Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I appreciate the Senator from Pennsylvania bringing this amendment forward. I know of his deep commitment to NIH and education, and as chairman of the Appropriations subcommittee which has jurisdiction over both of these accounts on the discretionary side, it is challenging, to say the least. He has the second largest appropriating account in the Senate after defense, but he probably has the job with the most demands on it well beyond defense, and he has attempted to balance those demands very effectively. However, in this instance, I believe we should stay with the basic numbers we have put forward in this budget. It is critical if we are going to have fiscal discipline around here to have a top-line discretionary number which we have agreed to--843-- and that we not within the budget process try to redirect funds within that number in a way that either negatively impacts other accounts or positively impacts accounts. That would be a unilateral activity of the Senator from Pennsylvania when he starts marking up the bill. The 920 account, if it is used here, will have the practical effect of an across-the-board cut on all other accounts in the Government that are discretionary so that it creates a pressure that will be difficult to handle if it is put forward in this way. On the specific issue of funding, we all recognize NIH is a premier institution and has done an extraordinary job, but we have to recognize this Congress has been extraordinarily generous over the last few years with NIH. Beginning at the beginning of the Bush administration, there was a decision to double the funding of NIH, and that is exactly what happened. It has grown at rates of 13 and 14 percent annually compounded. It has gone from $13 billion to a $27 billion account and $28 billion account in the last 5 years, a huge expansion in the commitment to research in the area of health care. There are some concerns with whether we should not take a brief breathing period and make sure dollars are being used efficiently. The President has proposed an increase for NIH but not as much as maybe NIH believed it would like, but certainly in the context of the dramatic increase in funding over the last few years it is appropriate. In the education accounts, this President has committed huge increases in education. The numbers are staggering, quite honestly. It is the commitment the administration has made relative to the prior administration. In the area, for example, of the overall discretionary budget, the Department of Education has gone up 33 percent since the Clinton years. In the area of No Child Left Behind, it has gone up 46 percent, title I has gone up 52 percent, IDEA has gone up 75 percent. The way the President structured the budget was to say let's take a look at the miscellaneous educational programs that are targeted that have a small impact and see whether those priorities, in comparison with the big programs in which the Federal Government has a major role, such as No Child Left Behind, special education, Pell grants, and title I, the President decides to put more money into those programs rather than to the specific targeted programs. Obviously, it will be up to the Senator from Pennsylvania, working with his committee and working with Senator Enzi, chairman of the Education Committee, to make decisions as to how that should shake out. But in this budget the President has proposed significant increases in the core educational programs. In special education he is up $450 million; in title I, he is up $1 billion; and in No Child Left Behind, up $1 billion; in Pell, which is not reflected appropriately, in my opinion, in this budget, or has not been discussed appropriately, he is up half a billion. We have specifically raised the cap--hopefully, it will end up there, but we have no control over how the allocations occur--to give Senator Specter's subcommittee an additional half billion specifically for Pell. So the grants can go from $4,150 and give it authority to allow the Pell grants to be restructured so you can get a $5,100 Pell grant under the new structure which is being proposed under this bill should Senator Enzi's committee decide that is how they want to proceed. In addition, we have set aside $5.5 billion in the budget in a reserve fund specifically to fund a new Higher Education Act, the purpose of which is to dramatically expand the Pell grants and take them up to $5,100 for those who go to school 4 years and dramatically expand borrowing for students through the Guaranteed Student Loan Program. Education is strong in this budget and I hope we will stay within the terms of this budget rather than expanding beyond that. I recognize the problems the Senator from Pennsylvania has are difficult, probably the most difficult of any of the Appropriations subcommittees, and I understand why he brought this amendment forward. I presume I have used all my time.

Mr. GREGG. Mr. President, I ask unanimous consent that we suspend that process for a second so I may make a request for a unanimous consent.

Mr. GREGG. Mr. President, at the conclusion of the Specter amendment, which is about to be voted on, we are going to proceed with a series of amendments and debate. We will begin a debate for an hour, hopefully, around 5:10, 5:15 on a Medicaid amendment by Senator Smith. That will be followed by debate from 6:15 to 7 o'clock on the Carper amendment dealing with reconciliation, followed by debate from 7 to 7:30 on a Wyden amendment on bargaining, followed by debate from 7:30 to 7:45 on a Harkin amendment on education, followed by debate from 7:45 to 8:05 on a Hutchison-Ensign amendment on Border Patrol, followed by debate from 8:05 to 8:20 on a Landrieu amendment on----

Mr. GREGG. National Guard, followed by debate from 8:20 to 8:35 on a Santorum amendment on HIV, followed by debate from 8:35 to 8:50 on a Voinovich sense of the Senate on budgeting, and followed by debate from 8:50 to 9 o'clock on a Dorgan amendment on----

Mr. GREGG. How much time does the Senator from Iowa have?

Mr. GREGG

Mr. GREGG. Mr. President, I yield time to the Senator from South Carolina.

Mr. GREGG. Mr. President, that vote took 20 minutes. This time does not count against the underlying budget resolution. When we have a series of stacked votes such as this, if people do not vote within the 10-minute framework of the vote, we are talking about extending the timeframe of the resolution by the time we run over the vote. So if we have 20 or 30 votes and we are adding 10 minutes to every one of those votes--which we will have before we finish, believe me--we are talking 2, 3, 4, 5, 6 hours of additional time we will be in session on this resolution, which means a lot of us, or all of us, are going to be here very late on Friday night. It is up to us whether we discipline ourselves, but hopefully folks can stay within the 10-minute timeframe we have set up. That is why Senator Conrad and I decided to stack these votes, so we could move this process along. We would like to continue to work in that framework. Amendment No. 150

Mr. GREGG. Mr. President, I ask unanimous consent for 1 minute.

Mr. GREGG. This would be for the purposes of renewing a unanimous consent request.

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

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

Mr. GREGG. I renew the unanimous consent request which I propounded a few minutes ago.

Mr. GREGG. I thank the Senator from Florida for his courtesy.

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

Mr. GREGG. I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 144

Mr. GREGG. The Senator from North Dakota is correct. That is our intention.

Mr. GREGG. I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GREGG. Mr. President, this amendment has a lot of problems. But three of the major ones are, first, it creates a precedent of mixing the general fund with the Social Security fund, which is a big mistake. Second, it treats entitlements entirely different than it treats tax cuts, which is a big mistake. And third, it is brought forward by a party which says there is no Social Security problem and, therefore, we will never have a tax cut because they will not admit there is a problem. It is essentially a stalking-horse for doing nothing on the issue of relieving American taxpayers of the burden which they have under the present tax system at any time in the future. As we know, we need major tax reform. So it would be a huge mistake to put this point of order in place.

Mr. GREGG. Mr. President, I amend the request to reflect the fact that the votes cited in the request would begin at 1 o'clock.

Mr. GREGG. Would the Senator yield?

Mr. GREGG. Will the Senator yield so that I may agree with him on something?

Mr. GREGG. Mr. President, I ask unanimous consent that at 2:15----

Mr. GREGG. Mr. President, let me take a few minutes to try to reframe the issues which are before us because a lot has been said by the other side that has gone unrebutted, and I think it needs to be responded to because some of it, I believe, is bad policy and some is just inaccurate. The representation that the Senator from Colorado was inaccurate in his statement relative to what has happened to taxes is also inaccurate. The statement of the Senator from Colorado was correct. Since the tax cut was put in place, yes, there was a falling off of tax revenues during that period. It was primarily driven by a recession, which would have been a much more severe recession. And there would have been a much deeper drop in revenues had the tax cuts not occurred. That recession was driven by two primary elements. The first was the breaking of the bubble of the late 1990s, the largest bubble in the history of the world, the Internet expansion bubble. The second was the attack of 9/11, which was a terrorist attack, which contracted the economy as a result of America adjusting to that. And, of course, we had to spend a lot of money to get ready to deal with this terrorist event, and that was money we had not expected to spend. But since those tax cuts have been put in place something very significant has happened. There has been an increase of revenues. The recession was shallower than we expected. As a result of the tax cut being put in place, people, therefore, received more of an incentive to go out and work harder and to invest more of their money. Rather than having the Government make the decision as to where money was being spent, people were making decisions where their dollars were going to be spent. As a result, we had a more efficient economy and jobs have been created. In fact, we have seen the largest expansion of the economy since the early 1990s in the last quarter. Today we are at a historic low in unemployment. Today revenues are going up, and they have gone up for a number of years. This chart points it out. Last year revenues went up by 9.4 percent at the Federal level. That is a pretty big jump. The next year--this year--it is expected to go up by 7.6 percent. Next year it is projected to go up by 6.5 percent; then, 6 percent; 6 percent; 5.5 percent. These are very significant increases in Federal revenues, and they are a function of the fact that we have in place a tax law today which gives people the incentive to go out and be productive. Two specific revenues which have jumped dramatically are revenues from dividend income and revenues from capital gains income, both of which the rates were cut--dividends to 15 percent, capital gains to 15 percent. What was the practical effect of that? If you listened to the other side, you would say the wealthy in America got a huge tax cut. What actually happened was the Government of America got a huge tax windfall. Items which were not being taxed before, such as capital gains assets--assets which had appreciated and which people were refusing to sell or convert or trade because they did not want to have to pay taxes--suddenly people were saying: Well, let's sell that stock. Let's sell that piece of real estate. Let's sell our small business because today we will pay less in tax. So assets which had been locked down from which the Federal Government was getting no revenue suddenly were being sold. As a result, we had a huge spike in revenues from capital gains. Not only did we get the spike in revenues, we saw those revenues reinvested in a much more efficient way because the dollars that came out of those assets which had been sitting there were now cash in people's hands, and they had been put back in the economy in a more productive way because that is the way a market economy works. So we got a double benefit. We got more tax revenues as a result of that tax cut, and we got a more efficient marketplace. As a result, we have gotten more jobs and more productivity as a nation. That is all a big plus. Now, the 1930s economics that the other side subscribes to--which is that you can simply tax your way to prosperity, that Americans really should not own their own assets, that the Government owns your assets, that we here in the Senate have a better way of spending your money than you have--that philosophy has been proven to be not only unconscionable but counterproductive to a strong economy in this day and age. Yet we see it restated here over and over again with amendment after amendment from the other side of the aisle which simply says: Let's tax people more. Let's spend more. We know how to spend your money better than you do. We're just going to raise your taxes and then put it on our special little project. And we are going to put it here or put it there so we can put out a good press release. Well, the effect of that, of course, is to stifle the economy, to stifle productivity, to reduce the creation of the job atmosphere in this country. What this President understood--as we headed into a recession, which was not of his making, which came out of the 1990s bubble, which came out of the fact that we were attacked on 9/11--what this President understood in this timeframe is, if you reduce taxes, you create an incentive for people to be more productive. If you say to people, you spend your money rather than having the Federal Government take it out of your pocket and have some Senator here in Washington tell you how to spend your money, that dollar is going to be spent more efficiently and create more jobs. That is exactly what has happened. Not only has that happened, but the Federal revenues are going up as a result of it, and they are headed back toward what the historic level of revenues is in this country, somewhere around 17.9 percent of gross national product. We do not have as a nation a problem that the American people are undertaxed. Show me an American who is working today who is earning income who feels they are not paying enough in taxes. There are very few who fall into that category. Most Americans pay a fairly heavy load in taxes and a fairly reasonable load in taxes. They do not need to be hit with more taxes. Yet as we go through this budget, the only solution we hear from the other side is: Raise taxes and spend more money. Raise taxes and spend. The first amendment out of the box--a tax-and-spend amendment. We have a list of tax-and-spend amendments that came out of the Budget Committee that added up to $220 billion in new spending that the American people were going to be stuck with and $240 billion of new taxes they were going to be stuck with. Tax-and-spend--oh, that is a wonderful policy. The only problem is, it creates a fairly significant burden on the American people after you raise the taxes. Americans would rather spend their own money than have us spend it for them, quite honestly. We already spend enough money. This budget will spend $2.6 trillion. Now, even in the hallways of the Democratic caucus that has to qualify as serious money. That is a lot of dollars to be spending. And where does it come from? Well, it comes from Americans, Americans who are working. This budget will spend $100 billion more this year than we spent last year. Even in the hallways of the Democratic caucus that should be serious money. You can run the State of New Hampshire for 20 years with $100 billion--20 years. You can take all the revenues from all the people in the State of New Hampshire and wipe them out for the next 10 years in order to pay for this year's increase in the Federal Government. That is a lot of money, but it is not enough for the other side of the aisle. No, no, no. They have to raise taxes. They have to increase spending because they have to put out their press releases to say that they were concerned about this group or they were concerned about that group. Well, I have to tell you, a $2.6 trillion budget shows a lot of concern for a lot of different groups. What we should be concerned about is the American taxpayer. So to make the representation that somehow the American people are undertaxed and we need to raise taxes or that somehow we are not generating significant revenue increases in this economy as a result of having cut taxes is simply inaccurate, in my opinion. Now, to move on to this specific amendment which raises the issue of Social Security, the practical effect of this amendment would be to essentially say the Federal Government can do nothing until it solves the question of Social Security--that is the practical effect of this amendment--unless we had 60 votes, which around here is pretty hard to get for anything. We can't even get judges through. I can imagine what we would do trying to get the Government to run. We can't even get judges appointed without using 60 votes. So it is pretty obvious that 60 votes is a very high threshold and essentially saying we are going to stop the Federal Government's progress in the area of giving tax relief. Interestingly enough, it does not say that the Federal Government will not continue to spend dramatic amounts of money. It is basically pointed at tax activity. It says new entitlements, but we all know it is not the new entitlements that are the issue. The expansion of the old entitlements is the issue. So it has a little bit of a disingenuousness to it in that it treats tax policy and then spending policy as dramatically different by essentially saying spending policy is OK, that is exempt, as long as it is on the book, but if it is tax policy and it is on the book and comes to an end, as it does under our rules, we will treat it differently. But independent of that, the practical effect of this amendment would be to bring the activity in a number of areas of governance to a halt until Social Security is determined to be solvent. This would be philosophically maybe a nice approach to take, but the problem with it is, from the other side of the aisle we have had no proposals--no proposals--to make Social Security solvent--none, zero, zippo. In fact, the other side of the aisle continues to refuse to engage in discussions about whether Social Security should be made solvent, which the President has initiated. They have essentially said: I'm sorry. You are alleging there is a problem. There is no problem. And we are not going to allow you to move forward even if there is a problem. So it is a little disingenuous, again, to take the position we should solve Social Security's problems before we do anything else as a Government and at the same time not be willing to put on the table any proposals to address Social Security's problems or even admit that Social Security has a problem, which would be the implication of the Senator from North Dakota in that he said that the scoring of the problem in Social Security was inappropriately arrived at because it used too conservative a number. I presume that means if a more aggressive number had been used, he would deem there was less of a problem with Social Security and maybe there was not a problem. Maybe that would solve the amendment if--maybe we could score ourselves out from underneath this amendment, actually, as I think about it. But independent of that, it does set up a conundrum that it essentially demands a solution to a problem which the other side claims is not a problem and will not allow us to move forward to a solution on, which in the parlance of American politics I think is called catch- 22. You cannot solve the problem because the problem is denied to exist, but you do not move forward until the problem is solved. It is an amendment that I believe has serious questions on that score. But independent of that, moving on to the question of how Social Security is structured and the problems which Social Security faces, this representation that the Social Security system is solvent through the year 2040, 2036, 2052--whatever the number is that people arrive at, depending on what assumptions are made--is theoretically correct but practically unsustainable because Social Security has no assets. The assumption that Social Security is solvent through that period assumes that Social Security has assets which are physical, but the only asset that the Social Security Administration has is an ability to call, to make a put, to be more accurate, to the American taxpayer to cover bonds which have been put into the fund. So once the cash that is being paid into the Social Security system falls below the benefits which are being paid out--and that begins to happen in about the year 2018--once that occurs, then there are no assets which the Social Security Administration can call down from like a stock in General Motors or a bond in--I don't know--some county in America. They do not have anything they are going to be able to convert, any asset they are going to be able to convert to cash to cover the difference. All they have at the Social Security Administration is the ability to say to the American people-- specifically, our children and our children's children because those of us in the baby boom generation will be retired at that time and getting the benefit; we will not be paying the taxes--to say to them: You are going to have to pay more taxes. That is the only asset they have, the ability to say to the American people--working Americans--that you have to pay more taxes in order to pay for the obligations that were incurred years ago by Social Security. So, yes, theoretically, they are solvent because there is this theoretical obligation that has been committed. But as a practical matter, the effect of that obligation is you are going to demand a much higher tax burden on working Americans. What does it work out to? We had testimony in committee that that works out to a doubling of the payroll tax on working young Americans. That is what that burden would cost in order to maintain the alleged solvency. You can get there, yes, but to get there, you have to double taxes on working Americans. That is what you have to do. Nobody will admit to that. That is what we are going to do to our kids--stick them with this huge tax bill on the allegation that that is an asset they have to cover that is in the Social Security trust fund and allegedly makes it solvent. The practical effect of that is it will cause our children and our children's children to have much less of a quality of life than we have had, because they are going to have to pay twice as much in payroll taxes. They are not going to be able to send their kids to college with as much ease as we have been able to, although it has been difficult for many. They are not going to be able to buy that first house. They are not going to be able to increase their education or do a lot of things with the ability we have had as a generation, because they are going to be paying so much higher a tax rate in order to support our retired generation. It is so intuitively obvious by looking at this fact that you have to wonder why everybody on the other side of the aisle is burying their head under this issue. The people who are going to create this huge tax burden for our kids are all around this room. It is everybody over 50 years old, and it is the largest generation in American history. It takes the American system and turns it on its head, because for years we had a pyramid system where more people paid more into Social Security than was taken out. By the time the baby boom generation--my generation--retires, that is not going to be a pyramid; it will be a rectangle. We are such a huge generation and so many will be retired that we are going to overwhelm the ability of the young people in this country to support us, unless we address this issue today. It is like that advertisement you used to see on TV for an oil filter that said: You can either pay me now or pay me later. When you pay me later, you are going to replace the entire engine; today you can just put in a new oil filter. That is the way the Social Security system is. You can ``pay me now or pay later'' when the baby boom generation retires, which will fundamentally undermine the quality of life of younger workers. It will affect their benefits so much. You are going to have to raise younger people's taxes so much. The unwillingness of the other side of the aisle to face up to this issue is, in my opinion, a failure on their part to address their responsibilities to people who are governing this country today. Yet we see amendment after amendment such as this one, which is an attempt to basically gain political cover on the issue. What we don't see from the other side is a willingness to step up and address the issue. Show us your plan. You have castigated and vilified and basically attempted to destroy the capacity of the President to address this issue time and time again. You have said he has been dishonest in his presentation and that his positions are going to harm America and older people in this country, when he specifically said, of course, it will not affect anybody over 55 and that it is voluntary. Yet have you come forth with a plan, proposed a plan, or suggested any remedy at all? No, you have not. You put out these amendments, which are for the purpose of political protection. You should be ashamed of yourselves. I yield the floor.

Mr. GREGG. I am sorry. I apologize. I ask if the Senator from Florida will yield to me for purposes of making a unanimous consent request.

Mr. GREGG. Mr. President, I didn't realize there was a unanimous consent in place. I apologize. Mr. President, I ask unanimous consent that at 2:15 today Senator Graham or his designee be recognized to offer an amendment on Social Security, the text of which is at the desk; provided further that at 3 p.m. today the Senate proceed to a vote in relation to the Graham amendment, to be followed by a vote in relation to the Conrad amendment on Social Security, to be followed by a vote in relation to the Republican Social Security amendment, to be followed by a vote in relation to the Nelson of Florida Social Security amendment, to be followed by a vote in relation to the Stabenow amendment on first responders. I further ask unanimous consent that all points of order be waived with respect to the Social Security amendments; further, that no second degrees be in order to any of the five amendments prior to the votes. I also ask unanimous consent that all debate time until 12:15 be equally divided between the chairmen and ranking members, or their designees, and further that debate from 2:15 until 3 p.m. be equally divided in the same form, and that any quorum calls be counted against the statutory time limit with time divided equally between the two sides. Further, that all votes after the first be limited to 10 minutes, with 2 minutes of debate equally divided after the first.