GREGG. Madam President, I congratulate the Senator from Arizona and the Senator from South Dakota for framing this debate on health care with very specific and excellent points. The simple fact is that the cost of this program is grossly understated, but the cost is extraordinary, even when understated-- almost a trillion dollars. The real cost is $1.8 trillion, when it is fully phased in. In fact, if you include in it the doctor fix, which was taken off the table so the cost would look better, which is $200 billion-plus, the cost of this proposal, when fully phased in, is over $2 trillion over a 10-year period. And the offsets that are going to be used to pay for this? Their plan is basically to cut Medicare Advantage, eliminate that program for seniors--a lot of seniors like Medicare Advantage--and try to save about $400 billion doing that and take that money and create a brand new entitlement to benefit people who do not have insurance or people who do not have enough insurance, as defined by this bill. In addition, they will raise taxes and raise fees. Most of the fees will be coming in from the hospital associations, the doctors, the drug companies, and the insurers, all of which will be passed through, of course, to consumers in the form of higher premiums or higher costs. Again, it is going to be the consumers of America, Middle America, the people who use health care in this country, who are going to pay the cost. It is a huge gap even between the stated amount that is going to be raised in this bill, and the real expenditure in this bill. And that gap goes directly onto the debt of our children--the debt of this country, which has to be paid for by our children. This is in the context of an administration which has exploded the size of government in the first 10 months of its term--exploded the size of government. They have proposed a budget which over the next 10 years will run on the average $1 trillion of deficit every year, which will take the Federal debt from about 41 percent of gross domestic product up to 80 percent of gross domestic product, which will take Federal spending from about 20 percent of gross domestic product up to about 25 percent of gross domestic product. What do all those numbers mean? They mean quite simply that our children are going to be passed a country which will have so much debt and such a large government that it simply cannot afford it; that the quality of life of our children, as they move into their earning years, is going to be fundamentally undermined--their ability to buy a home, their ability to send their kids to college, their ability to just live the quality of lifestyle our generation has had is going to be fundamentally harmed by this administration's decisions to spend today as if there is no tomorrow or to spend today and pass the bills on to tomorrow. It is a true affront to the traditions of this country. Let me quote from Thomas Jefferson because Thomas Jefferson is deemed to be the founder of the Democratic Party. Thomas Jefferson got a lot of things right, of course. He wrote the Declaration of Independence, the most brilliant document in the history of mankind stating freedoms to which we subscribe. He played a major role in defining our Nation and what makes our Nation special. He said this about debt. This was a letter to John Taylor in 1816: I sincerely believe . . . that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale. That is a pretty strong word, ``swindling,'' used by the founder of the Democratic Party relative to the use of debt. Then he wrote to William Plumer, who, coincidentally, was the Governor of New Hampshire, in a letter. He said: I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. The proposals which are coming out of this administration do swindle our children's future, just as Thomas Jefferson said. To run debts of this size, to run deficits of this size, to put in place a program that is going to cost almost $2 trillion when it is fully implemented is basically to guarantee that this Nation is going to have such a burden of government that we will be unable to sustain our government in the form it is today. What does that lead to when you run up those types of deficits and debt, when you run up that type of spending? It leads to two options: Our children are either going to inherit a nation where we have to devalue the dollar, and basically create a situation where everybody's savings and everybody's net worth is dramatically impacted by lessening the value of that through inflation or, alternatively, you are going to have to dramatically increase the tax burden of this country to a point where you will undermine the fundamental productivity of our Nation and put job creation and the capacity to have prosperity through job creation at risk because the tax burden will become so high. In fact, it was pointed out, studies have shown that the tax burden will go up to 59 percent of income under some of the proposals that are pending just on this bill, to say nothing of when you start totaling up all the other bills, all the spending that will occur. Even today, the administration announced they want to spend $14.5 billion more without offsetting it in any way to fund an interest group they feel needs to be funded. This raises the fundamental question: Why do you proceed in this way? Why would you create a program that is going to have such a devastating impact on the economic future of our Nation? You do it because it gets you votes in the next election, I guess. I guess that is why you do it. Certainly there are ways to reform health care, to improve health care that do not require this massive expansion in the size of government. There are a lot of ways to do that. Let me give a few. For example, we could focus on the chronic diseases which are the drivers of health care costs in this country, diseases such as obesity and Alzheimer's. We could try to get those under control. That would help control costs. We could give employers the incentive through monetary payments-- actual cash--to say to their employees: Listen, if you go out and live a healthy lifestyle, we will give a reward in cash. If you stop smoking, if you get yourself into a workout situation where you drop weight, if you take tests such as having a colonoscopy, if you have a mammogram, we are going to reward you with money. That is a step which would significantly improve health care delivery and costs in this country. We can say to the delivery systems: Listen, rather than doing a lot of quantity for the purposes of generating revenue, why don't you do a little quality with value tied to it? There are health care delivery systems in this country today which accomplish that. Rochester, MN; Salt Lake City, UT; Pittsburgh, PA--there are a whole series of these centers which have shown you can deliver better quality at lower costs if you are intelligent about it and reduce overutilization. We could, as was discussed at length by the Senator from South Dakota and the Senator from Arizona, do something about abusive lawsuits. The simple fact is, abusive lawsuits are driving huge costs in the health care system. Thirty percent of health care is deemed to be defensive medicine. There is no reason doctors should have to give tests they don't believe they have to give, but they have to give in order to defend themselves from lawsuits. Those are foolish and expensive. Madam President, $54 billion is the cost estimate from CBO of savings just from that one item, and that is an understated cost because it doesn't, as was pointed out, calculate the defensive medicine side. Those are a few good ideas, but there are a lot more good ideas. It can be done on a step-by-step approach which gives us better health care without this attempt to basically take over the entire system. Let's not play any more games around here. What is this about? This is about creating a system, putting in place an alleged comprehensive reform, the purpose of which is to drive private activity out of the market because there are a lot of people on the other side of the aisle who believe profit is bad and the marketplace does not work in health care, and that we should move towards a single-payer system. That is what this is about. Raise premiums to a level where employers will be forced to drop their insurance and push people into what is called this exchange. There will be a public plan in the exchange when it comes from the conference committee, should it get that far--hopefully it will not but if it does--and then basically push everybody into the public plan and create an atmosphere where the playing field is so tilted against any sort of private activity that people who have their insurance today will lose it and you will have to choose a public plan, for all intents and purposes. That will be your choice 4 or 5 years from now. The effect of that, of course, of moving toward a single-payer system, which is the stated goal of many of my colleagues on the other side and a majority of the people in the House of Representatives, the effect of moving to a single-payer system or a nationalized system is very destructive to our health care generally. Primarily, it means people will end up with delays. There will be price controls put in place relative to certain types of medicines you can receive. Innovation will be stifled because people will not be able to invest money and get a reasonable return, especially in the area of development of new pharmaceuticals and new biologics, which are so critical to the health care system today. We will have people standing in line. We will have people basically being subject to delays. We will have people, I absolutely guarantee you, finding their health care rationed depending on their age, as occurs in England under its system. And we will simply see a significant lessening of innovation and, most important, people will not have choices. You will basically be forced off the private system into a public system. This is the ultimate goal here--not stated but clearly intended of what is going to happen if you move toward a system as has been outlined at least in the Kennedy-Dodd bill, as it came out of the HELP Committee and is now somewhere in this building--we don't know where-- being merged into a new piece of legislation with the Finance Committee bill. So when Thomas Jefferson makes this point that you should not swindle the next generation by radically expanding your debt, we should live by that because it is a pretty good point. When a bill is brought forward on this floor which alleges to be fiscally responsible and it claims it meets the obligation, it meets its costs, but it understates the costs by almost $1.2 trillion and overstates how much it is going to generate in revenues and you don't get these Medicare cuts unless--I have never seen Medicare reductions occur in this Congress. Then basically you are loading up the debt of our children. It is that simple. That is the inevitable response of this piece of legislation, that the debt will expand. As Thomas Jefferson said, he believed in ``the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.'' And this may be the largest scale of swindling that has ever occurred in America's history. I yield the floor.

Mr. GREGG

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

Mr. GREGG. Mr. President, I ask unanimous consent to speak as in morning business for 15 minutes.

Mr. GREGG. Mr. President, I wish to speak briefly. I know we are going to get a lot of debate on this issue as we go down the road relative to the health care package which was reported out of the Finance Committee and the health care package which was reported out of the HELP Committee, of which I am a member, and how they are being pulled together and what the implications are for health care and for Americans, generally, who are all affected by these bills. This is 16 percent of our national economy. There isn't an American who isn't impacted by health care. So when the Congress decides to fundamentally change--and that is what is being proposed--fundamentally change the way health care is delivered in this country, it will have an impact on everyone and a very significant impact on everyone who has to interface with the health care system in the immediate future. The bill that came out of the committee known as the Kennedy-Dodd Committee at the time, which is now the Harkin committee, which I am a member of, was a bill which basically subscribed to the view of a large majority, I think, of the House Democratic membership and a fairly significant group of Members on the Democratic side in the Senate, which essentially said the government should start to take very significant control over the health care delivery system in this country. In fact, they would propose a public plan, a plan that would basically put the government allegedly in competition with the private sector. But we all know the government isn't a fair competitor, because the government doesn't have to play by the same rules as the private sector, and that would put us on a slippery slope toward a single-payer system or a nationalized system, much like you have in Canada and England. They have some very severe problems in those countries. There isn't a lot of innovation in those nations in the area of health care. Health care isn't of the quality that we have here, and they have significant delays and, in many instances, actual rationing where certain people cannot get certain treatments because of their age or they don't qualify under the rules that are set up. It is not the type of system we want in this country. The purpose of health care reform should be to make health care insurance affordable to everyone, while in the outyears reducing the rate of growth of health care costs, and to allow people who have an insurance policy today to keep it. Those are the goals we set off when we stepped into the arena of trying to change the health care delivery system. Neither the Harkin bill--although it wasn't offered by him, but was offered by Senators Dodd and Kennedy--nor the Baucus bill accomplishes any of those three goals. In each of those situations-- take, for example, that everybody should have access to affordable health care. The Harkin bill, as scored by CBO, says that of the 47 million people who don't have health insurance, approximately 34 million would still not have it after that bill is fully phased in. The bill coming out of the Finance Committee varies and looks as if it is in the vicinity of about half of the people who don't have health care today will still not have it after that bill is phased in. As to the outyear costs, neither the Harkin bill nor the Kennedy bill controls outyear costs. In fact, the costs go up rather dramatically in the area of health care. As to letting people keep their insurance if they like it--no, that doesn't happen either. In fact, large numbers--in the millions, according to CBO--would migrate out of their private system into a public plan because basically the employer would drop their plan. That is also true, I believe, of the Baucus plan, although we haven't gotten a final score on that. When you set penalties for an employer at a level that says to them it is fiscally prudent for them to pay the penalty rather than insure people, many will give up the insurance and push people into the subsidized program, called the exchange. Thus, a lot of people will lose the insurance they have today. None of the three goals is met by these proposals. What do these bills do--especially the Baucus bill, which is the center of attention? First, they create a massive expansion of the size of the government. We are a government today that is running a deficit of $1.4 trillion this year. That is three times more than we have ever had in the history of this country--$1.4 trillion, which is about 12 percent of our economy. Historically, deficits have been about 3 percent of the economy. Today, it is $1.4 trillion or 12 percent of our economy. That deficit doesn't come down dramatically. We continue to run deficits under the President's plan, prior to this health care bill being passed, of approximately $1 trillion a year for the next 10 years. Average deficits over that 10-year period are between 5 and 6 percent of GDP, and we take the public debt from 40 percent of the GDP up to 80 percent. What do all these numbers mean? They are not just numbers thrown up in the air. They are obligations--debt we are running up on our children, because we have a government that is so large today that we cannot afford to pay the bills for it. Almost every economist of any note or credibility says that when you run deficits that exceed 3 percent of GDP for an extended period of time or when you take your public debt from 40 percent to 80 percent of GDP, you are basically creating an unsustainable situation--a situation where you cannot pay the debt, and where your children and our children's children, who will be subject to these deficits and debts, will end up with a government they cannot afford and which will lead inevitably to devaluing the dollar. We are already seeing a reaction to that in the international marketplace, and probably a massive increase in the tax burden, which reduces productivity and reduces, therefore, job creation. Those are not good scenarios for our kids. It means a lower standard of living, less opportunity to buy a home, to send their children to college, and less opportunity to do what our generation has been able to do, because they are having to bear such a burden of the Federal Government--on top of this government that is, today, already projected to run deficits as far as the eye can see of $1 trillion a year, to a public debt that will go from 40 percent to 80 percent of GDP. The proposal is that we are going to spend another--when it is fully phased in--$1.8 trillion over 10 years on this brandnew entitlement program. And then the almost laughable--were it not being presented in such a way that is claimed to be sincere--proposal is: but we are going to reduce the cost of government. A brandnew entitlement will be created, which costs us approximately $1.8 trillion over a 10-year period. It scores at $823 billion in the first 10 years because it is phased in. In the first 4 years, they take revenues in from the bill, but they don't start the program. The numbers are all skewed in the first 10 years. If you look at it in the 10-year tranche, where the program is fully implemented, it is $1.8 trillion. We are going to create this massive expansion of the size of government with these brandnew entitlements being put into place and, in the process, grow the government at a rate that it hasn't grown in recent history, taking government from about 20 percent of GDP up to about 23, 24 percent--unsustainable levels--and we claim we are going to do it while reducing the cost of government, which is absurd on its face. Some would argue that we need to do that in order to take care of health care, and that this is revenue neutral because, as a practical matter, we have put a cut in Medicare of $400 billion and tax increases of $500 billion, and those will pay for this over that 10-year period. What they fail to tell you, of course, is when it is fully implemented, neither the cut in Medicare is large enough, nor are the tax increases, to make those numbers. To give them the benefit of the doubt, let's say that this Congress is going to cut Medicare by $400 billion and create a new entitlement for uninsured people--take it from seniors and give it to the uninsured people. And this Congress is ready to raise taxes by $500 billion. Let's give the benefit of the doubt to the Congress, which I know isn't going to happen because, just 5 years ago, I was chairman of the Budget Committee and I suggested we reduce the rate of growth of Medicare by about $15 billion, and we could not get any votes on the other side of the aisle for that, and now they are suggesting they are going to cut it by $400 billion. That is what is called ``bait and switch.'' It doesn't happen. This proposal won't occur. As a practical matter, giving them the benefit of the doubt and saying they are able to raise close to $1 trillion in new taxes, or spending cuts in Medicare, over the next 10 years, recognizing in the following 10 years it is not nearly enough, why is that incorrect to have a program if it is paid for? I will tell you why. This government is running so much debt to the extent that if we are going to use resources like that, we ought to reduce the debt of the country, not use them to create a new program on top of a government that is too large as it is. We know for a fact--an absolute fact--that Medicare has a $34 trillion unfunded mandate. Try to think of that. That means we know that we have expenditures in Medicare that will exceed income in Medicare by $34 trillion. So why on Earth would we cut Medicare spending by $500 billion, or $400 billion, and use that money to create a new program? We should use that money, if we are going to take that action--and some of that action is responsible--and use it to make Medicare more solvent. If we are going to raise taxes by $500 billion--tax the rich, as the House claims, and they always end up taxing middle-class America, or are we going to add special fees against special industries, such as the pharmaceutical, hospital, medical device, and other industries? If we are going to do that and assess a penalty on people who don't buy insurance, and we are going to assess small businesses that don't buy insurance a penalty, should we not use that money to reduce the burden of the debt of this country as it is being driven by the present health care system, not by adding a brandnew entitlement that absorbs all those resources? There are a lot of ways we can do health care reform here that are much more responsible than what is being proposed. The recent claim by the White House and Members of the other side is that this bill isn't going to affect people's premiums at all. The premiums will go up, but no more than usual. That is so unbelievable on its face. Think about this. This bill suggests that insurance companies are going to have to pick up a massive increase in the cost of insuring people because--for a lot of technical reasons, but basically it sets up a system where not enough people will be coming into the insurance pool; a lot will be opting out to cover the additional costs, which is going to have to occur as a result of the very rich benefits package under this bill and the fact that there is no longer any exclusion. Everybody gets covered by insurance. So on the face of it, insurance companies aren't going to be able to absorb those costs. They are going to pass them off to the people who pay the premiums. Then the bill suggests they are going to put another 14 million people under Medicaid--take Medicaid coverage from 100 percent up to 133 percent of poverty. We already know Medicaid only pays 60 percent of the cost of health care. We already know that for the people under Medicaid, 40 percent of the cost is being borne by people with private insurance, who are paying for not only the cost of their health care but for the 40 percent of health care costs that are not reimbursed under Medicaid. So when you add another 14 million people, that goes onto the premiums of the people in the private sector. Thus, the premiums have to go up because they cannot absorb all the costs. Then we know that a large number of people will come into the system but not enough to cover the fact that everybody is going to be required to be covered. There is going to be something called ``adverse selection,'' where some folks basically buy coverage at the last minute because they are suddenly finding they are sick and haven't been paying into the pool very long. They will be able to do that under this system and, thus, drive up the cost of insurance for everybody else. We know the insurance prices will go up there. We know the premiums are going to go up significantly. That is just common sense. Whether you accept the study by the insurance companies or look at what--it is like 1 and 1 makes 2. It is an obvious fact. Then we ought to know something else. The hospitals, under this proposal, have agreed to chip in--in order to basically be at the table--for something like $20 billion or $40 billion. The drug companies have agreed to chip in $80 billion. When you add that all up--all of which is passed back to consumers--none of them will absorb all of the costs, and you end up raising the cost of health care. In the end, people's premiums will go up--people who have private insurance. You might say: Why would somebody do that? Why would somebody drive up premiums on people? I will tell you why. Because the goal here is to basically eliminate private insurance. The goal here is to create a structure where essentially people who get private health care through private insurance or their employer will be forced out of that health care insurance and into an exchange, where there will be a public plan, when this is all over. The government will essentially absorb all insurance. This is not a good idea. Why isn't it a good idea? Because the government basically, in order to control costs, can only do two things: it can limit access or it can control prices. I ask unanimous consent for an additional 5 minutes.

Mr. GREGG. It can limit access or control prices. Either way, it significantly undermines the quality of health care. There are about 180 million people in this country--or more, I guess--who already have health care and are fairly comfortable with the health care they are getting under the private system. There are about 190 million, actually. But they are going to be at deep risk. There is something else here that is very serious that we have to think about. As you start to put these types of pressures on the system and you start to regulate prices and you start to regulate access and you start to regulate reimbursement and you have the government doing all of this, you start to stifle innovation. A lot of the drugs that come on the market today come on after a massive period of time of research--I think it averages 15 years--and a huge amount of investment. I think it is $800 million to bring a new drug to the market. That $800 million does not appear from out of the sky. People who are investing money say: I am willing to invest in that drug because I think it will work and it will do social good, but I also think I am going to get a reasonable return on my investment. But if you set up a system where you have price controls and where the return on investment is artificially low, you basically don't allow people to recover their costs or their costs plus a reasonable return on their investment. Then the money will not go into those research activities, the money will go somewhere else. It will go into new software. It will go into new machinery. It will go into real estate ventures where the return is better. You inevitably chill the investment in the innovation, especially in the area of pharmaceuticals, which is where most of the great research is being done today that is making better health care outcomes more available.

Mr. GREGG. I am honored to respond.

Mr. GREGG. The Senator from Georgia asks a very appropriate question because the practical effect of the reductions which are being proposed is that people who are on Medicare Advantage, which is a program many seniors like, will be eliminated. They will no longer have the opportunity to use Medicare Advantage or it will be contracted so much that it will be a shell of its former self. This is being done not in order to make Medicare solvent--and there are very serious issues about Medicare solvency--it is being done in order to move that money over and start a new entitlement for a new group of people who are not seniors and who have not paid into the health insurance trust fund and who have no relationship at all to Medicare.

Mr. GREGG. The Senator asks another good question. ``No'' is the simple answer. We all know that once you start a mandatory program, it always grows and grows significantly. That, of course, is why we are in such trouble as a nation, because we have a number of mandatory programs to which so much has been added that we simply cannot afford them any longer under our present structure of a government. Now we are going to take that problem and compound it by $1.8 trillion, which is pretty irresponsible of us and fiscally irresponsible, but it is also irresponsible in the sense of stewards of our children's future because our children are going to inherit a government that cannot be afforded and they are going to get bills or get a devalued dollar.

Mr. GREGG. The Senator from Georgia is expressing a problem which I think most State Governors are extraordinarily worried about, whether they are Republicans or Democrats, which is that this bill, as it starts up, covers the additional people who will be pushed into Medicaid, which is about 14 million nationally, but that coverage drops off in the outyears, and it will put many States in dire straits. The Senator from Georgia talked about the numbers in Georgia. New Hampshire will have the exact same problem, only we do not have a balanced budget amendment. We are not that foresighted. I wish we were. So we already have a problem. We are already running major deficits in the State of New Hampshire, and if you throw these new Medicaid costs on, you are going to make it very difficult to do things such as spend on school systems and, especially in New Hampshire, on our college systems and our mental health care systems which are key to our quality of life in New Hampshire. This will be a massive unfunded mandate. I saw the number $33 billion as being what the States will end up picking up over the 10-year period. That is a big number for States to pick up. It will put massive strains on State budgets. It is another example of the Federal Government saying: Here, look at the wonderful things we have done for everybody, and then sending the bill to the States, which is totally inappropriate.

Mr. GREGG. The Senator from Georgia leads in the way I want to close this discussion. There are ways to do what the Senator from Georgia is suggesting. There are ways to reduce the cost of health care in this country and to make it better. Let's take, for example, malpractice reform, abusive lawsuit reform. None of that is in the Finance Committee bill. We should have something there. The President says he is for it. We should do something in that area. CBO scores this as a $54 billion savings. That is not chicken feed--not in Georgia, not in New Hampshire. That is a big number. So we should have malpractice reform. We should have proposals which basically incentivize employers to have their employees with healthier lifestyles. It is called HIPAA reform. That is not in the Finance Committee. It is very easy to do. You give people the incentive and employers the ability to say to someone: If you stop smoking, if you live a healthier lifestyle by reducing your weight, if you take the tests you need to take in the area of better health care, such as colonoscopies, we actually will give you a cash reward. We cannot do it under the Finance Committee bill and, to a lesser degree, under the Kennedy-Dodd bill or the Harkin bill but not as much as we would like. There are specific diseases we should target, such as obesity and Alzheimer's. There are a whole series of healthy lifestyles. There are things we can do in a step-by-step manner which will get us much farther down the road toward quality health care for all Americans rather than this massive expansion of health care through a massive expansion of an entitlement which will lead inevitably to, in my opinion, a huge debt being passed on to our children. Three groups are going to pay for this $1.8 trillion: One is seniors citizens who are going to pay for the cuts through Medicare; two is small businesses that are going to have to pay through massive increases in premiums for their insurance, and they will probably have to give up a lot of coverage of their people; and three is our children, who are going to have to pay the debt. I appreciate the thoughts and questions of the Senator from Georgia. They are right on point. I thank him for getting involved in this discussion. In fact, I yield the floor to him right now.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to associate myself with the comments of the Senator from Arizona on rule XXVIII and on the issue of planes. I also want to point out that we are violating the budget this body has with this bill. I understand the situation in which the Senator from Nebraska finds himself. His bill is in the wrong place at the wrong time, and people threw a lot of baggage on it, and it was inappropriate that it was thrown on. One of the most inappropriate things is a $4 billion bill that is being sent to the taxpayers of America to bail out the Postal Service. This wasn't a surprise. This didn't come on as, oh, my gosh, we don't have $4 billion to pay our pension funds. This occurs because of something that occurred in 2006, when we bailed out the post office the last time. Everybody knew it was coming. This train has been coming down the track, the track has been straight, and we have seen it for a long time. So suddenly this bailout, which the taxpayers will have to pay for, gets thrown on the Senator's bill. I regret that. It makes his bill out of whack relative to the budget. This is the last day of the fiscal year. We have already spent all the money. In fact, we spent a little bit more too, but we spent all of the money in the budget. We are over outlays and all of the BA has been spent. Suddenly, out of the clear blue sky, on the last day of the budget, we are going to spend another $4 billion. We passed the budget, so let's stick with the budget. That is the idea. I think the American people are getting tired of us spending money we don't have, especially since it is theirs and their grandchildren's. It goes right on the debt, by the way. All I am asking this body to do is live by the budget we passed. I intend to make a point of order under rule 311 of the Budget Act, which says you cannot exceed what you said you budgeted for. It is a simple Budget Act. We pass a budget, and if you go over it, there is a point of order that you should not waive. So we should not spend $4 billion we don't have. Again, this was not the doing of the Senator from Nebraska. He plays no role in this other than being the unfortunate baggage car passing through Congress when somebody decided to stick this on his bill. At this point, I will make a point of order that the pending conference report would cause the aggregate level of the budget authority and the outlays for fiscal year 2009 as set out in the most recently agreed to concurrent resolution on the budget, S. Con. Res. 13, to be exceeded. I raise a point of order under section 311(a)(2) of the Congressional Budget Act of 1974.

Mr. GREGG. Mr. President, I will simply note that there were two other Budget Act points of order against this item in the bill. I presume he is asking on behalf of leadership to waive them all. It is really inappropriate that we should waive the whole Budget Act and spend $4 billion we don't have on the last day of the fiscal year. So I hope Members will look at this. This can be corrected in other ways. We can find ways to offset this money. It can be done on another bill with the proper offsets. Therefore, I hope my colleagues will sustain what they passed, which was the budget for this year, on the last day of the budget enforcement for the year. I yield the floor.

Mr. GREGG. Mr. President, this is a very simple point of order. It simply says: A budget was passed. This is the last year of the budget. We have spent all the money under the budget. We should not add another $4 billion to the budget that is going to go directly to the debt our children will have to bear. So let's vote in favor of supporting the budget that we passed. Let's vote against adding $4 billion of more debt to our childrens' backs. We can correct the problem this issue confronts without adding to the deficit and the debt, and we can correct it without doing violence to the budget which was passed by the majority.

Mr. GREGG. Mr. President, how much time remains?

Mr. GREGG. How much time do I have remaining?

Mr. GREGG. Mr. President, if it had no budget impact, the point of order would not lie. It actually does have a $4 billion budget impact. That will be added to the debt. It can be corrected. We can still pass the continuing resolution by supporting this point of order. I ask Senators to vote no on the motion to waive.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to pay tribute to a special person, U.S. Army SPC Justin Pellerin of Concord, NH, for his service and supreme sacrifice for our Nation. Tragically, on August 20, 2009, this courageous young soldier, only 21 years of age, gave his last full measure of devotion when an explosive device detonated near his vehicle in Wardak Province, Afghanistan. At the time of the incident, Specialist Pellerin was serving as an infantryman assigned to the 2nd Battalion, 87th Infantry Regiment, 3rd Brigade Combat Team, 10th Mountain Division based at Fort Drum, NY. Justin joined the U.S. Army in June 2007 after graduating from Concord High School and deployed in January in support of Operation Enduring Freedom. This decorated patriot is the recipient of the National Defense Service Medal, Afghanistan Campaign Medal, Global War on Terrorism Service Medal, Army Service Ribbon, NATO Service Medal, and most recently, the Purple Heart and Bronze Star. Heroes from the State of New Hampshire have served our Nation with honor and distinction from Bunker Hill to Afghanistan. Undoubtedly, Justin has advanced that fine tradition. Daniel Webster said: ``God grants liberty only to those who love it, and are always ready to guard and defend it.'' Justin chose to serve our Nation, guard our precious liberties, and answer the call of freedom. Our debt of gratitude will never be fully repaid to Justin or his loved ones. The sudden death of a young person is especially difficult for family and friends. In November 1864, President Abraham Lincoln was informed by the War Department of a mother who had lost five sons in the Civil War. He wrote the mother: ``I feel how weak and fruitless must be any word of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering you the consolation that may be found in the thanks of the Republic they died to save.'' My heartfelt sympathy, condolences, and prayers go out to Justin's wife Chelsey; his parents Dale and Melissa, and family and friends. The death of Justin, on a battlefield far from New Hampshire, is a true loss for our State and Nation, and a grievous pain for those who knew him best and loved him most. Although he will be sorely missed by all, it is my hope that his family and friends may find some comfort in knowing that Justin's devotion, sense of duty, and selfless dedication have made the safety and liberty of each and every American more secure. May God bless SPC Justin Pellerin.

Mr. GREGG

Mr. GREGG. Let me first congratulate the Senator from Tennessee for bringing this matter to the attention of the Senate because if there were ever a shell game being played on the American people, this is it. The administration has alleged they are going to save $87 billion. Then they have gone out with great zeal and enthusiasm and spent every cent of it--spent every cent of it. It turns out there is not $87 billion saved. CBO, when it looks at this and does so in a forthright way, using standard accounting procedures which we would use in most instances, determines the savings are closer to $47 billion.

Mr. GREGG. That is correct. But they are subject to very arcane rules. They came up with the $87 billion using the arcane rules. I asked them to look at this in an honest way, using standard accounting rules, the same rules used by the Congressional Budget Office for other credit events. They concluded that if we use those and were able to use those and were not bound by the arcane score-keeping rules--it is not their fault, they are bound by law to use a different standard here-- the real savings is $47 billion. That is what they said. They said that using the proper accounting methods for looking at this, the true savings is $47 billion, which, of course, begs the question of, what are you going to use that for? They are going to spend $87 billion, so actually they are going to run up a deficit on this whole exercise of a lot of money on the taxpayers in the claim that they are saving money.

Mr. GREGG. The Senator is going to the essence of what really drove this decision. This is not a decision about saving money, this is a decision about spending money. That may seem counterintuitive, but what you have to understand is that if the administration could get a score from CBO that says they are going to save $87 billion or they are going to save $47 billion, then they get to spend that money. So no money is being saved--none. The money is being spent on different programs. What should have happened here, if they were going to have integrity about their proposals, is exactly what the Senator from Tennessee is basically suggesting, which is the whole $87 billion should have been saved. It should not have been spent, it should have been saved and added to reduce the debt. There is no reason the government should be making $47 billion off our students any more than they should be making $87 billion off our students, if they are going to go solely to a Federal direct loan program.

Mr. GREGG. The Senator from Tennessee is absolutely right. It truly is a cynical act because basically they are claiming savings when they are actually creating a capacity to spend more money, which they spend. This is Washington-speak at its worst. It reflects the attitude, really, of this administration, which is that they are not interested in controlling spending or reducing the debt. When they find $87 billion, which they claim they have--they actually only have $47 billion--they want to spend it as soon as they can, and they have. This spending has already occurred even though the program has not been put in place to save this money. They have already outlined how they are going to put this money out the door, not using it to reduce the debt. But the Senator from Tennessee is right on a second point too. It should have been zero. In other words, there is no reason, if you are going to take this course of action and you are going to maintain intellectual integrity, that there should be any money being spent here. The full $47 billion should flow to the benefit of the students.

Mr. GREGG. No one is more expert in this area than the Senator from Tennessee, having served as one of the leading Governors on the issue of education when he was Governor of Tennessee and then going on to be the Secretary of Education. He understands how the Department of Education works. I certainly subscribe to his view. It does not smell right. Clearly, if they are going to increase their activities by this size, they are going to have a massive increase in cost. Another question on which I would be interested in the thoughts of the Senator from Tennessee is, what happens to the students? I know some people get a little frustrated just trying to get their driver's licenses renewed in this country. Can you imagine having to go find the Department of Education and getting a student loan from that Department? I would be interested to get the Senator's thoughts on what kind of nightmare that is going to be for our students.

Mr. GREGG. I think the Senator from Tennessee has hit one of the core issues here, independent of the fact that this is just a scam to create more room to spend more money to spend on other programs, and it is scamming the students by hitting them with $47 billion of interest payments which they should not have to pay if this is followed. But the Senator has raised another valuable question here, which is obviously students were reasonably comfortable with the system the way it worked because 75 percent of the students had opted to pursue the private sector loan process. Granted it was a little more expensive for them-- not dramatically by student; obviously cumulatively it was, but not dramatically by student. But I think they took that option because it was so much more convenient. In our society, which is reasonably capitalistic--but becoming less so under this administration; obviously we are moving down the road toward a Socialist state--but independent of that, people often pay a little more for the convenience of it, for the convenience of having an efficiently delivered loan, for the convenience of knowing whom to talk to when you have a problem, for the convenience of basically being able to go get answers quickly to your questions. Essentially, that is what these higher education authorities created in every State. Tennessee has one. New Hampshire has one. They are really good people. They are, for the most part, except for their executive director, volunteers. Their purpose is to make sure students have very prompt access to student loans which are significant enough for them to pay for their education and that it is also done in a way that is convenient so they do not have to end up just getting lost in a massive bureaucracy. I suspect every congressional office is going to have to become a massive clearinghouse for student loan problems. We don't have that now. We have problems with a lot of programs and agencies, but student loans is not one of them. It really is a big issue of the marketplace having voted with their feet, so to say. The students in this country voted to use the guaranteed loan system, pay a little bit more for the purposes of the convenience they were being given by having that sort of easy access and substantive information right at hand, versus going to the government and getting overwhelmed by a government bureaucracy which is often indifferent to consumer issues and is difficult to deal with.

Mr. GREGG. The Senator is once again correct. There is a macro issue of economics here. Although it is tangential to the Senator's primary concern, which is the very legitimate concern of: Why are we taking all of this money from students if we are going to do this type of program? And why are we spending all of this money even before we take it in? And why are we putting students through having to stand in line like at the DMV to get a loan? There is a macro issue here, which is for the government to take over all of this debt means we are going to add $500 billion to $600 billion to the government ledger. We are now nowhere near that in the student loan area because we are not primarily responsible for the debt. As a result, you are going to have some significant crowding out. It could easily aggravate our ability to borrow money for the purposes of financing these massive deficits the President wants to run, the trillion-dollar deficits every year for the next 10 years that are in the budget. I do not think it will be a massive issue, but it will be a significant issue. It could affect the rate of interest which we have to pay as a government. It could affect other nations looking at us and saying: Do we have too much debt on our books? Most of this debt will go into a revolving fund, and hopefully it will be repaid, as it is traditionally. But the initial debt will still have to be put on the books at some point.

Mr. GREGG. Well, the $87 billion is what has been spent. That is what they are going to spend.