Judd Gregg

Mr. GREGG

Mr. GREGG. I begin by thanking the committee, the committee staff, both the majority and Democratic side, for the assistance in getting us to this point. We had a markup last Thursday which was done very professionally. A lot of issues were raised. A lot of votes were taken. We were able to complete the budget on a timely schedule pursuant to the rules of the Senate. Now we are in the Senate. As everyone knows, under the rules of the Senate, we have 50 hours on the bill. Then we have what is known as the vote-arama. The Senator from North Dakota and I have been talking. We hope we can coordinate things so that Members will be comfortable getting their amendments up and have adequate time and have certainty as to when their amendments are coming up, and in doing that, hopefully, actually reduce the vote-arama at the end. And cooperation would be helpful. Right off the bat, I thank the Senator from North Dakota and his staff. They have been extraordinarily cooperative as we moved forward throughout this process. Let me ask Members, if Members have an amendment, all on our side, tell us about it so we can get you a time slot. On the substance of the bill, the purpose of a budget, of course, is to be a blueprint for how the Government will spend its money in the coming year. The year for our Government begins on October 1, 2006. We are already into the 2006 year, so this is the budget for 2007. It is important, when we are doing a budget, of course, to be reasonably realistic about what the opportunities are, the demands are, what the needs are for saving money, what the tax structure will be in the country. We have attempted to do that in this budget. We began, basically, with the President's proposal. He sent up a budget. Ironically, under the rules of the Congress, the President's budget has no actual impact on the substance of the process. In fact, the budget of the Congress is never signed by the President. It is a document entirely within the Congress. Clearly, the President gives his thoughts and his guidelines. He is in charge of the executive branch. We take it seriously. We have looked at the President's budget and used it as a template for much of what we have done in this budget, although we have departed in a few significant ways. I congratulate the President for sending up a budget that is responsible. He controlled spending on the discretionary side and the non-Defense accounts. He did make proposals in the area of entitlement spending which were significant and which would bring about some restraint in the rate of growth, for example, of the biggest entitlement, which is Medicare and pensions, and even in the agricultural area he made some proposals. His budget is a legitimate and effective document talking about how we should, as a Government, go forward relative to the spending which we are going to undertake in the year 2007. We have, however, marked up the budget a little differently. Our purpose, honestly, my purpose is to reduce the deficit of the United States. That is critical. We have a situation facing us as a people and as a Nation which is unique in our history in that we have this large generation called the baby boom generation. It is the largest generation in our history, with 70 million people, about twice the size of any other generation. The baby boom generation is headed toward retirement. As they retire, it will put a huge strain on the operation of the fiscal house of the United States. That retirement begins in earnest in about the year 2008 and accelerates and peaks in the year 2030. At that point, we have serious issues relative to how we control our budget, and we should be focusing on those concerns. But in the short run, there are things we can do to bring the deficit under control, and we should do this. This budget attempts to do that. In fact, this budget will reduce the deficit of the United States in half over the next 4 years. That is a fairly significant step forward. As a percentage of gross national product, by the year 2010, we will actually be down to about 1 percent of gross national product, which will be well below the historical norm of deficits in this country. Our deficit in the coming year, however, will be higher, and I will get into that discussion in a few minutes, but let me go back to this entitlement question because it is important as we start the discussion that we frame it in the context of the issues that concern me the most. We have outstanding at the Federal level, as a result of the coming retirement of the baby boom generation, an obligation of the Federal Government which amounts to $65 trillion. That is trillion, with a ``T.'' It is hard to understand what a trillion is. I don't know what it is. I have heard all sorts of different explanations. I will try to put it in perspective. If you take all the taxes paid into the Federal Government since our country was founded, since we began to have taxes as a Federal Government in 1789, it represents $40 trillion. That is all taxes ever paid into the Federal Government. If we take the net worth of everyone in this country--their cars, their houses, their stock, whatever they own that is an asset, and we add it all up--the net worth of the American people is $51 trillion. That is the second blue chart. The total outstanding debt, therefore, of three major programs-- Medicare, Social Security, and Medicaid--represents $65 trillion. So it is more than what has been paid in taxes since the beginning of time, as far as this country is concerned, and it is more than the net worth of our Nation. It is a staggering figure. That is a 75-year figure. And it is all driven by the fact that this baby boom generation is so large, and when it retires it will demand so much in the way of services. What is the issue? The issue is, if we have this type of an outyear liability, we need to do things today to try to structure our house and get it under control. In the last budget cycle, for the first time in 8 years, we stepped forward as Republicans--I think we had two Democratic votes--we stepped forward as Republicans and passed what was known as the reconciliation bill to reduce entitlement spending by $39 billion over 5 years. Anyone would have thought we were scorching the earth in passing that bill from the outcry from the other side of the aisle, that all poor people, all people of need were being thrown out the door as a result of that reduction. Well, to try to put it in perspective, it was $39 billion. Actually, within that, the most significant item was the Medicaid item, which was $5 billion over 5 years, or in that period of 5 years, the Medicaid system was going to spend $1.2 trillion. So $5 billion and $1.2 trillion would have meant that Medicaid--which was going to grow at 40 percent over that 5-year period, after this scorched-earth policy which we put in place, according to the folks on the other side of the aisle--Medicaid would still grow at 40 percent over that 5-year period. We did not even move it a percentage point. We moved it a fraction of a percentage point in the rate of growth of Medicaid. But it was a difficult exercise to get that through this Congress because we got no Democratic votes--well, we got two, I am sorry. And we had to pass it here with the Vice President voting for it. Well, we are now in an election year, and the President sent up a budget which, in an almost heroic way, he said, even though it is an election year, we should address some of these entitlement accounts, with Medicare being the biggest. He suggested $35 billion in savings in Medicare over the 5-year period. Medicare will spend $2.2 billion over that period, and it would mean the rate of growth of Medicare, instead of being 38 percent, would be 35 percent. I believe those are the numbers. I am not sure of those two numbers, but I think those are the numbers. In any event, it became very clear from statements made by my colleagues on the other side of the aisle they were opposed to that. In fact, immediately--as soon as the President sent it up--they started saying Medicare was going to be slashed--of course, it was still going to grow at 35 percent--and that senior citizens would be harmed. That drumbeat immediately met it, as it did when the President suggested we should do something about Social Security. So no progress was made on that side with that, and, unfortunately, on our side of the aisle there was also a fair amount of hesitancy on that issue. I went to the chairmen of the various committees that the President suggested do these entitlement changes, and they all said they could not get the votes on their own committees to pass them out because the committees are ratioed in a way that means if you have one Republican who opposes it, you cannot pass out these types of things, and in each committee there was at least one Republican, unfortunately, who opposed it. So it became fairly clear to me, regrettably, that a major reconciliation bill this year, on the side of entitlements--because it is an election year--was not going to accomplish much other than to give people who were not willing to be constructive on the issue, and wanted to create a political issue, a sort of free shot at people who were trying to be constructive on the issues, specifically the President. So we did not put reconciliation instructions in this bill. But we still are aggressive in the accounts which we think are important and which will lead to getting us back to reducing the deficit in half. What are some of the other structures of this bill that I think are positive? Well, specifically, in the entitlement accounts--well, let me step back. In the area of discretionary spending, the President sent up a number, which was $30 billion over last year's spending. Last year, we spent about $843 billion on discretionary accounts. Now, discretionary accounts--for those of you listening who don't understand these arcane terms we use around here--discretionary accounts are for spending we do every year which we do not have to do, but we do it because it involves the necessity obligations of the Government. But it can be adjusted each year. Entitlement accounts, which I was talking about before--Medicaid, Medicare, Social Security--those accounts spend automatically. They do not adjust every year. If you meet certain conditions of income, of economic well-being, of health, of experience, you have a right to certain payments. Those are called entitlements. To control those, you have to change the law. That is why you have to have a reconciliation bill. To control spending, you have to reduce or adjust the spending in what is known as an appropriations bill as it comes through the Congress every year. So the Congress has its most significant impact on discretionary spending in that the budget can set a limit on how much money can be spent by the Federal Government under these discretionary accounts. Now, discretionary accounts would be things such as national defense, education, and laying out roads in some instances--although that is pretty much off-budget now--environmental concerns, some health care accounts. The President sent up this number, which was $30 billion above last year. Last year, we spent $843 billion. This year, the President's number was $870 billion. It was rescored by CBO to be $873 billion. So we said that is a reasonable number. We are going to hold that number. That is called the top-line discretionary cap. So all discretionary spending in the Federal Government will be held at $873 billion under this cap. What does that mean? That means, essentially, if anybody wants to come to the floor and spend more money than that, they are going to have to get 60 votes to do it because they will be violating the budget discretionary cap. That is an enforcement mechanism we have around here, and sometimes the 60 votes are here and it gets waived, but, hopefully, people will be aggressive in protecting this number. With that number, defense spending goes up, under the President's proposal, about $28 billion of the $30 billion. And social spending, or nondefense spending--not all social spending--basically is held flat. In fact, in some accounts it actually goes down. We have aligned ourselves with the President's top-line number in our bill and recognize we need to make some adjustments in the way it was allocated, although our committee does not do allocations. That is done by the Appropriations Committee. We have suggested different allocations than what the President might have used. We put, for example, an additional $1.5 billion into education. We put an additional $1.5 billion into health care. We put an additional $2 billion into border security. If we were the appropriating committee, that is what we would do. But we do not have control over this. This is entirely a decision made by the Appropriations Committee. But it is a statement of what the Budget Committee believed was a good allocation because we are required by law to allocate, but our allocations have no force of law. The only allocation that has force of law is, of course, that done by the chairman of the Appropriations Committee, Senator Cochran of Mississippi. So within the discretionary caps we have moved money around. There will be a lot of amendments that come to this floor over the next week as we debate this bill that will try to move the money around again. I would simply note that most of them will be statements of what people want but will have virtually no impact, even if they are successful in what people get because, once again, the budget does not control the allocations. The Appropriations Committee controls the allocations. Even if the cap were to be lifted, it would be entirely up to the Appropriations Committee as to where the extra money would go. But we feel strongly, or at least I feel strongly, and the Republicans on the Budget Committee--this was reported out of committee on a party-line vote, as it has been the last few years--we feel strongly that rationing, controlling, being aggressive in controlling the discretionary accounts is critical. Now, that brings me to the second topic. There is a lot of resistance to that, by the way. You would think that when you are running these types of deficits that people would be willing to be fiscally responsible around here, but, believe me, there is a lot of resistance because in general terms people are always willing to be fiscally responsible, but when they get specific, they have programs they want to see increased, which is human nature, I guess. Within the budget we have an allocation for defense. But what has happened recently--and this is an issue I have some concerns about--is that since the war on terrorism has begun, a war we did not ask for but which we are prosecuting aggressively, and I strongly support the President's efforts to fight terrorism--we have felt the need--it is an absolute need, and I do not think it is argued on either side of the aisle--to make sure we fully support our military in a way that is appropriate, and especially in a way that those men and women in the field in Afghanistan, Iraq, and other places have the things they need to fight effectively. So what has happened is we have created this new budget process around here. We have the basic budget process, which is the core, which comes under the discretionary account, which I have been talking about, the $873 billion number, of which approximately half will be defense money. That is shown in green on the chart. That is what we call the core defense budget, national defense budget. That operates the national defense system. But on top of that, as part of the warfighting effort, there has been an emergency funding bill every year now for 4 years in a row, which has been very significant. Traditionally, emergencies used to run about--we would have emergency spending in the Federal Government of about $16 billion, on the average, throughout the 1990s. They represented usually disasters that had to be dealt with. Many of them were farm disasters. Some of them were floods. Now we are seeing basically a process where emergency spending has become what I call a shadow budget, but at a minimum, it is an alternative budgeting process where you essentially have two budgets around here. You have the budget, which is fairly aggressively disciplined through points of order, many of which I have put in place, some of which were put in place with the cooperation of the Senator from North Dakota, some of which were put in place by my predecessor, Senator Nickles, and some of which were put in place by Senator Domenici, the predecessor of Senator Nickles. But budget points of order lie in order to discipline us on the floor so the core spending of the Defense Department and other discretionary accounts is reviewed. It goes to the authorizing committees. It comes out of the authorizing committees. It comes to the floor and gets reviewed. If certain things are not appropriate, in some instances a budget point of order lies against it. This second budget which we now have around here--and it is an entirely separate budget. In fact, the average amount spent annually is about $90 billion, which would run the State of New Hampshire for about 20 years--one emergency budget. So it is a pretty big budget. That budget has no controls at all. Essentially, that comes up here as an emergency. It does not go through the authorizing committee. It goes through the appropriating committee, which is very effectively led by the President pro tempore, who is now presiding. But the fact is, it does not have any of the controls that have traditionally gone with regular budgeting, and it has become basically a fact of life. We are not going to get around it. We are going to be in this war for a while. It is going to be expensive. So I feel, and there are others who feel--I think the Senator from North Dakota agrees with me on this--we have to do something to make sure there is some review of this that puts it more in the camp of being a traditional budget rather than an extraordinary emergency budget which has no discipline to it at all. So in this bill, we essentially pick a number, $90 billion. Now, historically, the White House was not sending up any number for these emergencies. In fact, in the years 2003, 2004, 2005, and 2006 they sent up zero. They assumed no emergency at all. That was a bit of gamesmanship, in my humble opinion, to be kind. Last year, we, as a Budget Committee, put in a figure of $50 billion. So this year they assumed $50 billion. And when I asked the Assistant Secretary of Defense why they put in $50 billion, they said they did not put it in. It was in there only because last year the Congress put it in, and they felt they needed to have it in there in order to reflect what the Congress wanted last year and they didn't think it had any relevance at all. That being the case, what we decided to do this year is take the average of the last 4 years and put that in as the number because I want to get a reasonably accurate number so we have some truth in budgeting. So we put in a number of $90 billion for emergencies that we are assuming, which is why--if you go back to the first chart--in our budget the deficit actually exceeds the President's deficit because the President, in his budget submission, did not have the full cost of the emergencies which we know are coming up. I believed we should have it in there, so our budget deficit is projected as higher. My hope--and I think it is a reasonable hope--is that this will not go on forever. We are, hopefully, going to start drawing down troops, in Iraq especially, soon. And the cost of that war will recede. Obviously, the cost of Katrina, which was a big part of the cost last year, is already in place. That is pretty well spent out, or has been put in place--over $100 billion for the Gulf States. So, hopefully, this number will come down. But we are assuming next year, to the extent it comes down, it will be about $90 billion. In that $90 billion we are assuming a budget deficit that is about $40 billion higher than the President's, based on the additional money we put in for the emergencies. Now, in order to put a little discipline into this exercise, we also put in a new point of order. I want to be very forthright about this. If we go over that $90 billion, there will be a point of order that will be put in against emergencies. They really should not be called emergencies because they are known commodities that are coming up here. They should be called extra budgeting for the war on terrorism. What we have done is put in a point of order which says if you go over the $90 billion, there has to be a more serious justification of why that money is spent, considering the average is $90 billion over the last 5 years, and it can be raised with a 60-vote point of order to try to get that discussion going around here. It is a minor attempt-- not a very big one--to try to put some discipline into this exercise. In addition, because of the fact that I still believe entitlements are the biggest issue the Federal Government has to face and recognizing that I was not successful in convincing my colleagues to do reconciliation this year, if you look at this chart, you will see the cost of entitlements going through the roof, especially Medicare. If you take Medicare, Medicaid, and Social Security and combine them, we will spend more in 2030 than we spend today on the entire Federal Government. They keep going up. Basically we would have to radically increase taxes on working Americans beginning in about 2015 and ratchet up dramatically by the year 2030 to remain solvent, well over historical norms, if we are not going to do something about entitlements before then. In order to address that, I have asked for a new point of order. I didn't ask for it. This idea came from Mr. Leavitt, the Secretary of Health and Human Services. He suggested we put in place a tree which essentially says that if Medicare, which is supposed to be an insurance program, everybody goes to work and they get a Medicare insurance tax, it is supposed to accumulate and you are supposed to be able to pay for your retirement health care through the insurance tax. Parts of Medicare don't have the insurance. Part B, Part D are a little different, but the basic Part A is supposed to be fully insured by then. If the Medicare accounts dip into the general fund--and they shouldn't be dipping into the general fund at all--for more than 45 percent of the cost of Medicare so they are basically not an insurance account anymore, they are basically a general fund account, which means that the general taxpayer is paying them twice--they are paying at the workplace, and then they are paying them out of the general fund--then at that point, if the Medicare trustees tell us that is going to happen for 2 years in a row, it is going to be more than 45 percent in 1 year and more than 45 percent the next year, then a point of order arises which says we need 60 votes to spend money on these entitlements, new money. The idea is to simply generate the discussion necessary to get some constructive activity around here on the issue of how we control spending in light of projected deficits caused by the baby boom generation retirement. There is going to be a lot of discussion today about tax policy. It is important to understand our view of tax policy. Obviously, there are two ways you address the deficit. You address it through spending and through revenues. I take the basic view that we are not an undertaxed society. I think Americans pay a lot of taxes. Whether they get what they deserve for what they pay in taxes, I am not so sure, but they certainly pay a lot of taxes. We will see charts from the other side of the aisle--I can't count how many times I have seen these charts, but we will see charts coming from the other side of the aisle which will say that revenues have dropped precipitously since President Clinton was President and that they have only started to recover incrementally in the last few years. The representation will be made that the majority of this drop is a function of cutting taxes which was put in place by President Bush in the first 2 years of his Presidency. Let me say that I disagree with that representation. We were in the biggest bubble in the history of the world. It was a bigger bubble than the tulip bubble, bigger than the south seas bubble. It was the Internet bubble of the 1990s when people were speculating and creating paper money without anything behind it through speculation on stocks relative to Internet assets. That bubble generated tremendous revenues as people sold stock and bought stock. But when it collapsed, which it inevitably would and did--and interestingly enough, there is a great history of these bubbles, all these bubbles collapsed, and they were all driven by the same philosophy: Somebody had the belief that the basic economics had changed and something had been invented which was going to circumvent the business cycle and there would be no more business cycles. It is a concept which people believed in in the late 1990s. They generally believed that the technology advantages were going to cause us to expand revenues that would allow them to invest and speculate at rates which were massive and historical proportions never seen before. When that bubble collapsed, it generated a recession which obviously contracted Federal revenues. On top of that recession, we had the attack of 9/11 which generated even a larger recession. The economic damage done by 9/11 was massive. The reallocation of resources that had to occur, the basic grinding to a halt and hiatus taken relative to investment for a while as a result of Wall Street being in chaos for a period of time, all of this led to an even more severe recession or potentially more severe. However, prior to that event, the President had put in his first tax cut. Then after that event, he put in the second tax cut. Those two tax cuts together were the perfect relief, the perfect formula for basically curing a recession and making it a more shallow recession than one might have expected. We are fortunate that we didn't actually fall into a deep and severe recession during that period. The primary reason we did not was because of the tax cuts. Another factor of these tax cuts was that they were oriented toward the productive side of our economy so that they created an incentive for entrepreneurs to invest. As a result of that investment, they created an incentive for people to generate economic activity. What comes from that? Jobs. We have had a massive economic expansion in jobs. We have had a massive expansion as a result of the incentives created in the tax law. Another thing was created by that. When people have more jobs, when there is more economic activity, we get more revenue. This chart reflects that dramatically. We see revenues jumping here. In fact, in 2005, we had the largest increase in revenues in our history. If you go before 2005, you will see revenues coming up. But they are coming up dramatically, 6 percent, 7 percent. About an average of 6.5 percent is the projected revenue increase. It is a function of the fact that we have in place incentives today such as the capital gains and dividends rates that basically create an atmosphere where people are willing to go out and invest. As a result of those investments, they generate capital activity, which creates jobs, which creates taxable events and creates income to the Federal Government. In fact, as we can see from this chart, the historical level of receipts for the country is about 18.4 percent of gross national product. Yes, we dropped down dramatically, but now we are seeing that line come up dramatically. We will reach a historical level of revenues fairly soon--if not next year, certainly the year after--and receipts will be back to what they should be as a percentage of gross national product because we will have put in place an economic engine to generate revenues, called a tax code, which creates an incentive for people to be productive and take risks and create jobs. That is what we wanted. The other side is going to hold up chart after chart which says, the tax cut was this big for this group, this big for this group, implying that what they want to do is raise those taxes. We don't happen to think raising taxes is the way you keep this economic activity going. We think the way you keep the economic activity going is to continue to drive the incentive for people to invest, take risk and, as a result, create jobs which creates economic activity and basically creates revenues. Another thing this chart shows that I believe is true is that you can't close this gap between expenditures and receipts on the revenue side unless you are willing to significantly increase the historic tax burden on the American people. You can't do it. You have to address the spending side of the ledger. You have to be willing to slow the rate of growth on discretionary accounts and hopefully soon on the entitlement accounts of the Federal Government, but you can't get there on the revenue side. And you certainly can't get there on the revenue side once the baby boom generation starts to retire because the numbers are too staggering. You would basically tax the young people, the working Americans, out of an existence, out of the capacity to have an existence of a high quality of life which we should be passing on to them, not taking from them, by creating a burden that is so high in the Federal Government that they can't afford it. So the issue is, generate revenues but don't do it by raising taxes. Generate revenues by creating an atmosphere where people are willing to take risk, be entrepreneurs, create jobs and, as a result, create economic activity. We have a fundamental disagreement between the two sides of the aisle. That has been obvious for a long time. If you listened to Senator Kerry when he ran for President, the theme of his campaign was: If we hadn't had those tax cuts, things would be great in this country. I take the opposite view. The tax cuts were what gave us less of a recession and what is giving us a recovery which is continuous and has created jobs. I think the last job numbers were something like 243,000 new jobs, which is staggering, or a drop in unemployment claims or something. It was a huge number. We are seeing an economic continuation of economic activity which has been historic in its robustness and continuation. It is a function of the fact that we now have a tax code which to some degree--it isn't a great tax code--addresses what generates revenue which is that you give people an incentive to go out there and be risk takers and create jobs. On another issue of revenue where the Senator from North Dakota and I do agree--and we have accepted language which he suggested or we are going to before we finish--we believe strongly there are a lot of taxes which should be paid the Federal Government that are not being paid. We had testimony on this before our committee. I am not talking about drug money; I am talking about people underreporting. The Senator from North Dakota has been aggressive in pointing this out, and correctly so. We can collect more money. We don't get the score for that, unfortunately. Even though we are going to increase significantly the amount of money that will flow to the general revenue services for the purposes of audits--and they tell us that is going to generate between 10 and 40, maybe even $50 billion of revenue we are not getting today--we don't get the score for that. CBO won't score it. Still it is what we should do. So on the revenue side we are going to do that. That brings me to my conclusion so that we can hear from the Senator from North Dakota. We have an obligation to do a budget. We as a nation should not go forward without a budget in place; it is not appropriate to running a fiscal house. A lot of people can disagree with this budget--and just about everybody who comes up to me seems to--but the fact is, it is a budget which has made decisions. You can disagree or agree with them. Over the next 50 hours you can offer amendments to try and change it. But at the end of the day, a government that is spending $2.8 trillion needs to have some guideposts as to how it will be spent. There needs to be a blueprint. There needs to be definition. Every American who runs a household works off a budget, and it would be totally irresponsible if we did not have a budget. I hope the other side of the aisle will offer a budget as their alternative. There have been some rumblings that they may. In committee they offered a series of amendments which would have significantly raised spending and significantly raised taxes. If that is their budget, fine. But put a budget on the table. We have put our budget on the table. We think it is reasonable. There are things I would have done. I would have gone further in accounts if I had had the ability to pull it off. But independent of that, this budget is a responsible budget. It addresses spending in a responsible way, and it puts in place enforcement mechanisms which allow us as a Congress to put at least warning signs in the road when we start to get off the road of fiscal responsibility. I yield the floor and appreciate the courtesy of the Senator.

Mr. GREGG

Mr. GREGG. I move to reconsider the vote.

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

Mr. GREGG

Mr. GREGG. Mr. President, I suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Mr. President, as we worked through the Budget last year, one of the main dilemmas confronting us as a government was clearly the unsustainably high levels of entitlement spending now and in the future. This spending in the not too distant future will crowd out the Government's ability to do much more than merely pay the costs of the entitlement programs themselves. Eventually, it will rob us of the ability to fund most essential discretionary Federal programs. So layering on new payments and programs, which claimants in time will come to expect as another entitlement from the Federal Government rather than the private sector, will threaten the Nation's economy with even more damage from too much Government borrowing and high tax burdens. I, too, am concerned about the immense hardship that the asbestos litigation explosion has imposed on our economy for more than a decade now. The immense volume of litigation from occupational exposure to asbestos has already bankrupted numerous companies, large and small. The greatest harm from the litigation is that genuinely and critically sick individuals cannot get their day in court--and the financial help they desperately need--because the court system is overwhelmed by asbestos claims from tens of thousands of individuals who are not even sick yet, and may never be sick. Moreover, a disproportionate amount of victim compensation is being siphoned off in attorney fees. Congress needs to address this crisis so that those who are truly sick from asbestos exposure are quickly and fully compensated. Yet our national economy also needs to be protected from further damage due to these thousands of protracted, unnecessary, and unfounded asbestos claims in our courts. But as part of that effort, we also need to ensure that the costs of compensating asbestos victims are not shifted off of the companies that would be legally liable in court and onto America's taxpayers. I therefore hope the Senator, who is one of the authors of the bill, will allow me to ask him a few questions to clarify the legislative intent behind the bill we have before us and the degree of confidence he has that the trust fund established by the FAIR Act will be funded from nontaxpayer sources for the life of the fund, as required by the budget resolution for fiscal year 2006. This past August CBO estimated that paying claims as provided for under this legislation would cost between $120 and $150 billion. CBO also estimated that the trust fund would incur an additional $10 billion in administrative and interest costs. CBO's total estimate for the bill then was that it would cost between $130 billion and $160 billion in order to meet the obligations of the trust fund over its 50- year life. Then in a letter on December 19 to the Senator as chairman of Judiciary Committee, CBO elaborated on its earlier estimate for S. 852 and its ability to stay within the $140 billion provided for under the bill by stating: There is a significant likelihood that the fund's revenues would fall short of the amount needed to pay valid claims, debt service, and administrative costs. There is also some likelihood that the fund's revenues would be sufficient to meet those needs. The final outcome cannot be predicted with great certainty [over 50 years]. Given the uncertainty of this statement, I have been concerned that the fund could rapidly run up a deficit and that the taxpayers would then be asked to bail the asbestos trust fund out. The clear track record of Government administered compensation programs designed to mandate a ``no-fault'' solution for liability claimants as in this case--has been that Congress ends up bailing out such funds' exploding costs with tax dollars. The Government Accountability Office, GAO, released a report just this past November that found that four victim compensation programs--the Black Lung Program, the Vaccine Injury Compensation Program, the Energy Employees Occupational Illness Compensation Program, and the Radiation Exposure Compensation Program--all expanded significantly over time after their creation to include additional categories of victims, to cover more medical conditions, or to provide significant additional benefits. GAO also found that those new and added costs ended up being paid by the taxpayers even if the victim compensation programs started out as privately funded. So, again, while I strongly agree--as most everyone does--that the asbestos litigation crisis needs to be solved, it is unfair to do it by making hard working American taxpayers pay the tens of billions of dollars in additional compensation instead of the private companies responsible for the problem. So, I would ask the senior Senator from Pennsylvania and the manager of the bill, what assurances can he provide--beyond the uncertain and not entirely inspiring CBO estimate regarding this bill--that the taxpayers will not end up footing the bill for this program, and that the new asbestos trust fund will not increase the Federal Government's budget deficit over the 2006-2056 period, as required by section 307 of the budget resolution for fiscal year 2006, the so-called reserve fund.

Mr. GREGG. I appreciate my colleague's willingness to clarify this important point. I would note the Congressional Budget Office yesterday released an estimate of the chairman's substitute on the asbestos trust fund bill, consistent with what the chairman just said, which states: . . . so long as the fund's administrator does not borrow amounts beyond the means of the fund to repay (as the bill would require), the government's general funds would not be used to pay asbestos claims. Furthermore, section 406 of the bill states that the legislation would not obligate the federal government to pay any part of an award under the bill if amounts in the asbestos fund are inadequate. Thus, CBO concludes that the legislation would be deficit- neutral over the life of the fund. So given Chairman Specter's assurances and this conclusion by CBO; it is my intention to adjust the Judiciary Committee's 302(a) allocation to the extent that such legislation would not increase the deficit for the life of the fund--which brings me to my second concern. There is no argument that the genesis of this crisis was fueled primarily by the aggressive and abusive tactics of trial lawyers. I think you will agree that those same trial lawyers should not now gain a windfall from this legislation. However, they should be compensated fairly and adequately for their work on any claim on behalf of injured victims. Under this bill, an attorney may not receive more than 5 percent of a final award made under the trust fund. This is more than generous compensation for filing a claim under a no-fault compensation system where no litigation cost will be incurred and which for the most part will only involve filling out forms for clients. Under the tiered compensation scheme using set medical criteria and awards for multiple levels of asbestos-related injury, awards to claimants will range from $25,000 for level II claimants, with a so- called ``mixed disease with impairment'', to $1.1 million for mesothelioma victims in level IX. At a 5 percent fee, attorneys who merely prepare forms in order to file a claim on behalf of a client can receive between $1,250 and $55,000. This is very generous compensation for merely filling out paperwork. Does the Senator foresee any circumstances under which the 5 percent limit on attorney fees could be increased?

Mr. GREGG. Mr. President, section 307 of H. Con. Res. 95, the Concurrent Resolution on the Budget for Fiscal Year 2006, permits the chairman of the Senate Budget Committee to make adjustments to the allocations and aggregates provided certain conditions are met relating to Asbestos Injury Trust Fund legislation. Pursuant to sections 307, I hereby submit the following revisions to H. Con. Res. 95. I ask unanimous consent they be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I wish to speak a little bit about the status of the points of order that have been discussed, at least in the media, relative to this bill, that arise from the Budget Act. There are four potential issues here. One, we have not seen the final language, so many of these have not been resolved as to their applicability. Talking about the one which has received a significant amount of attention, there is a reserve fund that was created in the last budget, the purpose of which was to allow this bill to come forward. The reserve fund has a series of conditions attached to it, and the effect of the reserve fund is that it sets up the ability of the budget chairman to release dollars--in this case an allocation--if those conditions have been met. As Budget chairman, I find myself in what would be called a position of a referee or a fair arbiter on this issue. I have views on this bill. I don't happen to support the bill. Those views are not relevant to the decision I need to make as chairman of the Budget Committee relative to releasing a reserve fund. The key issue on the reserve fund is whether at some point in the future taxpayers will become obligated for the claims which would be made under this asbestos claims bill. How do I come to a conclusion as to whether taxpayers would be obligated in my role as a fair arbiter or referee? Basically, I turn to our professional, nonpartisan, fair whistle caller, sort of like the referee on the football field on an instant replay going up to the guys in the stands who just viewed the play and get their opinion. That group is the CBO, the Congressional Budget Office. They take a look at the bill, and they score whether the bill is fully paid for. If it is not fully paid for, then it is arguable, of course, the taxpayers may end up picking up some of the bill in the outyears, which would undermine the purposes of the reserve fund. The initial response from CBO, which was sent to the chairman of the committee, Chairman Specter, essentially said they don't know. They estimate the potential income to the fund is about $140 billion. That is the number talked about around here. The potential administrative cost of the fund is about $10 billion, but they are not sure whether the claims will exceed $130 billion. If they exceed $130 billion, theoretically taxpayers might become liable; if not, the taxpayers would not become liable. So they essentially said they don't know. Since they are dealing with outyear numbers, it is, to some degree, guesswork. We have not seen the final product, but the final product was delivered to CBO last night. They are now rescoring it. I don't know what they are going to say. They may come back and say, yes, it is clearly outside the revenues and, therefore, taxpayers may end up with it. They may come back and say, no, clearly it is not the final version. Or, again, they might say they really can't tell. Again, as referee, I have to look at this information and make a decision. My inclination is that if there is no clear one-way-or-the- other call from CBO, that it either, A, is under, in which case clearly we would release, or B, it is over, in which case we clearly would not release. If they are, rather, of the opinion this is too far out and too difficult to call and are dealing in a range of $10 billion, which they were in their first letter, then it would probably be unfair--to stop this bill on that point of order--to the bill, to the manager, and to the people who believe they have a right to get a fair hearing on this bill. But that final decision has not been made. There are three other points of order, however, that lie whether or not this point of order is made ripe. Those three other points of order are still potentially there. There has been representation that these points of order are technical. They are not. At least one of them certainly is not because it was put in place to address the issue of one Congress binding later Congresses to major programmatic activity. We will address those as we go down the road. However, I did want to update people generally on where this specific point of order relative to the reserve fund lies because there has been a lot of representation in the press, as occasionally happens, that has been a little bit off target. Mr. President, I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent to speak to this issue for 2 minutes.

Mr. GREGG. I just want to explain the parliamentary situation for the record. Mr. President, these last two amendments are totally outside the traditional process of reconciliation. But the practical effects of the motion to waive, which the Senator from Iowa has made on his amendments, is that neither amendment can survive conference. I think it is important to understand that reconciliation cannot include spending under this bill, and that we would be doing fundamental damage to the process were either of these amendments to survive conference. And, therefore, I support the motion on this point of order and hope we proceed the same way we have with the other points of order.

Mr. GREGG

Mr. GREGG. Mr. President, I thank the Senator from Iowa. I associate myself with the Senator's comments. I agree, as I think most Americans do if they apply common sense, and this is a little Midwestern common sense we are getting from the Senator from Iowa, as we always do, which is that the Government doesn't own this money. This money doesn't belong in Washington. This money belongs in the pockets of the taxpayers who earned it. And, yes, taxes must be paid, but they must be paid at a reasonable rate, a rate which allows people to continue with their lives, to make the investments to start a small business or to send a child to college or to buy a home or purchase a car. You cannot tax people simply because somebody in Washington has a good idea and they want to pay for it and they figure, Let's go out and take it from the people working for a living and bring it to Washington and spend it. It reflects a certain elitism and arrogance to take that position, in my opinion, basically saying to average Americans that those of us sent to Washington--and this great bureaucracy grown up in Washington--know more about how to manage your life than you do as working Americans. If you turn your money over to us, we will do a better job of managing that money than you can do. I don't agree with that. I think the Senator from Iowa made that point, an appropriate point. The point I want to reinforce is that the Senator from Iowa, as always, has done yeoman's labor to bring forward a very strong bill to extend tax cuts or tax proposals which benefit working Americans. The irony of this is that it is being attacked from the other side of the aisle with enthusiasm on the basis, essentially, as the Senator from Iowa has pointed out, that tax cuts and extending tax cuts is a bad idea; that this money should stay in Washington. But, also, the irony of this is most of the items within this bill are actually supported from the other side of the aisle, or will receive significant votes from the other side of the aisle if they are taken up separately. These are items like the alternative minimum tax patch, items like extending the R&D tax credit, items like the deduction for teachers who spend money for their classrooms so they can bring crayons or whatever they want into their classrooms. Those are items which have general support around here. If you add them all up they make up the vast majority of this tax package. Yet if you were to listen to the generalities of the language from the other side of the aisle, you would think this proposal to extend these tax cuts was an outrage, that we were somehow taking money out of Washington and transferring it to rich people across the country. That is not true at all. It is not true at all. These tax cuts, in fact, basically have the impact of giving working Americans the opportunity to take advantage of the dollars they earn and not have them taken by the Federal Government. I think equally important is the issue of the one item of tax policy which does not happen to be in the Senate bill but which is in the House bill, which is the extension of the capital gains and dividends rates, where we do get this debate or this argument that this is a tax which basically benefits wealthy Americans. To begin with, the practical effect of these proposals, the reduction in capital gains rates--or the maintenance of the capital gains rate at 15 percent and the maintenance of the dividend rate at 15 percent basically benefits the Government because the effect of those two tax rates is that it generates significant economic activity which results in more taxes coming into the Federal Treasury. You do not have to believe me on this. Just look at the numbers. The numbers are hard, they are real, and they are there. Prior to the capital gains rate going into place, the Joint Tax Committee estimated that there would be $45 billion raised from capital gains in 2003. But after the cut, it turns out there is $50 billion. That is a $5 billion change. Then in 2004 it was estimated there would be $44 billion with the capital gains rate at 15 percent. After the change in rates, the Federal Government got $60 billion. In 2005 it was estimated that with higher rates there would only be $49 billion coming in through capital gains taxes. It turns out with the lower rates the Federal Government got $75 billion. As a result of lowering the capital gains rate, the Federal Government received $47 billion we didn't expect to get. Those are Joint Tax numbers. Those are hard numbers. Those are real numbers--$47 billion. Why is that? It is very simple. It is called human nature, and human nature drives what revenues are here at the Federal Government. If you are going to have a high tax on someone when they sell their home or when they sell their business or when they sell some sort of the stock that they may have purchased a long time ago and it has appreciated in value, the odds are that person may make a decision: I don't want to pay all those taxes upon making that sale, so I am just going to hold on to that asset. As a result, they hold on to the asset and the Federal Government does not get it. There is no sale, no capital gains tax as a result of that, and the Federal Government doesn't get any income from that event. But when you lower that tax rate, as we did under the President's suggestion, a person says: Now I can adjust to this. I can make this sale and I can live with this tax rate and then I am going to take the profits from that sale and I am going to reinvest them. That creates two events that are very positive for the Federal Government and for taxpayers generally. No. 1, it is a taxable event so that money comes in. As we have seen, $60 billion came in that was not there before, or we did not expect it before because the people were making that activist decision now that the tax rates were lower. No. 2, what was money which was locked up in maybe a nonproductive economic activity is moved. By human nature it is going to be moved into something that is more productive, and that is going to generate more economic activity. Maybe somebody is going to start a small business or something with those extra dollars they now have, and that is going to create jobs. It is just basic economics that when you reinvest money like that you have the money go to a much more efficient use, which produces a more productive, more efficient economy, and therefore more jobs. So you get more tax revenues and you get more jobs out of a lower rate. This has been proven time and time again. It was proven by the Kennedy tax cuts. That was President John Kennedy. It was proven by the Reagan tax cuts, and now it has been proven by the Bush reduction in capital gains and dividends rates. Reducing those rates creates more economic incentive for people to be productive, and it actually generates more economic activity which is taxable and therefore generates more income to the Federal Treasury, and as a result $47 billion of income came in that we would not otherwise have had. I misstated, I said $60 billion before. It was $47 billion during that 3-year period we would not have gotten before--$47 billion more than was anticipated. Last year, as a result of this economic activity that was created by this engine of productivity which was generated by having lower tax rates, we saw the biggest jump in revenues, I think, or the second biggest jump in our history. We picked up literally tens of billions of dollars of income as a Federal Government that we did not expect to get. That helped reduce the deficit, and it also helped us carry on the business of the Federal Government, specifically the need to fight terrorism, invest in health care, invest in education. These tax cuts have been extraordinarily positive, and the extension of these rates is critical to maintaining that economic activity. But to get back to one point here, which is this: this package of proposals coming out of the Senate has very broad support in this body, and it is a good package in general. However, there is a single item that I happen to take reservation with, and that is the deductibility of State and local sales taxes. Why do I have concerns about that? It is not the biggest item in the package. The R&D tax is bigger, and obviously the AMT patch is bigger, but the deductibility of State and local taxes creates an atmosphere where we give to high tax States an incentive to increase their taxes because we allow the people in those States to deduct the taxes as those taxes are increased. So you are basically transferring taxing room, if you will, available assets that may be taxed from the State governments to the Federal Government, which allows those States which pursued a high tax policy to benefit and creates, actually, an incentive in those States to increase those taxes. I don't happen to be a big supporter of the deductibility of State and local taxes, but I suspect the majority of the other side is, even though they are railing against this bill. My view is a State such as New Hampshire, which doesn't have a sales or income tax and takes a very frugal approach to government, should not be penalized for that at the Federal level by turning a deduction over to other States, thus reducing Federal revenues, which encourages high-tax States--such as New York, Connecticut, Illinois, New Jersey, California--to basically raise their taxes. This comes to the irony of this bill. Even though it is being attacked profusely and aggressively by the other side, it turns out probably the majority of the Senators on the other side support deductibility of State and local taxes, sales taxes. As a matter of fact, all those high-tax States I have listed have only Democratic Members of the Senate. This bill benefits them. I would like to take a test and offer an amendment to strike that language from this bill and see whether there was strong bipartisan support for that type of language. My own view is from a tax policy standpoint it makes little sense to have it in here. In a general sense, what we are dealing with here is the economics of what happens when you give people the chance to keep more of their money. The simple fact is, what happens is that when you give people a chance to keep more of their money, they are more productive and they have a bigger incentive to go out and work and therefore they create more economic activity which in turn creates more taxable events which in turn creates more revenue for the Federal Government. We should continue tax proposals which do expand and energize the creativity of the economic entrepreneur. A key element of that is to do the capital gains and dividend extension. If we fail to do that, in my opinion, we are going to have a fairly significant negative effect on revenues coming into the Federal Government, and instead of having $47 billion revenues coming in as a result of a lower capital gains tax rate, we will probably see we actually go back to the original Joint Tax proposals or estimates, and we will lose revenue. So it is not a revenue gainer to our Government to overtax people. Although I said it in a convoluted way, it is just a summary or restatement of what the Senator from Iowa said in a very down-to-earth and commonsense way. Therefore, I congratulate the Senator from Iowa. I appreciate his bringing this bill forward and look forward to working for its passage. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I hereby submit to the Senate the budget scorekeeping report prepared by the Congressional Budget Office under section 308(b) and in aid of section 311 of the Congressional Budget Act of 1974, as amended. This report meets the requirements for Senate scorekeeping of section 5 of S. Con. Res. 32, the first concurrent resolution on the budget for 1986. This report shows the effects of congressional action on the 2006 budget through January 25, 2006. The estimates of budget authority, outlays, and revenues are consistent with the technical and economic assumptions of the 2006 concurrent resolution on the budget, H. Con. Res. 95. Pursuant to section 402 of that resolution, provisions designated as emergency requirements are exempt from enforcement of the budget resolution. As a result, the attached report excludes these amounts. The estimates show that current level spending is under the budget resolution by $14.015 billion in budget authority and by $379 million in outlays in 2006. Current level for revenues is $17.286 billion above the budget resolution in 2006. Since my last report, dated November 18, 2005, the Congress has cleared and the President has signed the following acts that changed budget authority, outlays, or revenues: Military Quality of Life and Veterans Affairs Appropriations Act, 2006, P.L. 109-114; Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006, P.L. 109-115; Valles Caldera Preservation Act of 2005, P.L. 109- 132; Naval Vessels Transfer Act of 2005, P.L. 109-134; An act to provide certain authorities to the Department of State, P.L. 109-140; Terrorism Risk Insurance Extension Act of 2005, P.L. 109-144; Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, P.L. 109-148; Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2006, P.L. 109-149; Second Higher Education Extension Act of 2005, P.L. 109-150; Employee Retirement Preservation Act, P.L. 109-151; TANF and Child Care Continuation Act of 2005, P.L. 109-161; National Defense Authorization Act for 2006, P.L. 109-163; and, United States-Bahrain Free Trade Agreement Implementation Act, P.L. 109-169.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to speak on the nomination of Judge Samuel A. Alito, Jr., to become an Associate Justice of the Supreme Court. After following the confirmation process and reviewing Judge Alito's qualifications, I am pleased to support this nomination and congratulate President Bush on another outstanding pick for our Nation's highest Court. Although there are no guarantees about how any judicial nominee will carry out his or her responsibilities once confirmed, I believe that Judge Alito will serve our country well as Justice Sandra Day O'Connor has done for almost a quarter of a century on the Supreme Court. To explain why I support the nomination of Judge Alito, let me first begin my remarks by referring to article II of the U.S. Constitution-- in particular, section 2, which states that it is up to the President to appoint individuals to our highest Court. As he pledged to the voters who elected him, President Bush has exercised his appointment powers to pick someone who firmly believes in the rule of law, the importance of protecting the rights of all Americans, and the Founding Fathers' wisdom of leaving policy decisions to the elected branches of Government. The President has followed through on his promise to the American people by choosing Judge Alito. With that said, Judge Alito is not simply the fulfillment of a campaign promise--he is also one of the sharpest legal minds in the Federal appellate ranks and a dedicated public servant. A former editor of the Yale Law Journal and Army reservist, Judge Alito has served as a law clerk for Judge Leonard Garth of the Third Circuit, an assistant U.S. attorney for New Jersey, an Assistant to the Solicitor General, Deputy Assistant Attorney General in the Department of Justice's Office of Legal Counsel, and the U.S. attorney for New Jersey. After his first 15 years of public service, he then went on to serve as a judge on the Third Circuit, for which he was unanimously confirmed by the Senate in 1990. In total, Judge Alito has served our Nation for 30 years, using his legal experience and talents for public good rather than for personal profit. We should all applaud and support such a record of public service, especially when you consider the fact that Judge Alito has more judicial experience than any Supreme Court nominee in over 70 years. Unfortunately, however, there are a number of my colleagues from across the aisle who somehow believe that this record of public service is something to deride and distort. Forget the fact that nearly everyone who has worked with Judge Alito or has taken an impartial review of this man's record and credentials, such as the American Bar Association, supports this nomination wholeheartedly. Forget the fact that Judge Alito has garnered the near unanimous support of his colleagues on the Third Circuit and lawmakers from both parties-- including Governor Ed Rendell of Pennsylvania--who know him best. Forget the fact that Judge Alito has ruled in favor of minorities who have alleged racial discrimination or were convicted of crimes. Forget that Judge Alito is known by those who have worked with him as a good and decent man who does not put ideology over public responsibility. Some of my colleagues do not want to consider any of these facts, or they somehow distort all of them as they try to smear the President's nominee. And why? Well, because Judge Alito is simply that; he is President Bush's nominee. As someone who supported both of President Clinton's nominations to the Supreme Court, I find this type of partisanship appalling. Instead of accepting the obvious fact that Judge Alito is more than well qualified to serve on the Supreme Court, some of my colleagues want to cherry-pick and distort a few opinions out of the hundreds that he has written, hype up his alleged relationship with a university organization, or huff and puff about the Vanguard recusal matter even though the American Bar Association and most well regarded legal ethics experts have found nothing unethical. As opposed to qualifications, some of my colleagues across the aisle want to focus solely on these petty matters that are borne simply out of personal vendetta or the echo chamber of liberal blogs. They now want the Senate and the American people to forget everything else and base this important vote on a few dubious claims. None of this is healthy for the Senate or for our Nation. It does not take a genius to realize that most Americans are tired of this petty partisanship, and the personal attacks on Judge Alito and the distortion of his record will only further discourage, not encourage, future nominees who have lengthy records of public service and judicial experience. This is troubling, and I hope that the previous few months are not more evidence of a trend towards partisanship at all costs. Whether some may like it or not, President Bush was elected by the American people. His nominees therefore deserve fair and dignified consideration by the Senate, even by those who opposed the President's election or his views on certain issues. Perhaps these past few months should not have been a surprise to people like me who believe that the Senate should not let politics or ideology stand in the way of qualified nominees. After all, maybe all of this was foreseen by the Founding Fathers when they established the nomination process in article II, section 2 of the Constitution and gave the Senate only a limited advice and consent role. As Edmund Randolph noted, ``Appointments by the Legislatures have generally resulted from cabal, from personal regard, or some other consideration than a title derived from the proper qualifications.'' Looking at how some of my colleagues have approached the nomination of Judge Alito, I believe that Mr. Randolph, sadly, may have been right when he said this more than 200 years ago. Fortunately, there are a greater number of colleagues here in the Senate who do view the issue of judicial nominations as being about qualifications, not politics. They include the majority leader and the chairman of the Judiciary Committee, who have both done a commendable job of moving this nomination forward and giving us the opportunity to have an up-or-down vote. I congratulate them on their efforts and look forward to casting my vote in support of Judge Alito. He certainly deserves it, as well as the support of the rest of the Senate.

Mr. GREGG

Mr. GREGG. I suggest that is a good approach. ty8rd-party payors

Mr. GREGG. Mr. President, the Chair is about to rule on the points of order which were just offered, is that correct?

Mr. GREGG. Will the Senator yield?

Mr. GREGG. Basically, if I may continue, we would be dealing with three points of order as being well taken if they are put to the Chair?

Mr. GREGG. I ask unanimous consent that as we debate the issue of points of order, which the Senator from North Dakota is going to make, we have 4 minutes on both sides.

Mr. GREGG. Not at this time is the question.

Mr. GREGG. Mr. President, the Democratic leader on the bill has every right to make a point of order. Clearly, the Chair will rule they are well taken. Let's talk about the substance quickly. They are essentially technical points of order. Two deal with reports and the other with an issue of liability which is very narrow, dealing with what people are told when they come into an emergency room. Essentially, the practical effect of doing these technical attacks on this bill will be that the bill must go back to the House of Representatives and the House of Representatives is going to agree and knock that language out. But the House is not here. So what is the real practical effect of this? It is that the Katrina money in this bill will not be spent. The TANF Program, the welfare program, will lapse. The Medicare physicians payments increase, which basically makes Medicare physicians whole, will not occur. Transitional medical assistance for families who worked their way off welfare will be lost. And the therapy caps for seniors who suffer strokes will be lost during this interim period. Why would we want to do that simply to go through a technical exercise? It makes no sense at all, other than the fact that the other side of the aisle wants to delay the process. But in the process of delaying for purely technical reasons--I mean, two reports are being challenged. We get thousands of reports in this institution. To delay the Katrina benefits for the people in the gulf coast region who have suffered is outrageous, over two reports. To potentially stop welfare payments for up to a month because the House cannot get back here is outrageous, over two reports. To stop transitional medical assistance is outrageous, over two reports. To say nothing of the other reports. I realize if we don't enact this bill by the end of this year, there are $18 billion worth of subsidies that are going to flow to corporate lenders which are totally inappropriate, which the HELP Committee has said we have to stop. But those subsidies will go to those lenders. The money will potentially be lost, and that money that was going to be used to reduce debt and give students more loans will be lost, potentially, unless we get this bill done by the end of the year. We have serious issues that have to be addressed. They should not be tied up over technicalities. That is what these points of order are about.

Mr. GREGG. Yes.

Mr. GREGG. Mr. President, I move to waive section 313 of the Congressional Budget Act for consideration of sections 5001(b)(3), 5001(b)(4), and the relevant sections of 6043 of the conference report to accompany S. 1932. I understand the Chair is going to rule that the fourth point of order relative to foster care is not well taken. I ask for the yeas and nays.

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

Mr. GREGG

Mr. GREGG. Madam President, I rise to praise the Senator from Alaska for bringing this bill forward. This bill has a lot of very important language in it obviously dealing with our national defense, dealing with our ability to be energy independent. But there are two items I wish to focus on because if this bill fails, if the cloture motion does not occur, they are going to be dramatically impacted. The first is the Low-Income Home Energy Assistance Program. There has been a lot of grandstanding in the Chamber over the last few months, with Members coming down here and offering proposals for how they were going to fund Low-Income Home Energy Assistance, otherwise known as LIHEAP. Most of those proposals have come forward without any offsets, have added to the deficit and, therefore, have been subject to a 60-vote point of order, and the people offering them knew they were not going to pass, but they wanted to take a position. This is the first bill that will increase LIHEAP, low-income energy assistance, and allow those people who are going to have a very tough winter to be able to pay for their energy costs. This bill has 2 billion additional dollars for low-income energy assistance in it, and it is paid for. It is done in a fiscally responsible way. Without that money, we will go back to the LIHEAP funding levels which are traditional here, and we will not be able to pick up the extra costs of LIHEAP, which is low-income energy assistance, which is a function of increased oil costs--a very serious problem for a lot of low income people who are trying to figure out how they are going to be able to heat their homes this winter. So if this bill goes down under the cloture motion, we lose the LIHEAP dollars, and all those folks who have come to the Chamber and claimed they were for LIHEAP will have to explain that. Secondly, this bill has in it a major initiative in the area of defending our borders; $1.1 billion is put into this bill to upgrade the capabilities of the Border Patrol. The Border Patrol needs to be dramatically expanded as to personnel and detention facilities, but neither of those events can happen until the capital needs of the Border Patrol are improved so that the additional agents can be taken care of. We as a Congress have increased the number of agents by 1,500 in the last year, the number of detention beds by 1,000, but we have not addressed the capital needs. They need new helicopters, new cars, new buildings and facilities to house people. They need some issues relative to their training facilities so that we can train more border patrol. All that money is right here. Everybody who has come to this Chamber talking about the need for a better Border Patrol and better capacity to monitor who is coming into our country, well, it cannot be done without a strong Border Patrol, and this bill commits to that. I congratulate the Senator from Alaska for putting in that money. We need to get it in the pipeline. We need to get it in the pipeline now so that the Border Patrol will have the capital resources it needs to make sure they can move forward with our goal, which is to secure the border so we know who is coming across the border and the people who are coming across the border illegally are apprehended. It is a good bill. There are a lot of good proposals in this bill. But those two items--getting energy assistance money out to low-income individuals who need it, and as we head further into this winter, it is going to be critical that we have that money; and supporting the Border Patrol effort and making sure that our borders are secure through expanding the capital commitment to the Border Patrol with additional helicopters, additional housing, additional motor vehicles, and other physical activity they need down there, training facilities--are very critical elements of policy in this bill which will be lost potentially and most likely actually if this cloture motion is not agreed to. Therefore, I strongly encourage our colleagues to vote for cloture. I reserve the remainder of my time and yield it to the senior Senator from Alaska.

Mr. GREGG

Mr. GREGG. Mr. President, I submit for the Record a clarification to the conference report to accompany S. 1932, the Deficit Reduction Omnibus Reconciliation Act, to correct a clerical error in drafting in Section 11101(a)(2) regarding bankruptcy fees. The language, ``in paragraph (2) by striking `$1,000' and inserting `$2,750' '', refers to the wrong subsection of the bankruptcy code. The language should read, ``in paragraph (3) by striking `$1,000' and inserting `$2,750' ''. Any reading of the language in context would indicate this clerical error, as the numerical references in the language are illogical otherwise. We will make the technical correction at the appropriate time.