Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I rise to speak about health care and where we are going on the issue of health care here as a government and as a nation. The health care train is beginning to leave the station, so to say. I wish to make sure it is on the right track, that it not be on tracks which will lead it over a cliff. So I want to lay out a few fundamental tests that I believe need to be passed for health care reform to be effective. First, everybody needs to be covered. Everybody should have the right to get insurance in this country. That is a reasonable request, and it is a reasonable thing to do. The fact that some people don't have adequate health care coverage is not acceptable. Secondly, we need to have a system which encourages the marketplace to produce better products, more quality, better health care. We also need a system that doesn't let the government become too intrusive into the health care administration so that we don't end up with the government between you and the doctor and we have a system where the government basically creates such a top-down bureaucracy that you end up with rationing or significant delays in the delivery of health care, as occurs in some of our sister countries such as Canada and England. Thirdly, we have to have a system that encourages innovation and gives those creative minds out there in the health care field who are discovering new drugs and new ways to treat very serious illnesses the opportunity to do that, to get a reasonable reward for what they are doing, both monetarily and, of course, the great satisfaction of helping to cure people. We also need a health care system which says to the American people: You are going to get quality health care when you go to get health care, and you are going to get it at a reasonable price. So these conditions, these standards are things we should follow. As this train starts to leave the station, we are seeing a great deal of talk around here about how any health care that is proposed, if it is coming from the other side of the aisle, must be heavily laden with new government restrictions and new government directions, the most significant of which is something called a public plan. A public plan-- no matter how it is dressed up or what costume is put on it--has the same effect. It is a statement by the government that it is going to compete in the marketplace with the private sector for the delivery of health care insurance in this country. That is not fair competition. There is no way the private sector will be able to compete with a public plan; we know that. What we know is that a public plan is essentially a stocking horse for a single-payer plan. It is more than the camel's nose under the tent, it is the camel's neck, and probably front legs, under the tent on the effort to produce a singer-payer plan. It doesn't make a whole lot of sense for us to go into a single-payer plan, which is essentially nationalizing the health care system. We have seen neighboring nations have this experience, and their experience is not good. In your nationalized health care systems, such as in England, for example, about 78 percent of the women who get breast cancer survive. Here that percentage is around 92 percent. The difference is because in the United States detection occurs early. In England, unfortunately, because they have a public health care system, which essentially involves delay in the ability to get treatment, people are not determined to have that illness early enough to cure it effectively. You see that with all sorts of diseases. In Canada, you may not be able to get hip surgery if you are over a certain age--certainly not in time to have your lifestyle improved. The simple fact is, a single-payer plan inevitably leads to delay in the delivery of care and also rationing. In addition, of course, it leads to massive bureaucracies, inefficiency, and a reduction in quality. It drives out of the market people who create new products, the new research, the new drugs, because you are basically setting a fixed return on what a person can make if they invest in producing a new drug, and the production of new drugs is a very expensive business. It costs almost $1 billion and 12 years to bring a new drug to the market. It is extremely expensive. If you cannot get a reasonable return on your money, you are not going to be able to get investors. If your investors are looking at that and saying the government may step in and fix my return and change the years of exclusivity and create a formulary to determine how and what drugs can be sold and who can buy them and ration those drugs, that does not work. It reduces research, and therefore quality, and it reduces the ability to get good health care. A public plan should be a nonstarter. It should never happen. I have proposed--and I think we should be proposing formal ideas; we have not heard formal ideas from the other side of the aisle yet and I hope we will get some soon--I have sat on a number of bipartisan groups, which have been constructive, especially the Baucus group has been very constructive, but we still don't have anything formal coming out of that group. The same is true with the HELP Committee, under Senator Kennedy--and from the administration, for that matter, we do not have anything formal. I think we have an obligation to lay down the specifics on what we want to do. I proposed ``CPR.'' That is the title I have given the proposal: Coverage, Prevention, and Reform. Essentially, it will set up a system where every American will be required to get health insurance, and we will have affordable health insurance for low-income Americans, people under 300 percent of poverty or less. They will have assistance to get health insurance. The insurance will be focused on the biggest concern for most Americans, which is when someone in your family gets sick or has a severe accident and your entire economic lifestyle has changed and, in fact, maybe you are wiped out and bankrupted by that event. Essentially, this proposal will make sure everybody in this country has meaningful health insurance, so they cannot be wiped out by a medical event. Secondly, this proposal is focused aggressively on the issue of prevention. It changes the HIPAA rules so employers can put more money into giving people incentives to live healthy lifestyles. That is critical to our society. We have diseases in this country that can be addressed through improving lifestyles. We have seen that, and a lot of companies have been successful in this area--in the area of obesity, which is a severe problem, and with diabetes and other huge costs to society, we can change the impact of those costs and those very detrimental health problems through a better lifestyle. We should incentivize that--monetarily incentivize that. That is what my proposal does. In addition, the proposal incentivizes people to take preventive action relative to screenings and to getting early health care intervention, rather than late health care intervention. It does it through financial incentives. That is the best way to do things--pay money for being thoughtful and healthy. Third, it looks at the system of reimbursement and says this is a chaotic system in this country, where we have stovepipes branching off everywhere. We need to have a system that reimburses, first, for quality, rather than simply for procedures, and one that says if you are delivering quality care, you will be reimbursed--especially if you are delivering quality care at less of a cost, and you are going to get a benefit for that--the providers will. We have seen study after study, now over a period of 20 years--most done by the group at DARPA--which has shown us it is not an issue of cost that produces quality, it is an issue of those who are performing the procedures. We know, for example, that in some parts of the country it can cost 50 percent more to get a certain procedure, and you will have 20 percent less of an outcome than if you go to other parts of the country. For example, if you go to Mayo Clinic, it will cost less to get one procedure, and you will get a better outcome than if you go to a hospital in southern California, where it costs more and you get less of an outcome. It is the same if you compare Florida and Washington State. If we incentivize quality and reasonable costs, we know we will get better quality and lower costs. We also know we have a haphazard procedure around here on how we have deductibles relative to Medicare and the various parts of it. Nobody knows what their deductible is because it changes depending on what type of treatment you are getting--Part A, B or D, whatever. We should standardize those and get more efficiency into the health care system. How do we accomplish this? If you are going to get everybody in the system, you have to basically require that everybody be in the system. We have 47 million uninsured people. Of that number, 20 million can buy their insurance. They have incomes up to $75,000 or more. But they choose, as a matter of lifestyle, not to insure themselves. A fair amount of people--the other 27,000 people--either don't have the wherewithal or they are with companies that are so small they don't have the wherewithal to supply health care. What I am suggesting is that everybody in America has to buy health insurance--the coverage I talked about--meaningful health insurance, with a heavy emphasis on prevention and reform. If you cannot afford it, then we will help you buy it. But you have to buy it. It is an individual mandate. This is an approach that I think will work. It doesn't require that we throw the baby out with the bathwater. It doesn't require that we entirely rewrite our health care system in this country to satisfy those who want to run the health care system out of the government. It is not a nationalization of the health care system, not a single- payer or a public plan system. There will be innumerable competing insurance products out there for people to buy in order to meet these standards of coverage--innumerable. They will be settled by the marketplace. People will have choices. States will have an exchange program, and you will be able to see everything available to you and quickly decide what is best for you as a family or an individual. It is not an attempt to totally rewrite the health care system. It is an attempt to build on the present system, and it recognizes we have weaknesses, such as the fact that 47 million people are not covered and that we actually disincentivize preventive medicine and a healthy lifestyle under HIPAA and such that we have a reimbursement system that makes no sense and is chaotic and has grown up, over the years, as a result of the bureaucratic machine that would make Rube Goldberg seem simple. Take the strength of our system--we have private sector initiatives going on that are creating better health care, which doesn't cause people to have to suffer massive delays and doesn't create rationing in the marketplace, depending on your age, and doesn't put the government between you and your doctor. That is a good health care system, and we should not throw it out by going to a public plan, a single-payer system. We should build on the health care system we have and bring those who are not covered into it and bring all of us into an attitude of living healthier lifestyles and focusing on prevention, quality, and reform; thereby promoting research and better health care. That is my proposal. I don't expect this proposal to win the day, but I hope it will be listened to as we go down the road because this is a huge issue. Seventeen percent of the American gross national product is spent on health care. We don't need massive amounts of money in health care. We spend 6 percent more of our gross national product than the next closest nation. There is a huge amount of money moving around in our system. We need more quality at a more reasonable cost. In addition, a lot of people are quite happy with their health care system, with what they are provided by their employer--usually. Why should we throw them out the door too? Let's address that. What we need is to look at the system we have, its strengths, and build on those strengths. We need to look at its weaknesses and reform them. I know my proposal will help accomplish that, and I hope it will be taken seriously. I yield the floor and suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Mr. President, this is one of those issues which looks easy on its face because it is politically simple to synthesize and state, but it is not easy; it is a complex issue. Obviously, anything that has an initial around here in a foreign organization can be easily attacked. The idea of American dollars going to support organizations which have initials, and they are foreign organizations, often gets attacked. But in this instance our national interest is of our concern, our primary concern, and is benefitted by the decision made to carry out our responsibilities relative to the IMF. How does this work? The International Monetary Fund is essentially an organization set up by the United States during the Bretton Woods Conference in the post-World War II period, the purpose of which was, and is, to have a backstop for countries that get into very deep fiscal problems and to have a place where the rest of the world can go together in the industrialized world and basically meet and support individual countries which have problems. It is actually an opportunity for us as a nation to share the burden which, in the post-World War II period, has fallen primarily to us, to try to stabilize the world economy. That obviously benefits us a lot. We are the biggest trader in the world. We export massive amounts of goods. Dramatic proportions of American jobs are tied to our capacity to export, and having a stable world economy is critical to our capacity to keep our economy going. That is why we set this up. It was pure, simple self-interest, to set up an international organization to help us stabilize other Nations that run into trouble. We are now in the midst of, obviously, a worldwide recession that is deep, it is severe, and we felt the brunt of it in the United States, and other nations across the world are feeling it also. Some are in much more dire shape than we are. The issue is, how can we try to avoid an international meltdown, countries failing and bringing down other countries with them, and how can we benefit ourselves by maintaining stable economies around the world? Well, one way to do that is to have an international organization such as the IMF which steps up and essentially tries to catch the dominoes before they fall. There are countries in this world that are going through deep economic problems, even more severe than ours, which is hard to believe because ours is so severe. If those countries fail to be able to maintain their debt, their sovereign debt, and the leveraged debt of their banking systems, and if they fail as nations, then other nations that have lent to those nations will follow them into failure. A lot of these nations are in Eastern Europe, a few of them are in the Western Hemisphere. We have already seen two instances of this in Iceland and Ireland, and we know the situation is tentative. In fact, just today it was reported that even the British debt, the United Kingdom debt, may be downgraded. So the IMF is sort of our primary backstop in the international community to try to avoid that type of event occurring, where one Nation fails on its sovereign debt, or its major banking debt, and it brings down a series of other nations that have lent to it. The IMF has said, and it was agreed to by all of the countries participating in the IMF, that it needed more resources to be able to be sure--although nobody can ever be sure in this economy--in order to be reasonably sure that if a fairly significant nation has very serious problems, it can step in and try to help stabilize that country's situation, so that country does not take a lot of other countries with it as it defaults on its debt. This agreement was reached in concert, not by us alone but by a whole group of nations. So rather than the United States, for example, having to step in and unilaterally take action in, say, one of our neighboring countries, as we did in the late 1990s, this allows us as a nation to join with other nations and pool, basically pool a large amount of resources, to have them available here, for the opportunity to avoid such a meltdown. We put in about 20 percent, other nations--Japan, Germany, England, other industrialized countries--put in the balance. The IMF is calling for $500 billion essentially. Actually, it works out to $750 billion when you put in the special drawing rights, $750 billion of capacity to be able to have that type of resources available to stabilize various nations around this world should they get into serious, severe trouble. You can follow the proposal of this amendment as essentially saying, the United States does not want to be part of this effort. We are going to back out of this responsibility or this--you do not even have to claim it as a responsibility, this action, because we basically are going to retrench from here within the United States and not participate in this sort of international effort to try to stabilize other economies because we need our money. We need it here, now, and we cannot afford to do that. That, in my opinion, is extraordinarily shortsighted. That is like cutting off your nose to spite your face because let's face it, if an East European economy goes down and it takes with it two or three other East European countries, and that leads to even some major Western European economies going down, who is the loser? Well, those economies obviously. But I can tell you a lot of American jobs are going to be the losers. That type of economic disruption, that type of economic Armageddon as it was described by one of my colleagues who actually supports the DeMint amendment, would come back to affect us dramatically. So what is the price of avoiding that, or hopefully avoiding it? What is the price of at least having in place an insurance policy to try to avoid that? Well, the price is, for us to put up no money, we are not putting up any money. We are putting up what amounts to a letter of credit to the IMF that says: All right, you now have a letter of credit from the United States for $100 billion. You have a letter of credit from a variety of other nations around the world for another $400 billion. You have $500 billion of letters of credit, so if you have to go into a nation, because their banking system is on the verge of failure, and because they do not have the ability to monetize their debt the way we do--in other words, they do not have a central bank that can print money because they do not have a world currency--you are going to have this type of support to try to stabilize that country so it does not become a domino affect on all of those other nations that may have lent to it, including us. That is an insurance policy. Does it mean even if the IMF had to take that step and go into that country and invest that we would lose those dollars? No, we would not. In fact, we will not lose those dollars. We have never lost a dollar through the IMF. We have always been repaid everything. Not only will we not lose them because the country they are lending to is a nation, and probably a fairly sophisticated nation because they do not do too many nations that are not sophisticated, we will not lose it because the IMF has a massive gold reserve that essentially backs up all of the dollars, all of the money that is there. So it is not a risky exercise. That is why this effort does not score as $108 billion. There is no game being played about the $108 billion number. The simple fact is, the $108 billion number does not score because there has never been an outlay to the IMF. You can make an argument that even the $5 billion--that is what CBO came up with as a number, and I think that was based on the assumption that there might be some interest costs, but even the $5 billion is wrong. Zero is the right number. Certainly a representation that $108 billion is what it is going to cost the American taxpayers is totally inaccurate. It is playing with facts fast and loose because we never had lost any money. All the lending of IMF is basically securitized, either by the debt of the nation they are lending it to or by their own gold, the gold of which they have a huge accumulation. So this is not a cost of any significance to the American taxpayer. What it is, however, is an extraordinarily cheap way for us as a nation to lay off the burden to other nations, other industrialized nations; lay off the burden of making sure that countries which would represent a very serious problem to us and to the world community should they fail financially, a very cheap way of trying to have in place a system to avoid that.

Mr. GREGG. So, from my opinion, this is an amendment which is not constructive either for our economy or for the international situation. I would hope it would be defeated.

Mr. GREGG

Mr. GREGG. Mr. President, this morning Secretary of State Hillary Clinton appeared before the State Department, Foreign Operations, and Related Programs Appropriations Subcommittee to discuss the fiscal year 2010 budget request for America's international affairs programs and operations. We had a productive discussion on the numerous and extraordinary challenges that our Nation faces in the world today. During the hearing, I brought up the plight of Burmese democracy leader Daw Aung San Suu Kyi, who faces criminal charges stemming for an uninvited visit by an American citizen to her compound in Rangoon, a compound on which she has spent 13 of the last 19 years under house arrest. These charges are absurd and have been roundly, and appropriately, condemned by the international community. Unfortunately, this is not an isolated incident but merely the latest attempt by General Than Shwe and the State Peace and Development Council to persecute Suu Kyi and her National League for Democracy party. I regret that General Than Shwe has made clear his complete and total disinterest in improving Burma's relationship with the United States. It is apparent that any open hand will be met with a clenched fist. The resolution my colleagues and I offer today recognizes the continued injustices in Burma, and it states unequivocally that we deplore and condemn the show trial of Suu Kyi. The resolution sends a clear message to Suu Kyi and her supporters that the Senate remains squarely on the side of freedom and justice in Burma. I agree with Secretary Clinton that more can and should be done on a bilateral and multilateral basis to secure the release of Suu Kyi and all prisoners of conscience in Burma today. The resolution calls for the Secretary to reinvigorate such efforts, and I intend to continue to work with her in support of human rights in Burma.

Mr. GREGG

Mr. GREGG. Madam President, I rise to speak about the dire situation of our fiscal house and the Federal Government, which has been confirmed and reinforced by the recent trustees' report on Social Security. We are in big trouble as a nation because of the amount of debt we are running up. This President has proposed a budget that doubles the debt in 5 years and triples it in 10 years. He proposed a budget that runs, on the average, a trillion dollars of deficit every year for the next 10 years--4 to 5 percent of GDP in deficit. In fact, this year the deficit will be almost $2 trillion and it will be almost 13 percent of GDP--staggering numbers, numbers we have never seen as a nation except during World War II when we were fighting for survival. These numbers add up to debt that is unsustainable and cannot possibly be repaid by our children and therefore will create an atmosphere for our children and our children's children where our Nation will not be as prosperous or as strong as it was when our Nation was passed on to our stewardship. These problems are only massively compounded by the report that came out yesterday from the Social Security trustees because they pointed out that the Medicare trust fund is going into a negative cash flow situation and the Social Security trust fund will soon go into a negative cash flow situation. What does that mean? Well, in the last 15 or 20 years, we have basically been financing our Government by borrowing from the piggy bank of Social Security and using that money to operate the day-to-day costs of the Federal Government. What the trustees are telling us is that the piggy bank is broken. It has been smashed. It no longer has any money in it. It is not going to take in money that exceeds the amount of money it has to pay out. In fact, we are going to have to borrow money now in order to pay Social Security benefits beginning in 2016 and Medicare benefits right now, this year. This chart reflects the seriousness of the situation. If you take just these basic mandatory programs--Social Security, Medicare, and Medicaid--the cost is escalating on a steep upward slope. By around the year 2025 or 2030, these three programs alone will absorb all of the money the Federal Government has traditionally spent on all of the programs of the Federal Government--20 percent of GDP--and then they go up. It is projected that toward the middle of this century, Social Security, Medicare, and Medicaid will literally bankrupt our Nation by themselves. That says nothing about the basic underlying budget, which is expanding so dramatically under this Presidency. The debt of this country under President Obama's proposal and budget, because of spending in these three accounts and because of the new spending the President proposed in all sorts of other accounts--massive expansions in the size of Government, where the debt of the Federal Government just goes up and up, to the point where it will represent, at the end of President Obama's budget, 80 percent of the gross national product. Today, the Federal debt is about 40 percent of the gross national product, down here, but after the spending spree of President Obama and the Democratic Congress, it will be 80 percent of the gross national product. We will be in a position where we cannot get out of the hole. Usually, when you dig a hole that is too deep--and we are deep in the hole already, by the way--you stop digging. That is the old adage. If you are digging a hole and you are underground, you stop digging. We are not going to stop digging as a government. What the President and the Democrats are suggesting is that we bring a backhoe into the hole and dig twice as fast, so that we go even further down into the negative, into debt. That is not sustainable. It is not survivable for our kids because they are going to end up with costs and deficits that far exceed their ability to be able to manage. The Medicare system alone has an unfunded liability of $37.8 trillion. When you throw in the Social Security system on top of that, you are talking about unfunded liabilities of over $42 trillion. What are the implications of that? If you took all the taxes paid in the United States since we were formed as a nation, since we began our Government and started to collect taxes, we have paid less in taxes than we have in obligations on those two accounts. If you took the net worth of every American--all of our homes, cars, and stock--and you added it all up, we have a debt on the books for the purpose of paying for the programs that we know already exist under Medicare and Social Security--we have a debt that exceeds the net worth of the entire country. That is the definition of bankruptcy, by the way--when your debt dramatically exceeds your assets. In fact, by the 10th year of this budget, as proposed by President Obama and passed by the Democratic Senate--without any Republican votes because it is such an irresponsible budget--the interest on the Federal debt alone will be $850 billion. To try to put that into context, the interest on the debt will actually exceed what we spend on national defense. It will exceed by a factor of 4 or 5 what we spend on education and on transportation. So we will be putting more money into paying interest. By the way, to whom do we pay this interest? We pay it to the Chinese, to the Japanese, to Southeast Asian countries, and, obviously, to the Arab and oil-producing countries. We will be paying more interest to those nations--more American hard-earned dollars will go to those nations to pay interest on our debt--than we will have available, what we will be able to spend on our own national defense. Does that make sense? No, it doesn't make any sense at all. Plus, it is not supportable. There are only two things that can happen to our Nation. When you run up the debt in the manner in which this deficit is proposed and in the manner these deficits will do under the budget passed here, when you look at the debt and the serious financial situations of Social Security and Medicare, there are basically only two things--unless we take action on controlling spending now--that can occur. One is that you devalue the dollar and inflate the currency. That is sort of a combined thing. You basically take the value of the American currency and inflate it. That is the cruelest tax of all. That says to people who have savings that they will find they are worth less the next day because of inflation. It says to the people who want to buy things that they can buy less because of inflation. Inflation is a massive tax on working Americans. That is one way you get out of debt, you inflate it. The practical effect of that is that people won't want to buy your debt. If they know inflation is coming, they won't buy your debt. Why give you $1 billion to buy a billion dollars of American debt knowing that you are going to pay them back in inflated dollars? If they are going to give you a billion dollars, or lend it to you, they are going to require much higher interest rates than we presently have to pay because they are going to have to anticipate inflation and the fact that the value of the dollar will be reduced and that the value of the debt they just bought will be worth less. So inflation has a lot of very bad ramifications. But how else do you get out from underneath the debt? The other way is to massively increase taxes on all Americans. This euphemism that we are just going to tax the rich--you cannot do it by just taxing the rich even if taxing the rich is something you want to do. On the other side of the aisle, they claim they are going to raise the rate on high-income Americans from 35 percent up to an effective rate of about 41 or 42 percent, as proposed by the President. These high-income Americans, making more than $250,000, are the majority of the job producers in America. Most of the jobs in America are produced by small businesses today, and almost all of those small businesses would be hit with this additional tax rate. So what happens to the small business, that mom-and-pop activity in New Hampshire, which is suddenly starting to grow? Maybe they have 10 employees and they want to add 12 or 15 more, but they cannot do it because they have to take their money and put it toward paying taxes. They are not going to be able to put it toward adding more jobs, which would be much more beneficial to us than having the money come to Washington and having the people in Washington decide how to efficiently spend it. It is spent much more efficiently by small business. It is not like they are undertaxed. A 35-percent tax rate on a small business means they are taxed more than any other people in the industrialized world for small business activity. Most corporate taxes and business taxes in the world average out around 20, 19, 15 percent. In the United States it is 35 percent, if you are an individual or a subchapter S corporation. Now they are talking about taking it up to 41 percent under the proposal from the other side of the aisle. That is their plan for taxes. This is tax the rich. Even though for the most part this is small business and it will cost us jobs--fine, let's accept the tax-the-rich argument. How much money do they get from that? Not very much, compared to what they are talking about spending. They, the other side of the aisle, are proposing increasing spending by over $1 trillion on the discretionary side--that is education and things like that--and over $1 trillion on the entitlement side. The revenues from this tax increase are about one-fifth of that spending increase, maximum one-fifth--and that presumes that wealthy people are not going to be smart enough to go out and figure out ways to avoid taxes, which is what people do who have accountants when their tax rates go up. They figure out a way to invest so they do not have to pay their taxes at such a high level, legally, by investing in things that are tax avoidance vehicles. It is not a very efficient way to manage the economy. We would rather have people invest in a way to get the maximum return because that creates the most productivity in society, which promotes the most jobs, but what happens is people invest not to create jobs and create return, they go out and invest to avoid taxes, which is a very inefficient way to spend dollars. But let's accept the theory this is all acceptable, that we should go out and tax the rich because it is a good political statement and makes a nice TV ad and that will address the problem. It does not. We still have a debt curve that goes up essentially on the same pathway because this pathway of debt assumes--this debt assumes this tax increase on the wealthy. What is the other option besides inflating the economy? It is to tax everyone at very dramatic rates. What is the practical effect of that? If we tax all working Americans in order to pay off this debt--and remember what this debt is being used for. It is being used to expand the size of the Government. The President has been very forthright about this. He says: I believe, by dramatically growing the size of the Government--I heard this today on NPR, which I found was very appropriate since they happen to be a Government-funded agency--by dramatically expanding the size of the Government, you can create prosperity. That is the argument of the President. That is the argument of the NPR's commentator today. I am thinking to myself--explain this to me. Take the debt of the United States up to 80 percent of GDP, run deficits of $1 trillion a year for the next 10 years, and we are going to create prosperity? We are not going to create prosperity. We are going to create a momentary blip in the activity of the Government in the private sector--not momentary, a permanent blip. And we are going to significantly increase the size of the Government and maybe we will create some Government jobs, but in the end what we get is a massive expansion in debt, a massive expansion in deficit, and a commensurate expansion either in inflation or in taxes, which have a huge dampening effect on prosperity. We don't create prosperity by increasing inflation. We don't create prosperity by creating a nonproductive workplace where capital is being invested, not for the purposes of efficiency but for the purposes of avoiding taxes. Basically, what we are absolutely guaranteeing when we are running up this type of debt is that we are not going to get prosperity. We are going to get a weaker economy, a less prosperous country, and a country that is not as strong. These numbers that came out yesterday from the Social Security trustees only highlight, in a most devastating way, how significant our problem is. If we fail to take it on, if we fail to address this issue, if we continue on this path of just spending money as if there is no tomorrow, there will be no tomorrow for our children because the burdens will be so high and so extreme from all the costs of Government, and especially from the burdens of these entitlement programs. What is the answer? To begin with, yes we are in a tough fiscal time right now, and we have to spend money that we do not want to spend in order to try to get things going. But let's acknowledge the fact that this recession is not going to go on forever. Hopefully, there are some lights at the end of the tunnel and some glimmers that things are turning around, and we all hope that is going to occur and it appears it may. The Federal Reserve Chairman thinks it will. As we move out of this recession, we should not continue to spend as if we are in a recession. Rather, we should draw back on the spending we put into the system. We should start to take some of that spending back. All of the spending programs that came in the stimulus should have been sunsetted so these programs end after the recession is over, 1\1/2\ years from now, or maybe 1 year from now. But that is not the plan. The plan is to build all of this spending into the baseline and have this spending go on for as far as the eye can see, and that is why the President's budget expects to have a $1 trillion deficit as far as the eye can see, or at least as far as the budget window--10 years. Then after retrenching on the spending that is being proposed just in the short term, saying: Let's stop this spending when we get out of the recession, let's start curtailing this spending, let's go back to the former spending patterns of the Government--which were not very good to begin with but at least a lot better than what is being proposed now. Let's put someplace some strict fiscal discipline. Let's freeze discretionary spending for 1 or 2 years after we move past this recession--in other words, in the year 2010, 2012, 2013. Let's also, at the same time, look at these entitlement accounts and see how we can put them on a more sustainable path. That means making some courageous decisions around here. We proposed--myself and Senator Conrad--a way to accomplish that because we know the political system does not inherently allow people, members of the Government who have to run for reelection, to make the tough decisions on these programs that affect everyone. We know that. We know it is very hard for somebody to stand up at a town meeting and say we are going to raise the age of retirement in Social Security; we are going to change the ways we calculate COLAs on Social Security. No, that is not the way these things are discussed around here. That is not possible in a political climate. We accept that. Why not set up a procedure which drives a good policy, which we can vote on and everybody can sort of hold hands and go at the issue together? That is what Senator Conrad and I have suggested. It is called the Conrad-Gregg Commission, except in New Hampshire where we call it the Gregg-Conrad Commission. Actually, what it does is set up a process where a group of people who are very knowledgable--with a majority, by the way, from the majority party--sit down and figure out the best ways to try to bend this curve a little bit. Hopefully, more than this. See, this is the current baseline, the blue one. Hopefully, we can get it back to the current baseline and get under control the rate of growth of these entitlements so they do become, at least if not immediately affordable, over a long period more affordable. We do this on a fast track. We do it without amendments. We require an up-or-down vote and require supermajorities so everybody is protected, everybody knows it is fair. It gets to the underlying issue which is how to control the rate of growth of spending. I recognize I have been sort of a Sisyphus, pushing a rock up a hill in this position, and I have not gotten to the top of the hill yet. But I am not alone on this concern. The chairmen of the Budget Committee in both the House and Senate have both said that these outyear debt patterns of their budgets are unsustainable. Those were not my words. The Director of OMB, the President's Office of Management and Budget, has said these outyear numbers are unsustainable. The Secretary of Treasury has said these outyear numbers are unsustainable. We cannot have a debt-to-GDP ratio of 85 percent. We can't have deficits of 4 to 5 percent annually. We cannot do it and have a sustainable Government. We end up turning into a banana republic if we continue on this path where we basically self-implode through inflation or excessive taxing. The international community is starting to comment on this. The head of the Chinese Federal Reserve--a different title but the same position--has raised his concerns about it, as has the premier of China. After all, they are our biggest lender. If the person who lent you the money for your credit card comes to you and says: I am a little concerned about the amount of credit you are running up. I am a little concerned about it. You ought to listen to that person because that is the person who is going to lend you the next dollar. Regrettably, we are in that situation whether we like it or not. This is a real discussion about the real problems we confront as a country, and the trustees report should be listened to. There was one specific suggestion in the trustees report that we in the Congress were supposed to do. The trustees report says when it is projected that the Medicare trust fund will have to be supported with more than 45 percent of the general funds of the Government--in other words, the Medicare trust fund is supposed to be self-insured. It never has been, but it is supposed to be. It is not supposed to be general funds, which is general taxation, to pay for it. So 5 years or so ago we put in that language that said if over 45 percent of the support funds comes from the general fund so it is no longer an insurance event, so people who are paying into their HI insurance are no longer supporting anything more than 55 percent of the cost of the fund--at that point the trustees notify Congress and the President that this is going to occur within the next 7 years, and we are supposed to, by our own statute, receive from the President directions as to how to bring spending or the cost of the trust fund down so that the general fund will not be invaded by more than 45 percent. President Bush took this to heart. He sent up two proposals to accomplish that, both of which were fairly reasonable. The first one was, the people who take part in the Part D drug program should have to pay a percentage of their premium for that program if they are rich, if they are well off. In other words, people working in a restaurant in Epping, NH, today are fully subsidizing the Part D premium of, for example, Warren Buffett. That makes no sense, does it? So if you have a fair amount of income, you should pay a larger--some percentage at least of your Part D premium. President Bush suggested that. Another approach, he said, was there are a lot of savings occurring in the health care industry today based mostly on technology advances. We would like to share the rewards of those savings with the people who are getting them. Today, 100 percent of the savings goes to the health care industry. President Bush suggested that we take half of those savings and put them back into the Medicare trust fund. Those are very reasonable proposals, both of those. They were both rejected by the Democratic Congress, a Congress controlled by the Democrats. Both were rejected by the Democratic Congress. Now it is President Obama's turn to send us some ideas for how we keep the cost to the general fund of the trust fund of Medicare below 45 percent. But what has happened? Total silence. Total silence. Nothing has been sent. No proposal has been sent. No endorsement of any proposal has been sent. Interestingly enough, and to his credit, President Obama suggests in his budget the same proposal on Part D that President Bush proposed, which was that wealthy people should pay some percentage of the cost of their premium. So one might think they would send that proposal as a free-standing initiative, at least that one, as a way to address some of the costs which are being generated and being borne by the general fund. But we have not heard that. It is ironic, of course, that President Obama has that proposal in his budget and is not willing to send it. It may be that because Congress, under the Democratic leadership, rejected this idea 2 years ago, that they believe it will be rejected again. But let's at least take a run at it because it is a good idea, and it is very appropriate. It should be done along with some other ideas because we have this responsibility, under our own rules. There are rules. We set them up. We said if the general fund is going to be invaded by more than 45 percent we have to come up with some way to correct that. So we ought to at least live by that. There are some ideas as to where we should go from here, rather than allowing this debt to become so excessive that, for example, it got so high that we become so irresponsible as a nation in the area of debt that we couldn't even get in the European Union. That is an irony, isn't it? When this debt gets up over 60 percent of GDP, which it may well, probably in the next 2 years, at that point the United States would no longer qualify for entry into the European Union. Because those industrialized States said: That level of debt is irresponsible. A government that has that level of debt is so irresponsible that we do not want you in the European Union. In other words, Latvia or Lithuania could get into the European Union, but the United States could not. Not that we are going to apply. But that is a pretty good place to look for a standard, is it not? They are industrialized nations. So we need to take some action. We need to listen closely and read closely the trustee's report, because it is telling us we are in deep trouble. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, this amendment is appropriate to this bill because, after all, we are talking about credit in this bill, and the credit of the United States is obviously a severe issue for all of us, and we need to address it. This amendment simply gives the American people a better opportunity to learn what is happening to their Government and how much debt is being run up on them and their children. It is an issue of transparency and openness in our Government. The debt is the threat, and it is one of those occasional, brilliant ideas that come along every so often, so everybody should vote for it. Thank you, Mr. President.

Mr. GREGG. Mr. President, I move to waive section 302(f) of the Congressional Budget Act of 1974 and ask for the yeas and nays.

Mr. GREGG

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

Mr. GREGG. Mr. President, I ask unanimous consent to speak for 5 minutes on an amendment I intend to offer but I will not offer at this time.

Mr. GREGG. Mr. President, I have an amendment which I intend to offer at the proper time. I understand there is a bit of a parliamentary issue right now relative to amendments. I intend to offer an amendment dealing with the issue of debt. Obviously, this is a credit card bill, and debt is the topic of the day. But I am talking about the debt of the United States. One may say: How does this affect the credit card bill? The interest on credit cards is driven in large part by what it costs to get money, and what it costs to get money is driven in large part by how much debt the United States has to finance every year. We are, unfortunately, in a situation where we are financing a massive amount of debt. Regrettably, a lot of that debt is the result of the fact that the Government has had to move in and basically be the force for liquidity in our economy, and thus the deficit has been driven up dramatically. The President estimated the deficit this year to be $1.8 trillion. This is a massive number, almost incomprehensible for most people to understand. It represents four times more than the highest deficit I have ever seen. More importantly, it reflects the fact that for every dollar we are spending in the Government today, 50 cents of it is borrowed, essentially. So we are borrowing half the money we are spending. That is a lot of debt. That adds to what is known as the national debt. Right now, the national debt is about 40 percent of the gross national product. That is a survivable event, but after this deficit this year, it is going to move up significantly. Unfortunately, under the budget the President brought forward, it is projected that there will be $1 trillion of new deficit every year for the next 10 years. The practical implication of that is the national debt grows astronomically. In fact, it doubles in 5 years, triples in 10 years, and at the end of 10 years, we will have a national debt which is 80 percent of the gross national product. To try to put that in context, because those are all just numbers, if we as a nation wanted to get into the European Union, they have certain standards where they say you have to be a responsible country in your spending, how much you are spending and how much you are borrowing. Two of the standards are that you cannot run a deficit that is more than 3 percent of your gross national product, and the second is, you cannot have a national debt that exceeds 60 percent of your gross national product. This year, we will run a deficit that is 12.5 percent of our gross national product and we will have a national debt that is 40 percent and going up. It will become 80 percent in a brief period of time. So under the rules of engagement for joining the European Union, we would not be allowed in. Can you imagine, the United States could not get into the European Union, but Latvia or Lithuania could? Obviously, we do not want to be in the European Union, but when the industrialized part of the world sets a standard for responsibly governing and we don't meet it, then something is fundamentally wrong. What is wrong is we are passing on to our children a deficit and a debt which is unsustainable, which means essentially they will not have the type of prosperity we have had. It means they will have to pay so much in the way of maintaining the cost of the debt that they will be unable to afford buying a home, sending their kids to college, or living the quality of lifestyle our generation has had. It is not fair for one generation to do that to another generation, and it is especially not fair to do it in the dark of the night where the American people do not know what is happening, where they do not have the information needed to make intelligent, thoughtful decisions on how fast they want this debt on their children to go up. This amendment is an attempt to basically have full and fair disclosure of what is happening with our national debt, how big it is getting, how much it is going to cost, and who is going to have to pay it--the American people. It has three basic elements. The first one is that there is a point of order created in this bill against any spending, any revenues or any appropriations legislation which doesn't have as part of its statement what effect that has on the national debt--in other words, how much it is going to add to the national debt--and what effect it has on every American in responsibility for that debt. For example, the budget that was passed-- the President's budget, which I didn't vote for but which was passed anyway, the President's budget will increase the debt on every American household by $133,000--$133,000--and it will increase the interest which each American has to pay on that debt by $6,000. People should know that, in my opinion. That should be fully disclosed. If we are going to have full and fair disclosure, and we should, of what a person's credit card obligations are and what a bank requires in the area of interest payments and what a bank requires in the area of payment standards and how they can change interest payments, we should have full and fair disclosure to the American people of how much their debt is because they are American citizens and how much interest they have to pay on that debt because they are American citizens. Because in many instances, $6,000 of annual interest cost to pay off the Federal debt will exceed a lot of people's payments on their credit cards, and $130,000 of debt per household exceeds, in many instances, the mortgage on a lot of people's homes. People should know the type of debt and deficit that is being loaded onto them by this Government, which is massively expanding the spending of the Federal Government. The first item says there will be a point of order, and unless a bill comes to this floor and is open and transparent on the issue of how much debt it creates per household and how much gross debt it creates on the American people, it will take 60 votes to pass that bill. It will be subject to a point of order. The second amendment will be to formally disclose this information by using the IRS, by putting in place a system where in the IRS instructions for your 1040 form you will be informed of how much debt is owed and what the debt is per person in this country. You will be kept posted as a citizenry to suggest what is happening to you and your country relative to debt and deficits for which you have to pay. The third item, in order to keep people informed and have transparency, will require that every home page of every Federal agency must have what is known as the debt clock, which shows how much the debt is going up on a daily basis. So that if you are trying to find some program at HUD or trying to find some program at the SBA or trying to find some program at transportation, when you go on that site, you will be informed immediately as to what the debt of the United States is and how much it is going up. This is fair and transparent and it is appropriate. Remember what is driving all this debt, and I think that is important for people to understand. This debt is being driven primarily by a massive expansion in spending. The President said--and I admire him for his forthrightness--that he believes you can create prosperity by dramatically growing the size of the Federal Government, by increasing the spending of the Federal Government. In his proposal, under his budget, it will take the spending of the Federal Government from 20 percent of gross national product up to 23, 24, 25 percent of gross national product. Those are huge numbers in the way of increase. We have never had that type of spending level in this country, except during World War II. Historically, the spending of the Federal Government has been about 20 percent of GDP, not 21, not 22, not 23, and not 24. But that is the proposal of this administration because they generally believe in and they have stated it and they put out a budget which has called for this massive expansion in spending. I don't happen to agree that is the way you create prosperity. I believe the way you create prosperity is having a government you can afford, having a government which you pass on to our children which is affordable to them, and giving individuals the opportunity to take risk and go out and create jobs. It is very hard, for example, for a small businessperson to invest in their small business--whether it be a restaurant or a small software company or a repair shop--if their taxes are going to have to go up at such a rate in order to pay this debt that the money they would have used to invest for the purpose of creating jobs is skimmed off by the Government for the purposes of funding this massive expansion. That is not the best way to create prosperity. It makes much more sense to have a manageable government. We are not talking about cutting the size of Government. Nobody is suggesting that. It doesn't happen around here. We are talking about having it be a reasonable size, something that is affordable, something our children can pay for, not something that creates a debt and a deficit that is so high it is unaffordable. Here is another number that is important or interesting. At the end of President Obama's budget cycle here, the interest on the debt will be over $800 billion a year. That is interest. Interest on the Federal debt will almost be $1 trillion a year. That will be more than we spend on national defense. It will be, by a factor of five or six times, more than we spend on education, more than we spend on roads. That is not right. We shouldn't be spending all this money on interest. We should be spending it on real programs that do real things to benefit real people. But you can't do that if you run up the debt so much. It seems reasonable that we should have full and fair disclosure to the American people not only about their credit cards and how they are being treated by their banks or the issuer of the credit cards, but we should also have full and fair disclosure to the American people about what the Government is doing to them, about what this Congress is doing to them, about the amount of deficit and debt that is being put on their back on a daily basis as we spend money around here as if there is no tomorrow. That is all this amendment does. It shouldn't be all that controversial because these are fairly reasonable things. We should inform people, when we have a bill as to how much that bill is going to cost in the way of added debt, not only to the national debt but to each citizen who is going to have to pay for that bill. We should send out with your IRS forms a summary of how much debt is owed and how it will affect you as an individual. When you go on a Federal site, you should be able to find out fairly easily--and it should be set right out there so it is transparent and clear--what the national debt is and how quickly it is going up. Believe me, credit cards are an important issue in people's lives. The way they are handled is important. But equally important, especially for our children, is going to be how much deficit and how much debt we run up as a government. I appreciate the courtesy of the majority side in allowing me to speak at this time. I yield the floor, and I suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Madam President, I understand now is the time for the majority. If somebody appears, I will be happy to yield the floor. I ask unanimous consent to proceed in morning business.

Mr. GREGG. I congratulate Senator Nelson for his excellent statement. His statement was very appropriate and on point on the issue of health care and health reform and the need for a bipartisan effort in this Chamber. He is one of the leaders in the ability to bring people together, and I congratulate him for a strong and thoughtful statement.

Mr. GREGG

Mr. GREGG. Madam President, I wish to talk a little bit about the budget and specifically about the proposal sent by the President yesterday. Yesterday the President sent us his formal budget. We have already voted on a budget, of course. We passed a budget. The President doesn't have to sign the budget. That is one of the ironies of our system. But he does present us with an outline. Because this was a transition year, it is traditional that the President doesn't send us in-depth proposals. He sends sort of a topical approach in early February and then sends us in-depth proposals later in the year. In the last few days, he sent the in-depth proposals. Among the proposals, and what is being most obviously highlighted, is requested rescissions in about 120 programs representing approximately $17 billion. I congratulate him for that. That is an attempt to reduce spending in those accounts and recover those dollars back into the Federal Treasury. But that has to be put in context, the initiative to save $17 billion. That is a lot of money. It could run the State of New Hampshire for at least 3 or 4 years. But in the context of the Federal budget, it is not a dramatic amount. In fact, it represents less than one-half of 1 percent of the Federal budget, which will be approximately $3.5 trillion this year. So taking $17 billion out of spending programs is not going to solve our overall problem, which involves the fact that we are headed into a nonsustainable government because of the size of spending we are doing and because of the size of the debt we are running up. I do congratulate him for putting forward this initiative. I hope it will pass. I hope the $17 billion will actually be passed by this Congress. But regrettably, most of the items he sent to be rescinded had already been sent by President Bush, not most but a significant amount. Forty percent had already been sent to us by President Bush and had been rejected by the Congress, which is too bad. It was unfortunate when they were rejected under President Bush. I hope the Congress will take a second look and accept them now that they have been given the imprimatur, the approval of President Obama, so we have a bipartisan effort to rescind at least 40 percent of the amount. In the end, it doesn't change the outyear deficit figures at all. In fact, this amounts to less than an asterisk when it comes to the amount of debt and deficit which we will be running up as a government. Even with this rescission of $17 billion, assuming it was passed by the Senate and the House and signed by the President and these various programs were reduced, we would still run a deficit of 4 to 5 percent of gross national product over the next 10 years under the President's proposals. We would still run a deficit that would average $1 trillion a year over the next 10 years. We would still run a deficit which would add to the debt at such a fast rate--in other words, deficits become debt--that we would end up with a Federal debt that would be approximately 80 percent of the gross national product or doubling of the Federal debt during the first 5 years of this Presidency. None of those numbers will be changed by these rescissions because they don't go to the core of the problem. The core of the problem is, the Government is being expanded dramatically, even while these rescissions are occurring. The rate of growth of the Federal Government, as a result of expanded spending which has been initiated by this administration, in large part, will dwarf any savings that occur under this rescission proposal. It is as if we had a vast desert of sand. It is as if this was the Gobi Desert or the Sahara Desert and we came along and took a few pieces of sand off the desert. It will virtually have no impact on the deficit and the debt as we move forward into the outyears because of the fact that while we are taking these few dollars out, which I congratulate the President for trying to do, we are adding back massive amounts of spending: $1.4 trillion in new discretionary spending compared to the $17 billion rescission, $1.2 trillion in new entitlement spending compared to this $17 billion rescission. We are taking a little spoonful of water out of the ocean while we are dumping a whole river into the ocean. So the water levels go up. The debt levels go up and the burden on our children goes up. The cost of the Government and the debt of the Government is and remains an unsustainable event for the Nation and for future generations. If the President wishes to be serious about spending restraint--and I hope he is, though it doesn't appear that way from his budget--he would address the underlying problem, which is that we don't expand the Government to take up 23, 24, 25 percent of gross national product when it historically has been about 20 percent, that we don't radically expand spending programs until we have an economy that is generating enough revenues so we can pay for them and that we basically try to contain in the outyears the cost of entitlement spending by putting in place proposals which will lead to limiting the costs in the outyears. The Senator from Nebraska was recently talking about health care. Health care is obviously at the core of issues of how we control costs around here and how we control the outyear growth of the Federal Government. We today spend 17 percent of the gross national product on health care. That is approximately 5 to 6 percent more than the next closest industrialized nation. Yet the President's proposals are to add another $1.4 trillion on top of what we already spend in the area of health care. That makes no sense fiscally. It makes no sense from the standpoint of what the health care system needs. We already have enough funds in the health care system. We should agree that what we are going to try to do is stabilize the cost of health care as a percentage of our gross national product and use the dollars that are already in the system to reform it. We know we have a huge amount of surplus money in the health care system compared to any other industrialized nation. Rather than throwing more money at the problem, adding to the debt and deficit, let's try to be responsible about a reform program, to live within our means--they are not even our means--to live within what we are already spending and spend those dollars more wisely. Those are the types of initiatives we need. Obviously, it is helpful to reduce spending by $17 billion. I hope we accomplish it. Congress has rejected 40 percent of these proposals in the past, but I hope we change our minds. Just yesterday, for example, this Senate passed a housing bill which spent $11 billion outside and on top of the budget, new spending. So we have already spent almost all the money represented as being saved by the President's proposal. Fiscal discipline does not seem to be the order of the day around here. I appreciate at least the effort, but I think it does have to be put in the context of the overall problem. It is akin to taking a teaspoon of water out of a bathtub while we keep the spigot on at full speed and the bathtub doesn't fill up. It is a spigot of spending, of Government growth. There is a belief, regrettably, in this Congress, because of the majority view and from the White House, that by grandly expanding the Federal Government, by moving it dramatically to the left in its size, by growing it significantly, we somehow create prosperity. We can't do it that way. The only way we can create prosperity is if we have a government we can afford. If we are running up deficits at 4 to 5 percent of GDP, if we are taking the national debt up to 80 percent of the gross national product, we will not create prosperity. We will create significant hardship for the next generation which has to pay off all the debt. I hope this proposal for rescission which has been sent up will be followed on with proposals that are serious in the area of controlling the spigot which is dumping all the spending into the Federal account. Turn that down. Let's put some controls on the spending side of the ledger that get to the broader problem of the size of the debt and the size of the deficit in real numbers, not just at the margins. I yield the floor, suggest the absence of a quorum, and ask unanimous consent that the time be equally divided.

Mr. GREGG

Mr. GREGG. Mr. President, is the vote at 10:30?

Mr. GREGG. Mr. President, I ask unanimous consent to speak in morning business for 10 minutes.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to speak about the continuing effort to address the issue of our automobile manufacturers--specifically, Chrysler and General Motors, and especially where the taxpayer ends up in this effort, whether the taxpayer ends up as a winner or a loser. On the Chrysler bailout proposal, it is pretty clear that if the administration's initiative is followed through, some very significant events will occur that will adversely affect the taxpayer. In fact, instead of getting a brandnew car, the taxpayer is going to let a lemon. What is being proposed by the administration--or what was proposed prior to the bankruptcy being filed and which is now being pushed by the administration into bankruptcy, as I understand it--is that the three different classes of basic players, relative to the reorganization of Chrysler, would get significantly different treatment. For example, the taxpayer, who has already put $4 billion into Chrysler--the American taxpayer--would have to forgive all of that; all $4 billion would be lost, 100 percent lost under the administration's proposal, and then they would be asked to put another $8 billion into the pot as Chrysler comes out of bankruptcy. In exchange for forgiving the first $4 billion, the taxpayer would get 8 percent of the new Chrysler, the Chrysler that came out of bankruptcy. This was the proposal. I don't think that sounds like a great deal for the taxpayer, to have put $4 billion in and get none of it back--and remember, we just put the $4 billion in--and then to be asked to put another $8 billion in and get an 8-percent stake. It especially doesn't make a lot of sense when you look at what is proposed--well, let's go to the bondholders next, though. The bondholders would be asked to essentially take an even more significant reduction in their position, which may be legitimate. They would be asked to forgive, I believe--well, I am not absolutely sure of the number they would be asked to forgive, but I think it would be in the multiple-billion-dollar range, and they would be asked to forgive it, even though they may be secured bondholders. So they would be basically wiped out in this process or their interests would be reduced dramatically. The practical implications of that are that the bondholders had invested poorly, obviously, and specifically, they would have to forgive, I believe, $4 billion of their $6.8 billion of debt, and they would get $2 billion back. But that would be a big haircut, and that is probably reasonable. They made a bad investment. But interestingly enough, even though they are secured creditors, in many instances, or have a higher priority of bond debt than, for example, the UAW debt or maybe even the taxpayer debt, their position would be treated more detrimentally than the taxpayer or the UAW. That doesn't bother me all that much, from the standpoint of the taxpayer. Obviously, we should be treated better than anybody else in this process. It does bother me a little bit from the standpoint of how you prioritize debt. If we look at what is happening with the UAW in the deal, as proposed by the administration, they would have to forgive, I believe, approximately $6 billion of their outstanding responsibility-- outstanding debt--which is about 57 percent of the obligation of Chrysler to the UAW. But in exchange for forgiving that $6 billion, they would get a 55-percent stake in the new company. So to review this situation, the UAW would forgive 57 percent of their debt owed them by the company--or $6 billion--and they would get 55 percent of the new company. The taxpayer would have to forgive 100 percent of what was just put into Chrysler and would get 8 percent of the new company. The senior bondholders would have to forgive all of their debt, and in exchange they would get $2 billion back. That doesn't make a lot of sense. Basically, what is happening is, the UAW, the union, is being put in a far superior position than the bondholders, who are secure, or the American taxpayer, who basically was asked to put up $4 billion, and then has that wiped out in exchange for 8 percent of the new company, and then is being asked to put in another $8 billion. This has two fairly significant implications. First, the taxpayer is buying a lemon, getting a bad deal. We, the taxpayers, are getting a bad deal. Second, the unions are getting a great deal. They are getting a higher status as secured debtors. They are getting a significantly higher return--which is 55 percent versus 8 percent of the new company--than the taxpayer. The process is basically turning on its head the traditional legal order under which people are repaid out of a bankruptcy estate. The taxpayer usually comes first out of a bankruptcy estate. Usually, it is the IRS in that case, then comes senior debt, then comes the issue of debt owed to pension funds, obligations which the unions have, and then comes the common equity. In this structure, it is just the opposite. Well, that change sends a very serious signal to the marketplace that is not good because if people don't know the prioritization of debt, then they don't know how to lend money and what the cost of the money they lend should be. That is going to affect interest rates and create uncertainty and basically undermine what is an established rule of law that we have in this Nation relative to the prioritization of how people get paid off when somebody goes into bankruptcy. It is a very important issue, one of the things that makes our commercial system different than, say, a place like Russia, where you have no idea what is going to happen when you go into a court system because it is totally arbitrary. In ours, we have a structured proposal, an orderly way of approaching things. Everybody knows what is going to happen if an investment should go south. Everybody knows what their order of priority is in being paid out. In a bankruptcy situation, it is pretty clear. Yet now comes the administration, and for what appears to be purely political reasons, not economic reasons, because the economic issue is how you basically take a company such as Chrysler and make it competitive again so it can produce cars that people want to buy at a price people can afford--that is the economic issue--and keep it viable to the extent that it is viable. No, this is a political decision to reorder who the winners and losers are in a structure--what amounts to an attempt to structure a bankruptcy before it occurs. That was the administration's initiative. This is a serious issue. When we start putting politics in place of the law in any area in our Nation, but obviously in the area of commercial activity--when we start picking winners and losers based on the political party's implied interest or interest in seeing a certain segment of the society be the winner versus another segment they see as being less deserving, then we undermine the essence of our commercial activity in this Nation, which is to have knowable, identifiable, ascertainable results, as a result of having a legal system that defines people's property rights. Yet this administration, in a very cavalier way, has suggested that the UAW should be a huge winner compared to the taxpayers and the bondholders in a manner which has no relationship to what has been the historical priority of status relative to distributing and reorganizing a company--distributing a bankruptcy estate and reorganizing a company. Why would it occur that this administration would, in a very arbitrary way, try to set aside the rules of priority of ownership and property rights to benefit one group over another group outside of what has been the historical and legal way things have been structured? It is obvious. It doesn't take much to recognize that. The UAW has a huge political influence in this administration and in this Congress. They used that political influence to make sure this deal was structured in a way that most significantly benefitted them. But who is the loser? The loser is the real stakeholders and people to whom we are supposed to have primary responsibility as a government, and that is the taxpayers. The taxpayers are the losers on the face of it, when we only get 8 percent and the unions get 55 percent of the new company, and we are paying $4 billion and they are paying $6 billion, and then we are putting in another $8 billion on top of our $4 billion. So it ends up being $12 billion, and we only get 8 percent. The unions will put in $6 billion to get 55 percent. That is not right. It is not appropriate, and it is not fair to the taxpayers of America. But that was the proposal and what is trying to be strong-armed through this system. It is not fair to the taxpayers. It also sets a dangerous precedent of trying to reorganize the stated priority of status relative to the right to recover under a bankruptcy situation or pursuant to secure property issues in a way that could be translated into, significantly, other parts of the economy. People will now question the status of their debt and inevitably have to charge more in order to try to ensure over the unpredictable consequences of the Government coming in and reordering the priority of the debt. That is dangerous in a commercial society that depends on law in order to set an established order of property rights. This is a big issue. It hasn't been discussed much. Obviously, the bankruptcy courts have now stepped in because some of the secured parties have said they wouldn't accept the deal. But still the administration pushes this concept of having the taxpayer take a vastly significant, reduced position compared to the UAW, while putting in much more money than the UAW and, at the same time, reordering the priority of property rights. I hope people will begin to focus on this issue, and I hope our bankruptcy courts will stick with what is the order of the law and not the order of politics. I yield the floor and suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Madam President, picking up on the comments made by the chairman--and I fully accept his sincerity and his belief and his desire not to use reconciliation, but that is not, as he said, the position of the President, the Speaker of the House, and the majority leader. I think we can assume if those three folks want reconciliation to be used, it is going to be used. The practical implications of reconciliation are to devastate the constitutional prerogative of the Senate. The purpose of the Senate is to debate, discuss, and then amend items of major--major--policy. The point is, reconciliation was put into this document, which we just received, for the purposes of muzzling the minority and making the Senate into having the same status, from a parliamentary procedure standpoint, as the House, where amendments are not allowed, where discussion is limited, and where an up-or-down vote is the only option given to the membership. It is not only a terrible idea from the standpoint of the impact it has on the constitutional role of the Senate--which has been explained very effectively by people such as Senator Byrd as being a place where we are supposed to give the minority the capacity to make points and discuss matters of high policy and complex issues in an open forum with the ability to amend--but it is also a very difficult way to proceed on an issue of such complexity as health care reform or the climate change issue. The practical effect of using reconciliation will be that a bill will pass in this Congress, especially in this Senate, which the American people will know is not fair. They will know it is not fair because there will have been no ability for the minority or for people who disagree with the way the bill was written down at the White House to object to it or to amend it. That type of legislation--major health care legislation, which affects every American--in order for it to be effective and in order for it to be accepted by the American people, needs to be perceived as, and really be, a fair document, reached through compromise, with the purposes of having all the different stakeholders at the table in order to discuss the issue. Regrettably, that is not going to happen under the reconciliation instruction. I would note that even though the chairman has said--and I am sure he says this in all sincerity; I know he says it in all sincerity--he believes reconciliation will not be used in health care, it can be used and will be used on health care if the President and the majority leader and the Speaker of the House want it to be because that is why they put it in. In addition, the idea it will not be used to raise the national sales tax on energy or a light switch tax, which is what is being proposed relative to the carbon tax, that also probably does not apply because the language of the bill is not binding. It simply says it is assumed. ``Assumed'' is a pretty weak--in fact, I cannot think of many words that are any weaker than the term ``assumed.'' It is assumed reconciliation will not be used in the area of climate change legislation, which means it can be used in the area of climate change legislation and probably will be if there is a determination by those folks who want to push that issue to do so. It is ironic this bill--for which we have had two major votes in this Senate that said: Do not use reconciliation for the purposes of climate change--has in it such weak language on that issue, basically opening the door to using reconciliation for the purposes of climate change. But the reconciliation issue, as serious as it is--and it is a serious issue because it goes to the purposes and the role of the Senate, in my opinion; and it also, in my opinion, will undermine the quality of the product produced in the area of health care or climate change--is not the core problem with this budget. The core problem with this budget is it spends too much money, it raises and creates too much debt, especially on our children's backs, and it raises and spends too much in the way of taxes. It is going to have a dramatic impact on the quality of life in this Nation as it plays out, as it is creating an unsustainable government, a government which neither our generation nor our children's generation, nor our children's children's generation are going to be able to pay for because it is going to increase in size so much and create so much in the way of deficit and debt, which will have to be paid for by our children and our grandchildren. To try to put this in perspective, the budget basically raises discretionary spending by $1.5 trillion. We are going to hear some arguments from the other side of the aisle that: No, it does not do that. I will get to that in a second. They are essentially doing the Obama budget, the President's budget. The Director of OMB says there is virtually no difference between the two. They are 98 percent the same. Essentially, they are raising discretionary spending by $1.4 trillion, mandatory spending by $1.1 trillion, and raising taxes by $1.5 trillion. In fact, it may be a lot more. They are making absolutely no savings in the area of spending accounts, which are critical to getting this deficit down and under control. As we have mentioned on numerous occasions, but which is accurate and needs to be repeated, they double the size of the debt in 5 years, they triple it in 10 years, and they leave our children with a debt which is 80 percent of GDP--a public debt which is 80 percent of GDP. The practical effect of having a debt that is 80 percent of GDP is that basically you have a nation which cannot sustain its obligations of debt. Today, our public debt to GDP is about 40 percent. If you wish to get into the European Union, your public debt can only be 60 percent of GDP. Under this budget, we are going to 80 percent of GDP. Latvia could get into the European Union, but we could not under this budget. That is what is going to happen. It is not a question of some sort of theoretical event. Under the spending program of this budget--and because the Congress is now totally controlled by the liberal side of the aisle and because the President is of that party--this is going to happen. It is not like it is not going to happen. It is going to happen. What is driving these massive deficits? Primarily, it is massive spending increases. It is not too tricky an issue. Under President Obama's budget, and under the budget that is brought here by our colleagues on the other side of the aisle--although they tried to obfuscate the spending; at least the President is forthright about his spending--the spending of the Federal Government goes up dramatically. This chart I have in the Chamber shows, historically, Federal spending has been about 20 percent of GDP. That is about what we can afford, historically, because our revenues are a little bit below that--19 percent of GDP. Under this proposal, the spending goes up radically in the next year, year and a half, and then it comes down as a result of the end of the recession and then it starts going up again. But it never comes down that much. It is 23 percent, 24 percent, 25 percent of GDP. The problem is spending. The President is very forthright about this. He says he believes strongly--and his party, obviously, agrees with him--that you should significantly increase the size of the Federal Government, that you should significantly increase spending because if you increase the size of the Government, if you move the Government to the left, if you increase its spending, you create prosperity. He believes governments create prosperity. Well, we do not agree with that. We think the way you create prosperity is having a government you can afford. That does not mean you eliminate Government. It means you have one you can afford. The proposal here is not for a government you can afford. It is just the opposite: a government we cannot afford, a government that is not sustainable. The way to create prosperity is by having a government you can afford and giving individuals the ability to go out, make investments, takes risks, and create jobs. That is how you create prosperity--not by radically increasing the size of Government, radically moving it to the left, which is exactly what is proposed in this budget. All this new spending leads to a massive increase in debt. In fact, one of the more interesting statistics--because I noticed the chart of my colleague from the other side relative to George Bush--this President dwarfs--dwarfs--what President George W. Bush did in the area of adding debt to our children's backs. It dwarfs that. If you take all the debt created in this country since George Washington through George W. Bush, President Obama's budget--and the budget which is being brought here by the other side of the aisle, if it were honestly scored and correctly accounted for, which would be essentially the same as President Obama's budget--doubles the amount of debt that has been put on our books by all the Presidents in all the history of this Nation. That is a tragic event for us, but it is an even more tragic event for the next generation. I hear the other side constantly talking about what President Obama inherited. Yes, he inherited tough times. But the issue is not what he inherited. The issue is what he is going to bequeath, what he is going to leave the next generation. What he is leaving the next generation is an unsustainable Government. You do not have to listen to me to believe that. The chairmen of the Budget Committees on both sides of Congress-- on the House side and the Senate side--have said the budget, as presently proposed, is unsustainable in the outyears. Their budget is unsustainable in the outyears. Of course, they eliminate the outyears. They only did a 5-year budget. The President did 10 years. They took off the last 5 years so they would not have to talk about it. But it is not going away at the end of 5 years--still growing, still out of control. And it is unsustainable in their own terms. Why is it unsustainable? This chart shows the bottom line of why it is unsustainable. It is called the debt. To quote one of the sages and oracles around here: ``The debt is the threat,'' and the debt is just going up and up and up. It is an unsustainable situation. What does ``unsustainable'' mean? That is some sort of term we throw out and people don't really catch on. What does it mean? It means the average American family at the end of the President's budget will have $130,000 of new debt--every family in America--that they will have to pay for as part of the Federal debt. It means the average American family will have $6,000 a year of interest payments on that debt for which they will be responsible. It means our children will inherit a government which will cost them so much that basically one of two things will happen to them: The economy will have to be inflated radically to pay off this debt, thus reducing the value of the dollar, eliminating savings of most Americans and creating an economic tax of inordinate proportions through massive inflation; or taxes on all Americans will have to be significantly increased at a rate that we have never seen in our history--other than in World War II--a rate which will essentially mean Americans would not be able to go out and buy a home. They would not be able to go out and send their kids to college. They would not be able to buy that car or live that lifestyle our generation had. With the debt at 80 percent of GDP, it will mean for the first time in the history of our country, one generation will have passed on to another generation less of a nation--less prosperous, less strong, less opportunity. Totally unfair, but that is exactly what will happen. There is no way around this. Their budget locks us into this path. They themselves admit it is not sustainable, but that hasn't caused them to hesitate in going forward, and going forward in an aggressive way to expand the size of government and not pay for it and leave our kids with these massive debts. I think it is appropriate at this time to also talk a little bit about the specific budget before us, which is the compromise between the House and the Senate budget because there is so much misdirection and disingenuousness about this budget that it is staggering. I give the President of the United States and his people credit, including Director Orszag and OMB. They attempted to send an honest and straightforward budget where they actually told us what was going to happen and what the costs were going to be. They put in one big gaming mechanism in the area of defense where they assumed $1.6 billion of spending, which everybody knew wasn't going to occur because they counted on the war costs going on for 10 years at their present levels--and we all know that is not going to happen--and then they claimed savings when those war costs were reduced. That was a fairly big item. But outside of that item, for the most part they gave us a budget that had integrity to it in the area of what it really was and what it was really going to cost. This budget which was just sent to us is just the opposite. It is filled with gamesmanship, with stuffing spending under the rug so we don't notice it, with tools that avoid enforcement mechanisms, and with things such as the reconciliation instructions, which are a total adulteration of the congressional process when it is used relative to a public policy issue as big as the question of health care. Let's note a few of the things they have left out of their budget to get to their alleged number. Remember, their alleged number is around $500 billion of deficit in the fourth and fifth years, and they pound their chest in great praise of themselves: Oh, we reduced the deficit to $500 billion. We have reduced it by half or three-fourths or whatever they want to claim. That is a little hard to sell to anyone with any common sense. When the deficit is run up to $1.8 trillion or $2 trillion and then brought down to $500 billion, that is not moving forward, folks; that is taking six steps back and one step forward and claiming that we are moving forward. We are still going backwards. This budget goes backwards at an atrocious rate. It goes backwards at an atrocious rate, and it doesn't even tell us how much it goes backwards because they hide so much of their spending and their costs underneath the rug. In the area, for example, of the doctor fix--we all know around here what the doctor fix is. The doctors in this country get reimbursed under Medicare, but we have this stupid, arcane rule around here which every year cuts the doctors' reimbursements by some amount, and now it is up to 20 percent. So every year we have to fix that. It is an expensive fix, but we do it every year, so we know we are going to spend that money to fix that arcane rule that ends up cutting doctors' reimbursements arbitrarily and unfairly. The President's budget accounted for that. They accounted for that fix. Does this budget account for that fix? A very small part of that fix--a very small part of that fix. They leave out about $50 billion of that fix. In the area of the alternative minimum tax, we know the alternative minimum tax wasn't supposed to apply to 20 million Americans; it was only supposed to apply to a small number of Americans who make a huge amount of money who could avoid paying taxes because they used tax avoidance mechanisms. But because of the failure to index that system, we now have 20 million Americans who will be subject to the alternative minimum tax if we don't fix it every year. So what do we do? Every year we eliminate the application of that tax to those 20 million Americans because it was never supposed to be there to begin with. But what does this budget do? The President had the integrity to say he was going to do that throughout his budget. They were not going to assume the revenues from the alternative minimum tax because they knew for a surety that they were not going to get those revenues because every year we repeal that tax that applies to those folks. So what do they do in their budget? Unlike the President, they don't account for all the alternative minimum tax. They score some of that revenue to themselves, taking advantage of that revenue. So instead of having the full cost of the alternative minimum tax in their bill, they have a small percentage of it--not a small percentage of it; about half of the cost accounted for in the bill. So they leave out a big number relative to the alternative minimum tax--about $70 billion--or about $80 billion, actually. Then the TARP, the President asked for more TARP money. It certainly looks as though, when you listen to all of these things coming out of the White House, that they are going to need more TARP money. They put that TARP money in his budget; they leave it out. No, no TARP money. Well, maybe arguably they will not step up when the President asks them to and finance the issue of how we maintain our financial stability as a country relative to our financial system, but I suspect if the President asks for TARP, it will be allocated, and they should have scored it. At least the President did that. Budgeting for disasters: We know we have disasters. The President knows we are going to have disasters. It appears the House Democrats and the Senate Democrats don't know we have disasters, or if they do, they decided not to budget for them because they left those numbers out in order to get to a better number on their deficit figure. Health care reform: We know we are going to get health care reform. We are going to get it through reconciliation probably. They are going to ram it down the throats of this Congress. It is going to be their bill, and we know their bill scores at $1.2 trillion over 10 years. That is how it scores. The President had the integrity to say he would put half of that in here. He put in $650 billion of that cost into his budget. Does it appear anywhere? No, it doesn't. The Democrats in the House and in the Senate, they are not going to pay for health care at all. They put in this euphemism of a reserve fund that claims they are going to pay for it, when we know that is about as likely as their use of pay-go to enforce any spending around here. The Make Work Pay tax credit, one of the premier items of the President, remember; we hear so much about how there is not going to be a tax increase on working Americans. Well, let's point out the fact that working Americans are going to get hammered pretty hard under this bill in the area of tax increases. First, they are going to get hit with a carbon tax, and a carbon tax is essentially a national sales tax on the production of electricity and the use of electricity. So if someone uses electricity in their home and turns on their light switch, they are going to get hit with a carbon tax. The estimates of that tax are huge--huge. MIT did a study and said it is $300 billion a year, massive numbers. It is $3,000 per household if we take that study and just divide the number of households into the cost of the study. But independent of that tax, which doesn't appear anywhere in this budget, by the way, other than the fact that we know it is coming through some reserve fund, alleged reserve fund--they wipe out the President's Make Work Pay tax credit which he asked to be extended. They assume it would not be extended. Why? They know it is going to be extended because if the President tells them to extend it, they are going to extend it. Why do they not put it in here? They don't put it in because they want to make their bottom line look better--look better. Then they actually skim down the middle-class tax relief. They have already scored the fact that they are going to tax wealthy Americans--alleged wealthy Americans--people making more than $250,000. They have already scored that and taken in that money. Remember, most of those people, the vast majority of those people, are basically running a small business, and when we raise their taxes, what can't they do? They can't expand their small business. They can't add jobs. They are the engine of jobs in this country, by the way. So they are going to tax them, take their money away from them, put it into the Government, expand the size of the Government on the allegation that the Government can create prosperity, not small business. Small business doesn't create prosperity as far as our colleagues on the other side of the aisle are concerned. No, no, they tax them. No, it is the Government that creates prosperity, so let's take more money from small business, move it over here and give it to the Government, and we will create prosperity for Americans. Well, tell that to the person who is running the restaurant or running the garage or has a little software company who would like to use his money or her money in order to reinvest it so they can actually hire some more people and actually produce some value in this society, versus expanding the Government and creating more consultants and more people who are out there spending money in a very inefficient way, for the most part. But that is their policy. They won the election. Fine. But in winning the election, they also said they weren't going to tax middle Americans. Well, look at the document. There is $180 billion of taxes on middle- income Americans which they do not define from where it comes. They simply say it is there. It is in there somewhere. Well, somebody is going to have to pay it. I think it is pretty safe to say it is going to be working Americans who are going to have to pay that $180 billion. Why did they raise those taxes on working Americans? Why did they go back on their campaign promises, both in the Make Work Pay area and in the taxing working Americans? Well, they did it so they could make their bottom line number look better than the President's. At least the President had integrity. He had honesty. He came to us and said: I am going to extend Make Work Pay. I am going to have a middle-class tax cut. The other side of the aisle, the Democrats in the House and the Senate don't play by those rules. They play by the old rules of let's obfuscate, hide, sequester money and make it look as if we are saving money when we absolutely know for sure the spending is misrepresented in the bill and the taxes are misrepresented in the bill. Then they have the temerity to use the phony 920 number. We all know 920 is a phony number. This is an account we set up, and when we claim savings, we put things into 920. In other words, I am going to increase spending on the XYZ program because I like XYZ. Well, where do I get the money for that if I am going to try to stay revenue neutral? I am going to get it out of account 920. I am going to spend $40 billion on the XYZ program and the offset is going to be account 920. Account 920 is an account that for all intents and purposes leads to a cut around here. It never leads to anything. It is not specific. It should come out of all accounts. It never happens, but they were a little off in the numbers they wanted to get to, so they did a 920 account in their budget to the tune of, I think, $40 billion or more--$48 billion. All of that added up, and their real number, their real deficit numbers--the numbers that the President actually had, ironically--come out pretty close to the same. If we put back in all the stuff they have hidden under the rug, all the stuff they claimed they are not going to do, which we know they are going to do, we come back to deficit numbers which are almost exactly what the President's deficit numbers are. There is no $500 billion deficit in the fifth year; it is $924 billion--if you put back in what they have hidden, claimed, obfuscated, manipulated, and generally tried to play games with around here. So the President's numbers were accurate. He deserves credit for that. But this budget is a fraud on its baseline numbers. The reason this is important, besides the fact that there is actually $400 billion of spending almost every year that is not accounted for in this budget, is that the deficit, at these numbers, is around 5 percent of GDP. A deficit of around 5 percent of GDP and a public debt of around 80 percent of GDP leads you to being a country that is essentially unsustainable in its fiscal policy. It leads to a nation where the dollar loses its value, where our debt cannot be sold, where inflation is rampant, tax policy is basically so heavy that productivity is significantly stifled. They want to hide that number. At least the President had the integrity to admit that. The House and Senate Democrats have tried to hide that. There is one other point that needs to be made here, because of the foolishness of the statements about how they are going to reinstitute a real pay-go. You know, I understand that the Blue Dog Democrats on the House side come from districts where their people expect them to be fiscally responsible. They have gotten on this banner of pay-go. They say we are going to assert pay-go. That will be the rules that guide us, and we will make sure all the spending is paid for and the tax cuts are paid for. That is called pay- go. They say that as a mantra, to the point where it has become a term of art that implies you are fiscally responsible. Look at this budget. My colleagues on the House side, who are Blue Dogs, claim to wrap themselves in the banner of pay-go, but they have no banner on their pole. There is no pay-go in this bill that will have a significant impact. In fact, the budget passed by the House and Senate put in place policies that would obfuscate pay-go to the tune of approximately $2.4 trillion. So on the face of this, they have ignored pay-go in their own budget. The ultimate insult is that the most significant public policy event we are going to do, probably in the term of anybody in this Congress, going back to the beginning of Robert C. Byrd's term, forward to the end of probably the youngest Member of the Congress who is serving today's term, which is the issue of rewriting the health care system of this country--17 percent of our GDP--the single most significant public policy event we will ever undertake--affecting every American everywhere, at all different levels, they formally, by law, waive pay-go in this bill for that exercise. The Blue Dog Democrats in the House say we have the pay-go protection. Nobody who is being forthright with their constituents should go out and claim that pay-go is going to be a disciplining event. It isn't, hasn't been, and will not be--especially on the most significant issue we confront, which is the question of health care reform. We have already talked, of course, about reconciliation and the affront that is to the Senate procedures and the constitutional role of the Senate. But it should be noted that using reconciliation also creates the situation where you can run through a massive tax increase, such as the carbon tax, and use it to pay for health care reform. Don't think that that is not being considered around here. Assuming that reconciliation won't be used in that area is an optimistic projection, because the majority leader has already said publicly that--and I am paraphrasing--isn't it interesting that the revenues from the carbon tax, or the national sales tax, light switch tax, pretty much is what we need in order to do the first few years of the health care bill as we see it. So offsetting those two has obviously been an idea that has presented itself to the majority leader, and he wields significant authority here. He was able to keep reconciliation in over the objections of our chairman, allegedly, so I know he is powerful, because the chairman is extraordinarily powerful. When two powerful forces meet, if one of them survives, we know that one is really powerful. We know the majority leader is really powerful because he was more powerful than the chairman on the issue of reconciliation. So that is serious. We could use the carbon tax to pay for the health care, which is possible. I am not saying it is going to happen, but it is possible while using reconciliation. That brings me back to my closing point, which I want to reiterate. It is about debt. It is about the fact that when this is all said and done, when all the smoke has risen, there will still be burning a massive explosion of Federal debt, an explosion so large, increases so dramatic, that I don't see any way out from under it with this budget. I am so concerned about where this takes our opportunities as a Nation. When you pass on--and it is not that far away because we are talking 2013, 2014, when we start getting big numbers. When you pass on a deficit of 4 to 5 percent of GDP, a debt of 60 to 80 percent GDP, where do we go as a Nation? Let's think about that for a minute. How does a nation get out from underneath that? Doesn't the world start to look at us and say, my God, has America lost its way? Is it no longer capable of disciplining itself and living in a responsible manner? When they say that about us, where does our Nation end up? Where do we leave our children? It is a serious issue. Yet it is right here, and this budget is the point. If we pass this budget in its present form, with the outyear spending and outyear debt, I don't know how we get out from behind it. I yield the floor.

Mr. GREGG. Mr. President, I would like a few minutes. First, I know that one of the senior staff members on the chairman's side, Joel Friedman, is going through some very difficult health situations. I know he wanted to talk a little bit about that. We wish him the best. I know my staff, who works closely with him, feels great concern. The concern goes out to him and his family. We certainly wish him the best during this very difficult period dealing with this very difficult health issue.

Mr. GREGG. Mr. President, let me, again, express the concern of my staff and myself for Joel and his family and wish him the best in this very difficult time and wish his family the best. We certainly hope he returns to good health soon. Let me second the words of the chairman. This committee has contention. Even when the chairman produces a bill which is utterly incorrect and takes us totally in the wrong direction, I totally respect his efforts. I say that with some humor. The strength of this committee, besides the fact that it is a very influential committee in the Senate, is that we approach the issues in a forthright, professional manner. There is, on both sides of the aisle, a genuine and sincere and very successful effort to make sure the committee does its business in an orderly, professional, and cooperative way, which we hope brings credit to the Senate and the way the Senate should function. I believe it does. It is, in large part, because the chairman sets that tone, as does his staff--Mary Naylor and the excellent people she has working for her; and on my side, Cheri Reidy, Jim Hearn, Allison Parent, and all the other folks who spend hundreds of hours, especially during this very intense period as we run up to the final passage of this extremely important piece of legislation. Their commitment, their professionalism is what allows this Congress to function well, and we very much appreciate it. I could go on at some length on the issue of the budget, but I think people have probably heard enough of myself on this issue--although I wouldn't want to say that--and I know I would love to hear the chairman further discuss this, and he would love to hear myself further discuss it, but it is probably time to move it along and allow the chips to fall where they may. I would suggest we yield back all time and we vote at 5:30.

Mr. GREGG

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

Mr. GREGG. Mr. President, I rise to speak about the soon to be pending issue of the budget. We are told that the Democratic membership of the House and Senate reached agreement last night on the budget proposal. They didn't seek our advice or counsel on it. It is pretty much the outline of the budget as requested by the President. There has been a lot of discussion about whether the President inherited a terrible situation. I think he did, from a fiscal standpoint. He has had difficult issues to confront relative to stabilizing our financial industry and trying to get the economy going and addressing the issues which most Americans are concerned about, which is their jobs, the value of their homes, the ability to pay their bills, and to send their kids to college. What the President inherited is important, but what he is bequeathing to the next generation is even more important. This budget he proposed is an outline of where he sees the Government going and where he sees this Nation going. Regrettably, the budget as proposed by the President, which has been worked on here by the Senate Democrats and the House Democrats, puts forward a picture that basically almost guarantees our children will be inheriting a nation with a government that is nonsustainable. The President's budget proposed a trillion dollars of deficit, on average, for the next 10 years. That is a number that is hard to comprehend. But to try to put it into perspective, the effect of that number is that the debt of the United States will double in 5 years and triple in 10 years. If you want to put it in another perspective, take all the debt created since the founding of our Nation, from George Washington through George W. Bush--all that debt that has been added to the backs of the Nation's people--and President Obama's budget doubles that debt in 4 years, which is a staggering event. The implications are pretty dramatic for the next generation. The public debt of the United States will go to 80 percent of GDP fairly quickly under this proposal. The historic public debt of this country has been 40 percent of GDP. That means the amount of debt out there in relation to the size of the economy will have doubled. That has dramatic ramifications. For example, at that level of public debt through the economic activity in our country, we as a nation would not be allowed to enter the European Union because we wouldn't meet their standard for fiscal responsibility. Countries such as Latvia, Lithuania, and Ukraine, which all have very serious issues, might qualify for the European Union, but we would not because of the fact that our debt was so high as a percentage of our economy. It means our people, who have to pay that debt, will have to pay an inordinate amount of taxes in one of two ways to pay that debt off. Either they will have to pay more taxes because the Federal Government will inflate the money supply in order to pay off this debt, which is the worst tax there is--inflation--because it takes away the savings of all of the American people or you will have to significantly increase taxes on every American, not just the high-income Americans, as was represented by this President that he wants to do, and the Democratic Congress and Senate said they want to do; all taxes will have to go up astronomically in order to pay for the debt. What is driving this massive expansion of debt our children and we are going to have to pay as a result of this budget that is proposed by the President? Well, it is spending. Very simply, it is spending. The President proposed, and the Democratic Congress will bring forward, a budget that significantly increases the spending of the Federal Government. Historically, the spending of the Government has been about 20 percent of the GDP. Under this budget, it goes to 22 percent, 23 percent, 24 percent, 25 percent--it gets up to levels that have never been seen, except during the time of World War II. They are unsustainable levels of spending. It is being done with a pure purpose, which is, I guess, to Europeanize the American economy and the American Government, to basically have the Government become the largest and most significant player in our economy and to dominate all aspects of our economy because of its size. The President is very forthright about this. He says he believes that by growing the Government significantly, he can create more prosperity. Those on our side of the aisle disagree with that. We believe a government has to be affordable for a nation to have prosperity. We also think prosperity doesn't come from the Government, it comes from individuals who are willing to take risks and go out and create jobs by taking those risks. This is a fundamental disagreement. This budget lays that out precisely. We are going to hear from the other side of the aisle the most disingenuous discussions about how they have been much more responsible on the budget, while they claim they are doing exactly what the President is doing in his budget. The reason they make that statement is because they cook the books. At least the President was forthright and he came forward with a budget--except in the area of defense--which set forth in a reasonably honest way what the costs to the Government were going to be and, as a result, it reflected the fact that because of his huge commitment in new spending programs, the cost of Government was going to be extraordinary, and the amount of debt that was going to be added to the books of the Government and the backs of the American people was going to be untenable and unsustainable. The other side of the aisle, I guess because they recognize they are going to be up for election before the President, doesn't want to have those numbers out there. So they have gone back and played a lot of games with the numbers the President sent up. For example, the President honestly represented the fact that we are not going to get revenues from the alternative minimum tax, because every year we basically limit the amount of applicability of the AMT. But the baseline reflects a huge income of the AMT. It says 20 million people are going to pay it. But we are not going to allow that to happen, because it wasn't designed to affect 20 million people but the top income producers in this country--probably less than a million people. So every year we basically change the law so that for that year the AMT doesn't apply. The President was forthright and said I know that will happen and I am not going to account for this revenue that never comes in. So he scored the AMT fairly. The other side of the aisle games that number. In the area of the doctors' fix, every year we know we are going to have to pay doctors a reasonable amount for their services under Medicare. Unfortunately, we have a law in place that keeps cutting that amount. This year it will be cut almost 20 percent over the baseline, in an arbitrary and foolish way. We should fix this permanently, but we don't have the courage to do it because of the effects on the budget. So we have used all sorts of gimmicks over the years--and everybody admits to this--so that we didn't have to fix that over a long period of time and correct that problem, even though we know every year we are going to adjust and make that payment to doctors. Well, the President was forthright and he said, listen, that is not fair, honest accounting. We are going to tell you exactly what the doctors' fix costs, and we are going to account for it in the budget. What does the other side of the aisle do? They hide that number again. They go back to the old rules. Those two items alone represent $100 billion of annual spending, which is being put under the rug. The President was honest enough to talk about it, but this Democratic Congress and Senate, in an attempt to obfuscate the issue for the American people, because they don't want to tell the people how much money they are spending, they stick that $100 billion under the rug. Then there is the health care reform. At least the President--even though I disagree with some of his philosophies, and I hope we can have a bipartisan approach, and I support the Wyden-Bennett bill floating around this Congress--at least the President, in proposing his health care reform, said he was going to account for paying for half of it-- $600 billion he put into the budget to pay for his health care reform. He acknowledges that is about half the cost of a $1.2 trillion program over the time of his budget. What does the other side of the aisle do when they bring this budget forward? They don't account for any of it--none of it. It disappears off the books. Not only is the $1.2 trillion not there, the $600 billion is not there. How outrageous, to claim they are going to bring the deficit down to 3 percent of GDP in 2014, when they have basically hidden under the rug the AMT cost, the doctors' fix cost, and the most significant fiscal issue, health care reform. It is so disingenuous, it is almost unbelievable. But they are going to do that, and I suspect it won't be covered in any depth. To claim they are going to cut the deficit in half, which is a classic example of language over substance, will be the mantra of the day. They say they are going to cut the deficit in half. They claim they are going to cut it by 75 percent, because they are going to take a $1.8 trillion deficit and allegedly cut it to $550 billion in 4 years. Let me point out to you that $550 billion is too big. It is like saying we are going to take six steps backward and two steps forward and claim we are moving in the right direction. Of course they are not. Equally important, the $500 billion number is a total fraud. It is a fraud on the American people brought forward in this budget. Please, please, please do not subject the American people to this sort of disingenuousness. At least have the integrity the President had when he presented the budget of accounting for what we know are real numbers, such as AMT, the doctors fix, and the health care reform initiative proposed by the President and supported by the other side of the aisle. That is the substantive problem with this budget; that it creates all this debt, all this spending. It takes the Government of the United States and lurches it to the left. It Europeanizes our Nation, for all intents and purposes, and passes on to our kids a government that is not sustainable. It is ironic that we hear from the Budget chairmen, both in the Senate and the House, that the outyear numbers are unsustainable under this budget. The outyears are so unsustainable under their budget that they eliminated the last 5 years of the budget. The President sent up a 10-year budget to have some integrity around here. The other side of the aisle said: My goodness, we can't tell the American people what is going to happen to them over the second 5 years. It is bad enough what we are going to do to them in the first 5 years. We are going to eliminate the second 5 years and do a 5-year budget and not tell them about the second 5 years. Both Democratic chairmen of both committees in the House and Senate have said we are on an unsustainable path. What do they do about the unsustainable path? They hide the numbers under the table, they do not admit to the spending, they allow the spending to go up radically, and there is absolutely zero--zero--savings on the spending side of the ledger, especially in the entitlement accounts which is at the core of what is driving the outyear problem. Ironically, a couple of the ideas the President sent up to save money were dropped, simply dropped. For example, he proposed some savings in the agriculture accounts which were very reasonable. They disappeared. He proposed some savings in the Medicare accounts which were very reasonable. They disappeared. But that is a minor story compared to the trillions of dollars of new debt that is going to be put on the backs of our children. By the time this budget has run its course, it will have added well over $9 trillion, under the President's calculations, to the debt of the United States. Who is going to pay that? Who is going to pay that? First off, who is going to lend us the money? At some point, the countries that are lending us this money, the international community that looks to us and lends us money so we can run these massive deficits, is going to say: Why? Hold it. We don't know if they can pay off all this debt. At that point, the value of the dollar is at risk. At that point, the ability of us to sell debt is at risk. At that point, our Nation starts a downward fiscal spiral which will be extraordinarily disruptive and dangerous for us as a nation. This is not a good path to be on. There are also a couple technical points that should be pointed out because they are procedural points that have massive policy implications. First, of course, is this really pyrrhic claim they are using pay-go as a disciplining mechanism. How many times have we heard that pay-go is going to be used to discipline spending. My goodness, in the last Congress, which was dominated by the Democratic Party, if I recall correctly, the House and Senate both being democratically led, pay-go, which was supposed to discipline the fiscal process around here, was waived almost 20 times--either waived, avoided or circumvented almost 20 times. Those exercises cost us almost $400 billion in spending that should have been offset. So pay-go became ``Swiss cheese-go.'' It had no value and was a worthless purpose, other than to make a political speech and claim on the stump: Oh, I am for fiscal discipline. I am for pay-go. Of course, when you voted in the Senate over the last 2 years, if you made that speech and up for reelection and you were a Democrat, you basically waived pay-go, circumvented pay-go or avoided pay-go to the tune of $400 billion in new spending. Now we have the House Blue Dogs saying: We are going to get tough pay-go language back in place. I have to explain something to the House Blue Dogs: They didn't get it. They didn't give it to you. The budget that is going to come to the floor of this Senate is going to have structural changes which allow pay-go to be avoided for up to $2.5 trillion, at least that is what the House budget had in it, and the Senate budget was pretty close. Mr. President, $2.5 trillion will circumvent pay-go. The most egregious exercise will be in the health care area, where they have formally ended pay-go's applicability during the first 5-year window. They basically say openly: We are not going to comply with pay- go on health care. Health care is going to be the single biggest fiscal event this Congress has probably taken up in the last 20 years, maybe 30 years, maybe 40 years, maybe ever. Restructuring the health care of this country is a pretty doggone big exercise since it represents 17 percent of our economy. To say they are not going to apply pay-go to that exercise, to that effort, to that undertaking is to drive a hole through the pay-go concept that is so big it becomes not ``Swiss cheese-go'' but a great big, huge onion ring; there is basically nothing left but air in pay-go. When the Blue Dogs on the other side of the aisle start marching around: We have pay-go, we have pay-go, somebody ought to point out to them that their banner does not have a flag on it. Pay-go was taken down under health care rules and under the rest of this bill. It may make for a good press release, but it sure as heck doesn't have any substance to it. The second procedural event, of course, is this issue of reconciliation, which is a major issue for us on our side of the aisle, and it should be for the Senate. When the Senate was constructed, when our constitutional form of Government was put together, the idea was to have balance so we had a House of Representatives where things might happen quickly, but when it got to the Senate, there would be an airing, a hearing, consideration, and there would be due diligence on issues. That is why it was George Washington who described the House as the cup with the hot coffee in it and the Senate as the saucer into which the hot coffee is poured so it can be cooled down a little bit. The Senate is institutionally and constitutionally structured to be the place where we have debate, we have discussion, and we have amendments. That is the whole concept behind the Senate, especially on issues of massive public policy implications, and there is probably nothing we are going to take up on the domestic side of the ledger that has a bigger public policy implication than the rewriting of our entire health care system. Yet what is being proposed is that this rewrite of the entire health care system be done in a way that allows the Senate only 20 hours of debate, with essentially no amendments and with an up-or-down vote, yes or no, on something that affects 17 percent of the gross national product of this country, that affects every American in every walk of life in a very significant way, and that is how is their health care system delivered. Why wouldn't we want to have a full and clear, hopefully, and significant discussion of what we are doing to the American public and what the policy implications of health care reform are on the floor of the Senate? If we are going to get a good piece of legislation, we are going to have to have bipartisanship and going to have to have the American people believe it is fair. You cannot pass something as significant as health care and do it in a crammed-down manner, in a manner where it is totally partisan. Yet reconciliation is structured to accomplish just that. You have to have every stakeholder at the table. Granted, we are not going to win all our points, but we may have some points that are constructive to the debate. Let us at least be at the table and make those points on the floor of the Senate through the amendment process. Don't shut this Senate down and don't make us into the House of Representatives and don't essentially convert our constitutional form of Government, which is checks and balances, into a parliamentary form of Government, where there are essentially no checks and balances on the majority once it has an overwhelming position. That is what is being proposed in the bill when it pushes reconciliation as an option for the majority party in the area of health care reform. It is unfortunate. I appreciate the courtesy of the Chair. I ask unanimous consent that all quorum calls during debate on the Sebelius nomination be equally charged to both sides.

Mr. GREGG

Mr. GREGG. Mr. President, I understand the Senator from New York wishes to be recognized for 5 minutes, so I ask unanimous consent that I be recognized for 10 minutes following the Senator from New York.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to introduce legislation that provides the President with extraordinary, but critical authority under section 451 of the Foreign Assistance Act of 1961 with respect to assistance for Pakistan. Specifically, the bill allows the President to reprogram up to $500,000,000 of previously appropriated foreign operations funds for assistance for Pakistan if the President determines that it is in the vital national security interests of the U.S. to do so. The President must still report promptly to Congress on the exercise of this authority, and it is my expectation--although not legally binding--that reprogrammed funds will be reimbursed in subsequent annual or supplemental appropriations bills. Extended until September 30, 2010, this authority is required because of the increasingly dire situation in Pakistan and alarming news reports of territorial gains by extremists. While I do not pretend to have the answers to Pakistan's myriad challenges, I do know that the administration lacks the necessary authority to reprogram significant funds to respond to further political and economic deterioration in that country. Should the government of Pakistani President Zardari collapse, the administration will need maximum flexibility in its response. I can anticipate some may have a knee jerk reaction to the provision of such extraordinary authority. In response, I would remind my colleagues that regardless of their opinions of Pakistan's messy political situation, events in Pakistan directly impact Afghanistan-- and our troops on the ground there. Of course, this is in addition to the impact that destabilization would have on Pakistan's nuclear complex, specifically the combination of dozens of nuclear weapons, untested security systems, and a surplus of Islamic militants in the area. These issues are at the forefront of our security interests in the region and would exacerbate exponentially the impact of destabilization. It might interest my colleagues to know that current law limits section 451 reprogram authority to $25,000,000. In contrast, the supplemental budget request seeks $4,000,000,000 in special transfer authority for the Department of Defense to meet emerging requirements. Surely, the State Department should also have increased flexibility to react promptly to the economic and security needs of Pakistan should the worst case scenario transpire. I urge the relevant Committee to consider and act upon this legislation quickly.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to introduce legislation that provides the President with extraordinary, but critical authority under section 451 of the Foreign Assistance Act of 1961 with respect to assistance for Pakistan. Specifically, the bill allows the President to reprogram up to $500,000,000 of previously appropriated foreign operations funds for assistance for Pakistan if the President determines that it is in the vital national security interests of the U.S. to do so. The President must still report promptly to Congress on the exercise of this authority, and it is my expectation--although not legally binding--that reprogrammed funds will be reimbursed in subsequent annual or supplemental appropriations bills. Extended until September 30, 2010, this authority is required because of the increasingly dire situation in Pakistan and alarming news reports of territorial gains by extremists. While I do not pretend to have the answers to Pakistan's myriad challenges, I do know that the administration lacks the necessary authority to reprogram significant funds to respond to further political and economic deterioration in that country. Should the government of Pakistani President Zardari collapse, the administration will need maximum flexibility in its response. I can anticipate some may have a knee jerk reaction to the provision of such extraordinary authority. In response, I would remind my colleagues that regardless of their opinions of Pakistan's messy political situation, events in Pakistan directly impact Afghanistan-- and our troops on the ground there. Of course, this is in addition to the impact that destabilization would have on Pakistan's nuclear complex, specifically the combination of dozens of nuclear weapons, untested security systems, and a surplus of Islamic militants in the area. These issues are at the forefront of our security interests in the region and would exacerbate exponentially the impact of destabilization. It might interest my colleagues to know that current law limits section 451 reprogram authority to $25,000,000. In contrast, the supplemental budget request seeks $4,000,000,000 in special transfer authority for the Department of Defense to meet emerging requirements. Surely, the State Department should also have increased flexibility to react promptly to the economic and security needs of Pakistan should the worst case scenario transpire. I urge the relevant Committee to consider and act upon this legislation quickly.

Mr. GREGG

Mr. GREGG. Madam President, I ask unanimous consent that the next two speakers on our side to be recognized--and, of course, there be an alternative speaker possibly from the Democratic side--the next two speakers on our side are Senator Vitter for 10 minutes and then Senator Alexander for 10 minutes to talk about their motions to instruct.