Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I yield to the Senator from Tennessee such time as he may consume or such time until the Senator from North Dakota gets here.

Mr. GREGG. Mr. President, the Senator from Oregon has made the point very well, but what is important is important to the majority, specifically, the essence of governance. You cannot govern unless you are willing to set out the principles by which you govern, especially the blueprint which is going to guide you in the governance activity. Obviously, one of the most significant things done when you are the majority party and you have the presence, you make the decisions, basic decisions as to how the country's finances will be managed and how moneys will be spent and that they will be shepherded well. These are tax dollars. People work hard. Every day people are putting in a full day's work and the Federal Government, every day, comes along and says, You worked all day long, we will take ``X'' percentage of the money you earned. We will take it right out of your pocket and we will spend it on a series of things. What is important is that the American people first know what we are going to spend it on and how we will spend it--that is where a budget comes into play--and that we be good shepherds of those dollars and use them effectively so people can retain as much money as possible in their pockets to spend on what they know is important in their lives, and the Government does not take it and spend it for them and tell them how their money should be spent, and that we function in a way we get the type of government that delivers the services that are critical to making sure we can defend ourselves and take care of the less fortunate in this Nation, make sure we have strong education, make sure we have good health systems, that we can continue as a nation to have a vibrant and a strong economy. This all starts with a budget. It is that simple. This is not the end of the product. This is the beginning of the exercise. If you do not have that blueprint in place, it makes the rest of the process extremely complicated and much more difficult. It is critical we pass this resolution. I strongly believe this resolution is a responsible effort to try to bring our fiscal house in order and to make strides in the area of controlling the rate of growth in spending so it is affordable for our taxpayers, but, more importantly, so it is affordable for the next generations who will have to pay the burden we put on the books today. It does, for the first time, take that step in the area of entitlement or mandatory spending which has become 59 percent of the Federal Government. A lot of people say, what about the appropriations bills? Appropriations bills are the discretionary side of the budget. They represent less than 30 percent of Federal spending. Half of that is defense, which we have to do today in a very aggressive way because we have been attacked and are at war and people are out there who want to harm us. I held a hearing this morning on terrorists relative to their desire to use biological and chemical weapons against us. It is very sobering, to say the least, but we have to defend ourselves and it will take a lot of money to do that. Of about 30 percent, half is defense, and the other part goes to nondefense discretionary so it is not the large part of the budget, of the appropriations bills that come through. The most significant part of the budget is the part of the entitlement accounts which never come across the Senate as individual spending items such as appropriations bills do. They simply are on automatic pilot. Absolutely the only way we can address policy effectively in mandatory accounts is through something called the reconciliation process. To quickly explain, that allows for the committees that have jurisdiction over these entitlement programs that are already in place and that have grown radically over the years to take another look at those programs and see if they are working as well as they could work. Medicaid is a classic example of a program that needs another look, where if we adjust it so Governors have more flexibility, we have a slower rate of growth in dollars, they can probably do a lot more for a lot more people if we give Governors the type of powers they need to accomplish that. Reconciliation is the only avenue for effectively doing that type of a review of the mandatory side of the ledger which represents 59 percent of Federal spending today. The reason it is the only effective way is because we all know nothing can go through this Congress--we have been shown that in the last few weeks--nothing goes through this Congress that is controversial without 60 votes. We also know any sort of mandatory change is going to be controversial. Reconciliation gives the opportunity to use a majority rather than a supermajority to review these programs and to make progress in restraining their rate of growth and making them more effective in delivering services. That is why this budget is a unique budget. It is the first budget we have a shot at passing in the last 2 years. The last 4 years we have only passed a budget twice. More importantly, since 1997, there has not been a budget which is a step forward to try to address the very critical element of where the Federal Government stands and how it spends money in the area of mandatory entitlement accounts which represent 59 percent of Federal spending. With that, I reserve our time, recognizing it is going to run against our side of the aisle, with the understanding the ranking member, Senator Conrad, will be here probably around 6 o'clock at which time I will yield the floor to Senator Conrad. I suggest the absence of a quorum with the understanding the time will run against our side.

Mr. GREGG. Mr. President, I thank the Senator from Oregon. His efforts have been immense. Quite honestly, the budget would not be on the floor and we would not have a chance if it were not for the Senator's courtesy and efforts. He had strong points and made them very effectively. As a result, we will make progress here not only on the entire budget but on what I consider to be the core element of this exercise, which is trying to get a reasonable approach to one of the major entitlement accounts. I congratulate the Senator. He has had a huge impact. The Senator knows how to get things done around here. I appreciate his courtesy to me. Mr. President, the time until Senator Conrad arrives will be charged to my account. When Senator Conrad arrives, he will take an equal amount of time to what we have used. That was the unanimous consent we entered into. After that, I ask unanimous consent time spent in quorum calls during the consideration of the bill be counted equally against both sides, the majority and the minority, for debate time.

Mr. GREGG. Our scoring of reconciliation recognizes how your response fits within the overall legislative landscape. The answer to your question is yes.

Mr. GREGG. Mr. President, we are moving toward completion of the debate on this budget resolution. I want to be recognized for a minute, then the Senator from North Dakota is going to be recognized, and then we are going to return to discuss the specifics of the resolution for a brief period of time between myself and the Senator from North Dakota, and then we are going to hear from the leaders, and then, hopefully, we will vote. But before we proceed further, and in recognition of all the work that has gone into this resolution, I want to acknowledge one person on my staff who is moving on, and she has had a tremendous commitment to the Senate for many years. That is Gayle Osterberg. Gayle has worked in the Senate for 12 years, starting out as a staff assistant in the office of Senator Don Nickles, and rising her way up to the position of communications director for, first, the HELP Committee, when I was there, and subsequently went to the Budget Committee where she has done an extraordinary job. Gayle graduated from the University of Kansas in 1992 with a degree in communications and has effectively used her talent and knowledge of the media to rise up the ladder in the Senate. While she will be missed, Gayle is moving on to greener pastures and exciting times as vice president of communications for the Motion Picture Association of America. That should be a fascinating job and one she will do very well. We will all miss her on the Senate Budget Committee. We congratulate her, however, on her extraordinary years of work and thank her very much and wish her good luck as she moves forward. In addition, I want to thank my staff. I want to begin specifically by thanking the Senator from North Dakota. His courtesy, his professionalism, his fairness in dealing with us has been extraordinary, as has his staff. And I thank his staff for their exceptional commitment to the process. The people listening to this debate over the last many hours may conclude we are quite antagonistic. Yes, we may be on some of the policy issues, but, no, we are not, at the personal and professional level. I admire very greatly the professionalism of the Senator and his staff. I also especially thank my staff. These are folks who have worked endless hours. Very few of them have gotten any sleep for the last week. And there have been other periods during the intensity of marking up and putting the budget together when very little sleep occurred. They extraordinarily and professionally put together an exceptional product, headed up by Scott Gudes on the Budget Committee and by Vas Christopoulos on my personal staff. There are a lot of people, too many names to actually mention. I deeply thank them. I know the Senate thanks them because without these folks who commit their lives to making sure the legislation that moves through this body moves through professionally and is done in a way that we can take pride in, we would not be able to function as a Congress. The American people would not be as well served as they are. I want to recognize two members of the Senate Budget committee staff who exemplify the professionalism and, especially, the esprit de corps that make our committee and this institution such a marvelous place. I know that Senator Conrad joins me in taking a moment to single out these two special individuals. Lynne Seymour and George Woodall are two of our senior professional staff members on what we call our ``non-designated staff.'' They lead our bipartisan administrative staff. Day in and day out they give 110 percent on behalf of the members and staff, whether Republican or Democrat. Lynne and George are the people who really manage the committee, who allow the rest of us on the committee payroll to formulate and execute Federal budgets, to hold hearings, to review programs and to communicate with each other and the rest of the world. They are in charge of what some in private industry call ``enabling functions.'' That is an accurate description because Lynne and George's efforts enable the rest of us to move forward the legislative business of this Senate and the Nation. After taking over as chairman of this committee a few months ago, I understood that Lynne and George work first and foremost for the United States Senate and I quickly realized that Senator Nickles had left us in good hands. Lynne and George eased the transition and ensured that we were able to move the Budget Committee's work forward. We hired and added staff. We installed work stations and moved offices. Due in no small measure to their work ethic and high morale, we were able to move forward when the President's Fiscal Year 2006 budget was transmitted a month after I became Chairman. Lynne Seymour served on the Budget Committee in the early 1980s and then rejoined us in 1995. She is responsible for all the administrative functions for the committee which, as we all know, is no mean task. Lynne is the manager for all nondesignated staff and serves as a liaison between the committee and other divisions of the Senate, such as the Secretary of Senate, Sergeant-at-Arms, Rules Committee, Ethics Committee and Architect of the Capitol. From the committee's own biennial funding to the development of a Continuity of Operations Plan, COOP, for the committee, Lynne ensures that the committee's activities run as smoothly as possible, especially through all the many transitions and office moves that have occurred over the past few years. Lynne is a dedicated individual that others know they can count on, and we all do count on her. She is a positive, graceful force for the majority and minority committee staffs, a consummate professional. George Woodall has worked on the Senate Budget Committee for the last 11 years. I have come to value his work a great deal. As the systems administrator for the Senate Budget Committee, he keeps the technology flowing and the lines of communication open. Many of us wonder how we managed before blackberries and other current technology. Well, George makes sure that the capabilities of technology do not become liabilities by keeping the PCs, fax machines, email, scanners, and networks running and keeping people connected whenever and wherever needed. Some people who work with George may not know he is also an ordained minister, actively involved in men's ministry, addictions ministry, outreach ministry and youth ministry. George's generosity and willingness to share his gifts is part of everything he does, and the Committee is better for it. The Budget Committee staff is one of the finest I have had the good fortune with which to work. Lynne and George have each given their best to Republicans and Democrats alike and have served on the committee staff for over a decade. I am privileged to recognize them and to express my gratitude. Mr. President, we all know it is our staff that somehow gets the work done during weeks such as this one where the Senate has dealt with both the highway bill and concluding a conference report on the budget resolution. As the new chairman of the Budget Committee, it was my challenge in January to get the committee up and running immediately given that we had some of the first tasks in the Senate for the year. Therefore, it was necessary to have experienced staff that could step right in and make things work. But it is not easy to have an instantly full, experienced staff, with all the bases covered. That is why I have been fortunate to be able to draw on the experience of some of the best employees in the executive branch. I would like to take a moment to recognize the brief but valuable contributions of two executive branch detailees to the Budget Committee--Elissa Konove and Mara Browne. Elissa Konove came to the Budget Committee in February to be our transportation analyst. In that role as an examiner at the Office of Management and Budget, she had followed the daily track of the highway bill over the last 2 years. When the highway bill laid over to this 109th Congress, Elissa decided to view the dance of legislation from the inside out. I very much appreciate OMB Director Bolten's willingness to share an analyst with such thorough knowledge and a steady hand. I understand Elissa is going back to fight new fires where OMB needs her most, and I know they're happy to have her back. While we will miss her expertise, we thank her for contributions, and we know the executive branch will benefit from her experience in the Congress. I also would like to recognize another valued addition to the Budget Committee staff who will be leaving us in August, Mara Browne. Mara came over to the Budget Committee from the National Oceanic and Atmospheric Administration, NOAA, where she served in the Satellite Service working on international affairs and private remote sensing issues. Mara began her Federal career as a Presidential Management Fellow and has been an asset to the committee in a number of areas, especially within the general Government function. I thank Mara for her dedication to the efforts of the committee and wish her the best of luck in her future endeavors at NOAA. Mr. President, I would also like to take a minute or two to recognize just a few of the talented professionals who have helped develop this budget resolution. First, I would like to acknowledge chairman Nussle and his very talented staff. Jim Bates, Dan Kowalski, Paul Restuccia, and their team are simply first rate and the technical accuracy of this resolution and the budget is simply a matter of personal pride. Second, I want to acknowledge my own staff here on the Budget Committee. I do not have time to recognize all of them but would like to mention a few--professionals like our legal staff, Gail Millar and Allison Parent. Our policy staff, led by Vince Ventimiglia, including Kim Monk, David Fisher, Peggy Binzer, and Richie Weiblinger. Since taking over the committee in January, I have been extremely grateful to these committee staff who have worked tirelessly on the budget, and in helping me take over as chairman. I just cannot say enough about Jim Hearn, Cheri Reidy, Dave Pappone, Dan Brandt and others. I would be remiss if I did not mention Bill Lucia who we got to come over from the HELP Committee. Bill handles education and income maintenance functions and has done such incredible analysis of pension and student loan reform. I want to thank our leadership staff for their tireless work on this resolution. I especially want to thank Sharon Soderstrom and Bill Hoagland. They have been there to assist me and the committee on issue after issue. They are true public servants. Through their knowledge, tenacity and interpersonal skills--they bring great credit to our leader and this institution. Finally, I want to recognize one other special individual. Vasiliki Christopolulos. ``Vas'' has served with me since I moved from the Governor's Mansion in Concord to join this Senate. Her official title is ``administrative assistant'' but I doubt that any title could adequately convey all the responsibilities that Vas assumes and carries out. Vas is what in Greek is referred to as ``apeeshetehtoh''--that is she is simply ``amazing.'' I doubt there is any member of this Senate who can point to a more dedicated and talented staff person. Vas makes my office work, she makes the larger ``team Gregg''--from appropriations to budget to my offices in New Hampshire--work in a seamless, smooth manner. Vas is probably one of the warmest, most decent people that has ever worked in this institution or in any institution. On a daily basis she brightens up the day for everyone she comes in contact with. I cannot say enough to recognize her and express my appreciation. So, Mr. President, this is an institution that is known by the names of the 100 elected members that serve here. But, I just want to note that there are many other names that are maybe less well known, but who truly make the business of this Senate occur and happen in a way that serves Americans around the great Nation. I yield the floor.

Mr. GREGG. As the majority leader has described, the independent commission will assist Congress and the administration by making recommendations regarding the modernization of the Medicaid system. The commission will have two primary tasks and two important deadlines: It will make short-term recommendations on how to implement the requirements of the budget resolution with respect to the Medicaid program. These recommendations will be contained in a report to the Secretary by no later than September 1, 2005. The commission will also make long-term recommendations on how to modernize Medicaid. These recommendations will be contained in a report to the Secretary by December 31, 2006. I thank my colleague for his work to develop a commission, and I look forward to working with him and my colleagues on the Finance Committee as we consider the recommendations of the commission to help create a viable plan to modernize and strengthen Medicaid.

Mr. GREGG. Mr. President, I thank the courtesy of the Senator from North Dakota and his staff and again thank my staff for the extremely effective way they have brought this process forward. This is the only opportunity to get us on a game plan for reducing the debt of the Federal Government, for moving forward in a process that is going to bring fiscal restraint to the Federal Government. My colleagues on the other side of the aisle, for all their talk, have not put a budget on the table. This budget is a real document. It is a strong game plan for moving down the road of establishing fiscal responsibility here at the Federal level. It freezes nondefense discretionary spending for 3 years. That is real savings. For the first time in 7 years, it steps onto the turf of entitlement and mandatory spending and begins the process of addressing two major issues which need to be addressed if we are going to get our fiscal house in order, specifically Medicaid and the Pension Benefit Guaranty Corporation. In addition, it reduces the deficit in half over the next 4 years and, as a result of stepping onto the issues of Medicare and entitlements, it begins the process of correcting the outyear problems we face as a nation which we should not be passing on to our children but which we will pass on to our children if we don't begin to act now. There has not been a budget in this Congress for 2 of the last 4 years. It is time to act on a budget. It is our obligation, especially as the majority party, to put forward a game plan for how we as a government are going to function and how we are going to move forward to act in a fiscally responsible way. This budget does that. In addition, it will continue to energize and activate the very strong economic recovery which we have seen over the last year. Hundreds of thousands of jobs have been added. Revenues have increased dramatically. That is a result of the policies of this President. This budget continues those policies in a manner which will continue that economic expansion, give entrepreneurs the opportunity to be aggressive, and create jobs for Americans. It is a good budget, and it is a good place to start. It is something we need to do. I yield the floor.

Mr. GREGG. Mr. President, as I understand the Senator from North Dakota, Senator Sarbanes wishes to speak for 10 minutes. I would suggest that Senator Sarbanes speak for 10 minutes, then we to go Senator Grassley for 15 minutes, then we go to Senator Stabenow; however you want. We will go back to your side for a half or so, and then we will come back over here. The next speaker on our side, after we go from Senator Sarbanes to Senator Grassley to--

Mr. GREGG. We may want to put Senator Hutchison between Senators Akaka and Stabenow. But if not, we will go with that sequence.

Mr. GREGG. I was going to make a point that the Senator would be recognized at 9:30.

Mr. GREGG. Mr. President, this order allows us to start opening statements on the budget. Senator Conrad should be available around 6 o'clock this evening, and his side will control the time after he arrives, which will be commensurate with the time we control, which I presume will be approximately an hour that we will use now until 6 o'clock. Mr. President, we are now turning to the budget of the United States, which is pending in the House and being debated in the House. This obviously is a major item for us as a Congress. It is very hard to take the position that a government that spends $2.6 trillion should not have an outline as to how it is going to spend that money, should not have a proposal and a policy for spending that money. That is why a budget is important. A budget doesn't get into the specifics of how the dollars are spent, but it does set out a very substantial and important blueprint as to how those dollars will be spent and what the policies are that will affect spending and taxes as we move into the future. The budget that we bring today is a result of a lot of hard work. I want to especially thank my colleague from North Dakota, the Democratic ranking member of the committee, and his staff, who have been extremely courteous and extraordinarily professional in the way they have approached the process. Senator Conrad is someone I have enjoyed working with very much. We disagree, obviously, but the disagreements have been on policy, and certainly there has been nothing but a professional, cordial, and friendly relationship between us. I also thank the majority leader and the assistant majority leader, Senator Frist and Senator McConnell, for their extraordinary effort. I especially thank members of my committee, all of whom have been very much engaged and who have been very involved in developing the budget. In addition, I specifically thank Senator Smith from Oregon, who has been a critical player in developing what is one of the core issues of this budget, which I will get into in a few minutes. Of course, I especially thank the staffs, both the majority staff and minority staff, and especially the staff on our side, led by Scott Gudes, and our colleagues across the aisle in the House who worked so hard to get us to this point. The budget we are bringing forward today is the result of what I consider to be some serious public policy problems we confront as a nation, and they involve the amount of spending the Federal Government is doing in relationship to revenues, and specifically the rate of growth of our spending and the fact that we are confronting very significant deficits not only in the short term but in the long term. I want to go through a few charts to explain the parameters of the problem. I think it is critical that people understand that and understand how this budget was developed. We received testimony in the committee from the Comptroller General of the United States that there are on the books today obligations of the Federal Government that exceed projected revenues of the Federal Government amounting to approximately $44 trillion. Now, a trillion dollars is an incomprehensible amount of money for anybody to understand. I will try to put it into context. This means we already have obligations that we have committed to as a government that we have not figured out how we are going to pay for, which in their total add up to $44 trillion, which amount of money compared, for example, to all of the taxes collected by the United States since we became a nation--all of the taxes collected during that time, over 200 years, total $38 trillion. So we actually have on the books more in obligation than we have collected in taxes in the history of the Nation. To try to put it in another context, if you take all the net worth of everybody in this country--everybody's car, house, savings account, stock, every asset that everybody has in this country--and add it all together, it adds up to about $47 trillion. This chart reflects the problem. The chart here is $44 trillion in outstanding obligations of the Federal Government. Over here we have the present net worth of the United States, which is $47 trillion. The amount collected since the beginning of the country is $38 trillion. The larger part of the chart reflects $44 billion, calculated on the actuarial life of these programs. The larger part of the chart is what the cost would be if you projected these programs out into infinity, which would be 100 years, which is about $84 trillion. So you can see that we are confronting a massive fiscal problem as a nation. The effects of this problem will be that somebody is going to have to pay this bill. Our generation is running up the bill and we are passing it on to our children, and our children will have to bear a huge cost in order to pay off this $44 trillion in debt that we have added up. To pay that off, basically, their quality of life is going to have to be reduced, unless we get started on addressing this problem now. Where does the $44 trillion come from? What are the obligations that created this huge number? This chart reflects it. It is entirely almost what is known as entitlements, or mandatory spending; it is the orange line. If you look at the mandatory spending, these are programs on the books that say, if you are a citizen and you have certain physical or demographic or income characteristics, you have a right to payment by the Federal Government. The majority of these entitlements, the mandatory spending is Social Security, Medicare, and Medicaid. These three items make up the vast majority of the cost of the $44 trillion, which is unpaid for. In fact, Medicare and Medicaid--the health care items of those three entitlements--represents about $27 trillion of the total of $44 trillion--$27 trillion of unfunded liabilities. That means after taking all of the taxes you pay, your HI tax--the hospital tax which you pay out of your payroll every week--there is still a debt, an obligation on top of those taxes of $27 trillion--a huge amount of money. Well, now, some would represent that if we raise taxes, we can solve this problem. But we cannot. I want to explain why and the next chart does that. Historically, the Federal Government has spent about 20 percent of the gross national product. That is what we spend as a Federal Government. We take the gross national product--20 percent of it--and spend it to govern. That has been in our history for quite a while, since the 1960 period. That is the blue line that runs across the chart. If you take the top three--Social Security, Medicare and Medicaid--just the cost of that, as projected out into the future, you will see that by about 2028, 2031--depending on what happens around here--the cost of those three programs to pay the benefits that have been committed under those three programs will exceed 20 percent of the gross national product. What is the practical effect of that? It is that if that were allowed to occur, you would have no money available to pay for national defense, education, environmental protection, the building of roads, or for anything other than those three programs. It gets worse. The line keeps going straight up--this is where the $44 trillion comes in--as those programs continue to demand more and more in order to support them because of the obligations that are on the books. So you can raise taxes almost endlessly and never catch up with the spending that we have on the books. That is the point. You cannot tax your way out of this problem. You simply cannot do it. You have to address these major programs and try to control their rate of growth so they are affordable, while still maintaining a benefit structure that is fair, especially to low-income Americans. If you don't do it, the practical effect would be that you will have to double the taxes on our children in the area of withholding in order to keep up with these costs during the period 2020 to 2040. That would mean our children, instead of being able to buy a house, a car, expand their education, or send their kids to college, they will have to pay a radically increased tax burden in order to support our generation. What is causing this huge explosion in costs? It is the fact that the baby boom generation is so large, the demographic shift is so huge, when our generation starts to retire because we go from a generation that has changed the culture of America throughout our lifetime to when we retire we will change the dynamics of the demand on the Federal Government; we shift that so radically that we put all these new costs on our children and our children's children to support our generation when we retire. People have heard me say this before. These retirement systems-- Medicare, Medicaid, Social Security--were structured on the concept that there would always be a pyramid, many more people paying into the system than taking out. In 1950, 16 people were paying into the system for every one person that was taking out. That is the pyramid concept, the genius of Franklin Roosevelt. Today, there are 3\1/2\ people paying into the system, and it is still affordable. But as we head into this next century and as this huge baby boom generation of which I am a member retires, there will only be two people paying into the system for every one person taking out. So we go from a pyramid to a rectangle, and you simply cannot support the system as it is structured. The taxes on our children will far exceed their capacity to pay them in order to support the benefit structure. So how do we address this? Well, one way is to bury our heads in the sand and say it is not a problem and hope our children can handle the tax burden increase. But that is not acceptable. As leaders and as people charged with the responsibility of public policy in this country, we need to get ahead of this issue before we get to the problem. And that is where this budget comes into play. The President sent us a budget which for the first time in 7 years stepped on the sacred ground of trying to address the entitlement costs of the Federal Government. Independent of the budget, of course, he has tried to address the Social Security issue. By law, the Budget Committee is not allowed to address Social Security. So that one is taken off the table for us as a committee. But we do have the capacity as a Budget Committee to step forward and try to do something about the issue of entitlements beyond Social Security, and that is what we are going to try to do in this budget. We are going to try to begin the process of relieving the pressure that is going to be put on the next generation. This budget does three basic things. In the short term, it reduces the deficit in half over 4 years. It does this by aggressively controlling the rate of growth of discretionary spending that is nondefense. Specifically, we freeze it for 3 years. That is a very aggressive position. Nondefense discretionary spending is frozen for 3 years. But more importantly, we reestablish enforcement mechanisms known as spending caps. Members can come to the floor, and if a bill exceeds that freeze, they can make a point of order against that bill, and it will take 60 votes in the Senate to pass that bill. That is an important change, a very important change--not a change but a reinstitution of budget discipline. What happened? Why don't we have caps today? We do, but they are very much at the margin. The problem is that because we did not pass a budget last year and because 2 out of the last 4 years we have not passed a budget, we have lost most of the really effective enforcement mechanisms or are on the verge of losing most of those enforcement mechanisms in the next budget cycle. So it is critical we get a budget to put those enforcement mechanisms back into place so we can control in the short term the rate of growth of a number of accounts but especially the discretionary accounts. We put in place a budget which moves us toward reducing the deficit in half over 4 years. That is one deficit issue. More importantly, the big issue, which I have just discussed, which is this long-term fiscal catastrophe we are headed toward as a nation unless we do something about it, we begin to address that. We do not do radical steps in that direction. This is going to be a long and arduous process. It is difficult, and it is going to be a bumpy road, but what we do is we take some very significant steps down that road toward reintroducing fiscal restraint into the entitlement accounts that we have under our control and that we are willing to address. We do this in two specific accounts that are critical: Medicaid and something called the Pension Benefit Guaranty Corporation. We can look at these three accounts--Social Security, Medicare, and Medicaid--as being the primary drivers of our problem, but there are other issues out there that are very significant in driving our fiscal problems, and one of them is the Pension Benefit Guaranty Corporation. It is a corporation that makes sure, if you have a pension, a defined benefit plan, and your company goes under, the Federal Government guarantees that pension. The taxpayers end up with a bill for doing that, by the way. Mismanagement on a corporation's behalf, excessive benefits structure, poor management in the marketplace, a company goes under, and the taxpayers end up with the bill. That projected liability out there today, the contingent liability of the taxpayers of the United States for the Pension Benefit Guaranty Corporation, is estimated to be $25 billion to $30 billion, and it may be radically higher than that, to be very honest. So we need to reform that system, and the budget we are addressing today begins that process. We try to address that niche issue of significant fiscal problems we have as a nation, which is correcting the Pension Benefit Guaranty Corporation. Equally and even more important is we step forward on one of three entitlement accounts. We only have jurisdiction over two of the three, as I mentioned earlier. We step forward on the Medicaid issue, and we put in place--Senator Smith basically orchestrated this, and he is going to talk about it--a process to move to get substantive reform in the Medicaid accounts so they are affordable and continue to deliver a quality service to kids in need and people who have to go into nursing homes and cannot afford it, but at the same time they are affordable. What we do is have an advisory committee or a commission set up which will study the issue. It must report by September 1. We have a reconciliation instruction which says the committee of jurisdiction has to come back and reduce the rate of growth of Medicaid by $10 billion. I will get back to that. And we limit that action on the $10 billion reduction, so we delay it a year. So there is a year to get ready to do that. I want to put this $10 billion in context because this is a major savings item of the budget in the area of entitlement reform. Over the next 5 years, we are going to spend $1.12 trillion, a huge amount of money, on Medicaid. This budget is suggesting that we reduce that rate of spending over the next 5 years by $10 billion; $10 billion on a $1.12 trillion base, approximately 1 percent. One would think we were scorching the Earth when we initially proposed this. Obviously not. The practical effect of this is we are taking a program that is going to grow at 41 percent over the next 5 years and reducing its rate of growth to 39 percent. We can do that. If we are halfway decent as managers of the tax dollars of Americans, we can do that, reduce 1 percent off a program that is growing so quickly, reduce its rate of growth from 41 percent back to 39 percent. In fact, we can do that, and we can actually give more services to more kids and more people who are deserving of it. The reason is that Medicaid, unfortunately, has some problems right now in the way it is functioning. There is a fair amount of Medicaid money which is being shifted from the delivery of service to needy children and to people who need help going into nursing homes over to simply the general operation of State government. That should not happen anymore, and we can end that. Unfortunately, there is a lot of abuse, where people are spending down in order to qualify for Medicaid and hiding assets and transferring over to the taxpayers costs which they should fairly bear. There are significant savings which can occur in the way we purchase pharmaceuticals under Medicaid. There is a whole list of items which Governors are willing to consider in order to accomplish savings. But what the Governors need is more flexibility. We give the Governors more flexibility and a little less rate of growth in this program, and they are going to deliver more services to more people at less cost. It is that simple. A good Governor will do that, and there are a lot of Governors out there willing to try. So there has been a compromise we reached on Medicaid which has been orchestrated and energized by Senator Smith of Oregon. I congratulate him for it. It is a good compromise because it will start us on the path toward looking at public policy which will start to address--it is not going to resolve the problem--will start to address the issue of this element of the entitlement problem, the Medicaid element of this chart, and it is one of the three major items. In addition, as I mentioned, we have taken up the PBGC issue. This is the first budget in 7 years which has stepped on the sacred ground of entitlements and tried to manage them at least marginally. The total amount of entitlement for reconciliation savings--not all of it is entitlement--but the total amount of reconciliation savings in this bill is approximately $35 billion. That is a very reasonable number. That is a 5-year number. So it is something that can certainly be accomplished. The third thing that this budget does is it continues to energize economic growth. When the President came into office, he was confronted with a very severe recession as a result of the burst of the Internet bubble. That was compounded, of course, by the attack of 9/11, which caused our economy to stumble severely as a result of the adjustment to what was a new world. Then we had to dramatically expand our commitment to national defense and homeland security in order to participate aggressively in finding the people who were responsible for this horrific act of 9/11 and making sure that we are as well prepared as possible in avoiding another attack. So the President was confronted with an unfortunate set of facts relative to the economy, and there was a recession. But that recession's severity was significantly reduced because this President had the foresight to reduce the tax burden on America's workers early so that people were allowed to keep their money and there was incentive for entrepreneurship, an incentive to go out and work harder, and an incentive to create jobs. The recession was shallowed out as a result of that. Now we are seeing a dramatic turnaround in the amount of revenues the Federal Government is receiving because of that. Revenues dropped precipitously, everyone knows that, but they dropped because we were in a recession and because we were attacked. The tax cut that was put in place has essentially helped us recover in the revenues area because people have gone out and they have become more productive as they have been willing to work harder, earn more, and create more jobs because the tax burden has been reduced. The function of that is that more incentive is created to be productive. We are seeing the results. Last year, tax revenues grew at 9 percent. This year, they are going to grow around 7 percent or maybe even faster. The month of April, which has not been formally reported yet, looks like it is going to be one of the highest collection months as far as revenue goes in the history of the country, a dramatic jump in revenues as a result of the tax cut. For the foreseeable future it is expected under this budget, and I think under all economic assumptions, that tax revenues are going to continue to compound at a rate of about 6 to 6\1/2\ percent as a result of a strong economy, driven by a good tax policy. We continue that tax policy in this bill. This bill does not assume any new tax cuts, but it does assume that tax cuts that are on the books, that are very constructive, and which people use in their day-to-day life will be continued--tax cuts such as the R&D tax cut, the research and experimentation tax cut, the deduction for teachers' classroom expenses, the deduction for qualified education expenses, the deduction for State and local taxes, the welfare-to-work tax credit. These are tax credits that are continued. We hear a lot of talk from the other side of the aisle that, oh, there are just not enough tax increases in this bill; we have to raise taxes. Which one of these deductions which is about to expire does the other side of the aisle want to allow to expire and put more burden on American workers? I doubt there are very many that would fall into that category that are on this list, and that is what this bill assumes-- that we will continue in place tax proposals which encourage people to be more productive, such as the R&D tax cut, or give people a benefit they deserve, such as teachers being allowed to expense classroom costs, and that are popular. So we will continue a tax policy under this bill which will continue to energize economic growth. As we have brought this budget forward, it puts us on a path to accomplishing positive steps in the area of fiscal responsibility and fiscal restraint. It is a budget which reflects the President's initial budget which was a commitment to trying to begin to address the deficits in the short run and, more importantly, the long-term issue of the fiscal problems we confront because of the demographic boom which I mentioned, which is coming at us. For that reason, it is a very positive budget. I wish to make one more point about the budget before I yield to the Senator from Oregon, whose thoughts are very important here because he is one of the key players in addressing this critical issue of Medicaid. This budget is critical because it also puts back in place and actually energizes new initiatives in the area of enforcement mechanisms. These are procedural things, yes, and they are arcane things, yes. Most people do not understand what they are, that is true. But it was interesting, when Alan Greenspan testified before the Budget Committee last week, he said the most significant thing that had happened in the area of disciplining Federal spending was that we had budget enforcement mechanisms in place through the late 1990s and early 2000 period and we needed to reinitiate those initiatives. By law, we cannot pick them all up because this is a resolution, not a law. The way this works, we cannot pick them all up. But to the extent that the budget resolution can put back in place and strengthen enforcement mechanisms to allow this Congress to be disciplined in the way it spends money, this resolution does that in an extraordinarily aggressive way. So this is a good resolution. It is a positive step. It takes us on the right direction toward fiscal discipline. I certainly hope my colleagues will support us in moving it forward. Now I yield to the Senator from Oregon such time as he may consume.

Mr. GREGG. Mr. President, I ask unanimous consent that notwithstanding the receipt of the House message and having the Senate papers at the desk, the Senate begin consideration of the conference report to accompany the budget resolution; provided further that the time from now until the arrival of the ranking member be under the control of the chairman; provided further that when the ranking member arrives, he be recognized to be in control of a like amount of time.

Mr. GREGG. Mr. President, this may take a further response--and I know the Senator from Texas wants to go forward--to make clear what the budget does with regard to tax policy. This budget does not do anything outside of a baseline for taxes other than make it possible to extend a series of tax incentives to working Americans that are going to last. These include the research and experimentation tax credit, the deduction for teachers' classroom expenses, deduction for qualified education expenses, deduction for State and local taxes, welfare-to- work credit, work opportunity tax credit, and making sure the alternative minimum tax does not pick up a lot of working Americans which that tax was not supposed to cover. The representation that this budget has language which initiates tax cuts for other people, whether wealthy or not, is simply wrong. The baseline of the budget for the next 5 years assumes what present tax policy is. If the other side of the aisle desires to introduce a bill or proposal which raises taxes outside of the present baseline, if they want to raise taxes on wealthy working Americans, if they want to raise taxes on small business, which is what makes up most of the high tax bracket income in our country, they are perfectly within their right to do so, but they should not represent that this budget does anything in that area other than continue the current baseline. What this budget does in the tax policy area is allow the tax writing committees to extend tax credits and tax deductions that go to working Americans, such as classroom teachers, which are going to lapse and which I suspect a majority of this body would support. That is important. On the issue of Social Security, there is no other place that Social Security surplus can be invested today than in the Federal Government activity. The Senator from North Dakota knows that. The only thing Social Security surpluses can be used for today is to buy bonds which the U.S. Government issues, and they obviously financed. So this representation that is being used to finance the operation of the Government, in reciting that as some sort of terrible action, is a reflection of the way the law works. You can invest anywhere else. If you want to invest in something else, as the President suggested, you can put it into personal accounts and let the people invest in stocks or bonds through the Social Security Administration as proposed and give people a real asset that they own outside of Government bonds. That is what the President has suggested. That is what has been rejected by the other side. They cannot have it both ways. They cannot on the one hand say the law as it works is inappropriate because it funds the Government, and on the other hand say Americans should not be allowed to invest in some sort of activity through the Social Security Administration which would give them private ownership. The policy is inconsistent. I yield to the Senator from Texas such time as she may consume. Mr. CONRAD addressed the Chair.

Mr. GREGG. Obviously, the Senator has been responding to what I have been saying now for 2 hours. I have worked in 30 seconds, and I think we ought to give the Senator from Texas an opportunity.

Mr. GREGG. Mr. President, responding to the Senator's inquiry, Senator Hutchison is here, and I think she will be ready to go in 5 to 10 minutes.

Mr. GREGG. The Senator wants to respond to what I said, I take it?

Mr. GREGG. I move to reconsider the vote.

Mr. GREGG

Mr. GREGG. I ask unanimous consent the staff on the Budget Committee listed below be granted floor privileges for the duration and consideration of the conference report to accompany H. Con. Res. 95: Senate Budget Committee Floor Privileges List, 109th Congress Amdur, Rochelle; Bailey, Stephen; Bargo, Kevin; Binzer, Peggy; Brandt, Dan; Browne, Mara; Cheung, Rock E.; Dempsey, Don; Duckworth, Cara; Esquea, Jim; Eyster, Sarah; Fisher, David; Friesen, K atherine; Green, Vanessa; Gudes, Scott B., (Staff Director, Full Access Pass); Haskell, Tyler; Havlik, Matthew; Hearn, Jim; Howe, Matthew; Isenberg, Cliff. Jones, Michael; Kermick, Andrew; Klumpner, James; Konove, Elissa; Konwinski, Lisa, (General Counsel, Full Access Pass); Kuehl, Sarah; Lofgren, Michael; Lucia, William; Mashburn, John; Millar, Gail, (General Counsel, Full Access Pass); Miller, Jim; Mittal, Seema; Monk, Kimberly; Morin, Jamie; Myers, David; Nagurka, Stuart; Naylor, Mary (Staff Director: Full Access Pass); Nelson, Sue; Noel, Kobye; O'Keefe, Shannon. O'Neill, Maureen; Ortega, David A.; Osterberg, K. Gayle; Page, Anne; Pappone, David; Parent, Allison; Phillips, Roy; Pollom, Jennifer; Posner, Steven; Reidy, Cheri; Richardson, Stephen; Righter, John; Seymour, Lynne; Vandivier, David; Ventimiglia, Vincent; Weiblinger, Richard; Woodall, George.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the amendment at the desk submitted by Senator Isakson be considered; provided further that the amendment be agreed to, and the motion to reconsider be laid upon the table.

Mr. GREGG. Mr. President, I ask unanimous consent that Senators Thomas and Johnson be added as cosponsors of Thune amendment No. 593. I further ask unanimous consent that the yeas and nays previously ordered on the amendment be vitiated and that the amendment be adopted.

Mr. GREGG. I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GREGG

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

Mr. GREGG

Mr. GREGG. Mr. President, today I am joined by my colleagues Senators Lieberman, Frist, Landrieu, Sununu, Alexander, DeMint, Dole, Vitter, Burr, in support of this resolution to designate the week of May 1 through May 7, 2005 as National Charter Schools Week. This year marks the 13th anniversary of the opening of the nation's first charter school in Minnesota. Since that time, charter schools have experienced tremendous growth as more and more parents discover for themselves why surveys show such high levels of parental satisfaction with charter schools. Today, there are almost 3,300 charter schools serving nearly 900,000 students in 40 States, the District of Columbia, and Puerto Rico, up from 3,000 schools serving 750,000 students just 1 year ago. Nearly 40 percent of these schools report having waiting lists, and there are enough students on these waiting lists to fill another 1,000 average-sized charter schools. Charter schools serve a unique role in public education. They are designed to be free from many of the burdensome regulations and policies that govern traditional public schools. They are founded and run by principals, teachers and parents who share a common vision of education, a vision which guides each and every decision made at the schools, from hiring personnel to selecting curricula. Furthermore, charter schools are held strictly accountable for student performance-- if they fail to educate their students well and meet the goals of their charters, they are closed. Most importantly, charter schools are raising student achievement. Research has shown that charter school students are more likely to be proficient in reading and math than students in neighboring traditional schools, and that the greatest achievement gains can be seen among African American, Hispanic, and low-income students. Research also shows that the longer charter schools have been in operation, the more they outdistance traditional scores in student performance. Since each charter school represents the unique vision of its founders, these schools vary greatly, but all strive for excellence. There are countless examples of charter schools that are having an enormous impact on their students both academically and personally, and on the surrounding community. For example, the Vaughn Next Century Learning Center in San Fernando, CA, serves students in grades K-12, 97 percent of whom qualify for free lunch, and 87 percent of whom speak limited English. Fifteen years ago, the Vaughn Street School was a haven for drug deals and violence, and students' test scores were the lowest in the San Fernando Valley. Since it converted to a charter school in 1993, Vaughn rose from the ninth percentile in language arts and the eleventh percentile in math to become a National Blue Ribbon School. Test scores have gone up 330 percent in the past 5 years alone. As a result of the autonomy granted by converting to charter status, Vaughn has been able to redirect considerable resources to programmatic efforts, including an extended school year and comprehensive afterschool program. The school has also expanded its offerings to the greater community, including a school- based clinic, family center, business co-op, and library. Cincinnati's W.E.B. DuBois Academy, serving children in grades 1 through 8, recently became the only elementary school in the city and one of only 102 schools in Ohio to be recognized as a ``School of Promise.'' The recognition follows a period of remarkable improvement for the low-income school, which now boasts that 100 percent of its students passed State tests in six areas. The school has met the State's requirements for Adequate Yearly Progress, and is closing the achievement gap--and has generated a lengthy waiting list along the way. The W.E.B. DuBois Academy attributes its success to extended research-based instructional time, performance-based pay for teachers, strict discipline, and a rewards system that reinforces outstanding academic performance. Says founder Wilson H. Willard III, ``We've implemented a research-based system that addresses the constraints that compromise traditional education. In doing so, we've generated successful academic results for hundreds of our students. . . . defying convention has built success for the school, and most importantly, each student in it. In the end, that's what really matters.'' These are but a few of the promising schools in the charter movement, which includes a wide range of schools serving a variety of different learning needs and styles, often at a lower cost than traditional public schools. I am pleased that four such schools have launched in New Hampshire this year, ranging from the State's first school for deaf and hard of hearing students to academies focused on the arts, technology, and business. Several more schools will soon open their doors in the Granite State, offering additional options for parents and students, including those most at risk. I expect that we will see charter schools continue to expand both in New Hampshire and nationally. Three years ago, the President signed into law the No Child Left Behind Act, which gives parents in low- performing schools the option to transfer their children to another public school. No Child Left Behind also provides school districts with the option of converting low-performing schools into charter schools. I believe these provisions will strengthen the charter school movement by creating more opportunities for charter school development. And, as parents exercise their right to school choice and ``vote with their feet'', the demand for charters schools will increase. I commend the ever-growing number of people involved in the charter school movement, from parents and teachers to community leaders and members of the business community. Together, they have led the charge in education reform and are helping transform our system of public education. Districts with a large number of charter schools have reported that they are becoming more customer service-oriented, increasing interaction with parents, and creating new education programs, many of which are similar to those offered by charter schools. These improvements benefit all our students, not just those who choose charter schools. I encourage my colleagues to visit a charter school during National Charter Schools Week to witness firsthand the ways in which these innovative schools are making a difference, both in the lives of the students they serve as well as in the communities in which they reside.

Mr. GREGG

Mr. GREGG. Mr. President, I am intrigued by the amendment of the Senator from West Virginia. I do not believe taxpayers should be funding propaganda. I think it is totally inappropriate, other than in an attempt to promote American policy overseas, for example, where we should be funding communication with other people around the Earth, as we do through Radio Free America, Radio Liberty, and other radio stations that have been developed over the years for the purposes of presenting the American position in regions of the world where our access is limited. But here in the United States, clearly, if the Government wishes to make a point, that should be disclosed. If taxpayers' dollars are being used to make a point, that should be disclosed. I agree with the basic concept of the theme of the Senator's amendment. So I expect that this amendment must apply to National Public Radio. National Public Radio, of course, receives a large amount of tax subsidy. It presents views which one could argue are propaganda, in many instances. If I read this amendment correctly, I believe, and I would hope the record would reflect, this amendment will apply to National Public Radio so that when they put out a newscast it will have to be announced that this newscast is put out at the expense of the American taxpayer and that the American taxpayer has paid for this report. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, the pending Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief for 2005, H.R. 1268, as reported by the Senate Committee on Appropriations, provides a net $80.582 billion in budget authority and $32.790 billion in outlays in fiscal year 2005. Of this amount, $74.763 billion is for defense activities, and the balance of $5.819 billion is for nondefense activities. This bill is $1.299 billion less than the President's request in budget authority, but is $0.699 billion more in outlays. Compared to the House-passed bill, the Senate-reported version is $0.759 billion less in budget authority, but is $0.608 billion more in outlays. Nearly every individual appropriation item in the bill is designated as an emergency. In total, the bill designates $81.592 billion in budget authority as an emergency, the outlays flowing from that budget authority also have the emergency designation; in fiscal year 2005, the associated outlays are estimated to be $32.790 billion. The bill includes rescission totaling $1.010 billion in budget authority only. For the information of my colleagues, I would like to briefly summarize where the Senate stands in relation to budgetary enforcement of appropriation bills in 2005. Although the conference report on the 2005 budget resolution was not adopted by both the House and Senate, enactment of the 2005 Defense Appropriations bill, P.L. 108-287, section 14007, did give effect to some of the provisions in that resolution, including a 302(a) allocation to the Appropriations Committee and sections 402 and 403 of the 2005 budget resolution relating to emergency legislation and overseas contingency operations. First, any appropriation for 2005 that is not designated as an emergency or as an overseas contingency would be subject to a 302(f) point of order because appropriations enacted to date have already exceeded the allocation provided for 2005. Second, of the total amount designated as an emergency in H.R. 1268, $74.763 billion in budget authority is designated as an emergency for defense activities, which is exempt from the emergency designation point of order. Section 403 of the 2005 budget resolution provided that $50 billion was assumed in the resolution for 2005 appropriations for overseas contingency operations, which would not even require an emergency designation. The same law that gave effect to sections 402 and 403 of the 2005 budget resolution also provided $25 billion for overseas contingency operations that were designated an emergency, but the funds were provided in 2004. One way to think about the $74.763 billion in emergency defense funds provided in this bill is that it exceeds by almost $25 billion in the amount contemplated for overseas contingency operations for fiscal year 2005 in the 2005 budget resolution. Third, the remaining amount that is designated as an emergency in H.R. 1268--$6.829 billion--is all for nondefense activities. As a result, any member of the Senate may use the emergency designation point of order under section 402 of the 2005 budget resolution to question, or strike, the emergency designation attached to each individual nondefense appropriation item in the bill or an amendment thereto. Such a point of order can be waived with 60 votes. If the point of order is not waived, the designation would be struck from the bill or amendment, leaving only the appropriation, which, absent its emergency designation, which would have prevented the item from ``counting'' for budget enforcement purposes, would then count against the committee's allocation, meaning a 302(f) point of order would lie against the bill or amendment. May I also point out to my colleagues that the emergency designation point of order requires that if ``a provision of legislation is designated as an emergency requirement . . . the committee report and any joint explanatory statement of managers accompanying that legislation shall include an explanation of the manner in which the provision meets the criteria,'' which are defined as follows: ``Any such provision is an emergency requirement if the underlying situation poses a threat to life, property, or national security and is--(I) sudden, quickly coming into being, and not building up over time; (II) an urgent, pressing, and compelling need requiring immediate action; (III) . . . unforeseen, unpredictable, and unanticipated; and (IV) not permanent, temporary in nature'' with the proviso that an ``emergency that is part of an aggregate level of anticipated emergencies, particularly when normally estimated in advance, is not unforeseen.'' I note that the committee report does not include any discussion of how each individual item in this bill that is designated as an emergency meets all of these criteria. This supplemental appropriations bill has been requested by the President, and the Congress has responded. It will be conferenced quickly and signed by the President. I know the temptation is strong, almost irresistible, for my colleagues to attempt to amend the bill with extraneous items that may be quite important--but this is not the place for them. I will strongly object to making this supplemental appropriations bill ``Christmas in April'' for various nondefense discretionary items and for new or expanded mandatory spending. I commend the distinguished Chairman of the Appropriations Committee for bringing this legislation before the Senate, and I ask unanimous consent that a table displaying the Budget Committee scoring of the bill with comparisons to the House-passed bill and the President's request be printed in the Record.