Judd Gregg

Mr. GREGG

Mr. GREGG. That is absolutely right. That comes out of every American's ability to have a better lifestyle here. It means Americans will have to pay higher taxes, and they will not have as much discretionary money to spend on buying a house, sending their children to college, buying a car, and doing things Americans like to do in order to enjoy a good life. So much of the income of America will have to be poured into paying off the debt, which will be run up by this budget. There is an interesting fact that I know the Senator is aware of: By the time we get through the 10-year period proposed in the budget, the amount of money that we as a nation will pay in interest--just interest--on the Federal debt will be over $800 billion, or almost a trillion dollars. That is interest annually. That will be more money than we spend on defending America, on our national defense.

Mr. GREGG. The Senator is absolutely correct. We will spend this money for the purpose of paying interest and, as the Senator points out, maybe more than half the interest payment will go to the people in China, Russia or in the Middle Eastern countries, rather than spending it here to build better schools or basically make sure our national defense is adequate, which is the primary responsibility of the Government, or to build better roads or invest in energy. That seems to be a very bad policy to me.

Mr. GREGG. Mr. President, I believe we had an agreement that, under this amendment, our side would have 25 minutes and the other side would have 25 minutes. I ask unanimous consent that we be able to have another 5 minutes on our side, and then we will go to the other 25 minutes.

Mr. GREGG. I think they would be. First off, we are not barring the ability to bring a budget to the floor. We are simply saying any budget that anticipates the debt of the United States, which in this budget potentially is occurring or which would occur under this budget as proposed from the President, that has a general debt of over 90 percent of GDP, gross national product, requires 60 votes. Why shouldn't it? If you are going to do that and step off down the road of basically banana republicanism--is that a word?--you ought to have a major vote to do that, a supermajority to accomplish that. I don't want to be like some of these nations listed by the Senator from Tennessee. I would rather not find myself in a situation where we basically cannot afford our debt and we are passing on to our children a nation which has been so profligate in its spending that it ran up a debt to make it impossible for our kids to have such a life as good as the one we have had.

Mr. GREGG. Mr. President, I ask unanimous consent that all time remaining on the Alexander amendment be yielded back.

Mr. GREGG

Mr. GREGG. Madam President, we are awaiting a speaker, but while we await the speaker, who is on his way--I think Senator Specter is coming--I want to respond to a couple of points by the Senator from North Dakota.

Mr. GREGG. He quoted me, with a huge chart--I always appreciate that, get my name out there; my eloquence is once again reestablished--but it is regrettable that he didn't continue the quote. The point I made in that was that in the short term there is a necessity to spend money because the Government is the last source of liquidity right now, and we need that in order to try to get the economy going. But what is inexcusable about this budget is that in the years 2011, 2012, and beyond spending continues. It goes down from 28 percent to 23 percent and then it starts to go back up to 23, 24, 25 percent of gross domestic product. It is spending done entirely by deficits--an average of trillion-dollar deficits over the next 10 years under the President's budget. The point is, of course, you may have to spend now. We do have to spend now. The spending is not done that well. It was a total misappropriation of money. The stimulus bill was just walking around money for different interest groups in which the appropriators happen to have a vested interest. Legitimate. Most of them were very nice groups. But most of them didn't stimulate the economy. But after the stimulus event is over and the recession has abated, to continue this level of spending is unconscionable. It creates a debt that our children will have to bear, a debt that is unfair to pass on to them. My point, of course, is, as we move into the out-years we have to try to rein in spending, try to control spending because the issue is spending. That is the bottom line. The problem is spending. So you have this budget that has been proposed which is dramatically increasing the size of the Government intentionally. The President said he wants to do that. He said: I intend to create prosperity by expanding the size of the Government. He does it through creating a massive amount of debt--$9.2 trillion of new debt over the next 10 years, running the size of the debt as a burden on our economy up to 80 percent of gross domestic product--which is not sustainable and which will basically throw us into a situation where our children will not be able to afford the Government that is being passed on to them. So when the Senator quotes me--and I appreciate him quoting me--I wish he would continue the sentence or continue the paragraph or the thought because it is the rest of the thought where the issue lies. The issue doesn't lie in the short term; the issue lies in the long term. The issue lies in what we are passing on to our children. The issue lies in the fact that under this budget, as brought to us, the debt and the deficit are exploding at a rate that no country can support. None. It creates financial hardship for this Nation if we continue down this path. On another point, the Senator from North Dakota continues to bring up these charts about how they are bringing their deficit down below 3 percent, and the President has his up at 4.5 percent. The 4.5 percent is not sustainable. Everybody agrees with that. And 3 percent of the gross domestic product is barely sustainable. How do they get there? They get there by simply using the old- fashioned shell game around here, which has been used for years, which is not putting on the budget that which we absolutely know is going to occur. At least the President had the decency and forthrightness to put into his budget these things we absolutely know are going to be spent on. They claim with these reserve funds: ``Oh, we are responsible by doing reserve funds.'' That is a totally disingenuous statement. The President knows these reserve funds are not legitimate, and that is why he didn't use them. He put it in the doctor's fix and scored it. They put in a doctor's fix and don't score $90 billion, approximately. It is a significant amount. The President said we are not going to have AMT; we are going to have a permanent fix on AMT. For 3 years this budget that is brought to us doesn't score AMT as revenues, but for the last 2 years it scores it as revenues. Why do they take these revenues even though we know we are not going to get them? So they can make their numbers look better, get below this 3 percent level, which is just a game. Health care: The President in his budget says health care in his reform is going to cost about $400 billion over these first 5 years. Is any of that in this budget? None of it. A reserve fund, which is not even subject to pay-go, is used in order to mask that number. That helps to get below the 3 percent. I mean, it is the use of the old gimmicks, the things which we at least respect the President for having come forward and saying: They are gimmicks, and therefore I am not going to use them. So just lay the President's numbers over this budget, and you get the exact same budget. When Peter Orszag, Director of the OMB, said there is 98 percent identity between these budgets, he was right and the practical effect was right. The budget that was brought to the Senate floor is a profligate budget. It is a budget which basically goes out and spends at a level of 22 percent of gross domestic product for as far as the eye can see and generates revenues of 18 percent, 18.5 percent if they are lucky. That is after they raise taxes on the alleged wealthy--the small businesspeople of this country, the people who create the jobs--after they have hammered the small businesspeople who create jobs with a $1.4 trillion tax increase, hit us with a national sales tax on our electric bills, taking all that money and not using it to reduce the deficit at all, just use it to expand spending--after they have done all that, they have this huge gap which runs up debt, debt which is going to be unsustainable and unaffordable for our children. It is certainly not appropriate. But at least the President was honest about it and straightforward and did not use a bunch of gimmicks to try to hide it so we could have an open and fair debate about it. Unfortunately, that is not the case in the budget that is brought forward here. It is a budget which uses these games. Games which for a long time, have been used too often. I probably used a few of them when I was chairman. But it is about time, since we have a President who is willing to come forward and say: This is the way it should be done, that we follow his lead and at least have the integrity to say he was right when he was transparent. I yield the floor.

Mr. GREGG. Not to belabor the point, but if they are so devoid of gimmicks, why did they waive their own pay-go rule in the health care reserve fund? I mean, on the face of it, they lost the argument. It is their budget. It takes the pay-go rule and emasculates it, and it is their pay-go rule. They are not making them subject to their own rules of fiscal enforcement in their own budget. So, yes, gimmicks are replete. That is just one of them. The alternative minimum tax, that is a gimmick. They know they are not going to get the revenues from AMT. They score the revenue numbers from AMT in the last 2 years. That is a total gimmick. Everybody knows that is a gimmick here. We do not account for TARP II. Now, maybe they are not going to support their President on TARP II. They do not account for it, so I guess they figure the President does not need anymore money for assisting the financial stress the country is under; the President does. We do not account for it. Disaster costs. How do you eliminate disaster costs in the budget and claim it is not a gimmick? We all know there are disasters to fund. My goodness gracious. Clearly, there are disasters that are going to require significant funding. In an attempt to be forthright on that, the President put in a number. Taken out of this budget. Why? Because they wanted to get under this number, 3 percent. Nothing to do with whether disasters are going to occur or not occur over the next 5 years or whether we are going to spend money on them over the next 5 years. It was purely an accounting gimmick, nothing more, nothing less than an accounting gimmick. Health care reform. The President's own budget scores it at $372 billion. Do you think this Congress is going to step up and say to the President: Oh, we are going to pay for this, even though you do not think we should pay for it. I doubt that. I mean, another gimmick. The President was at least forthright and said it was going to cost $372 billion, and he put it in his budget. Why are they not paying for it on the other side, not because they do not think it is not going to be there, this cost, but because they want to get under this 3 percent. Interest. My goodness. How do you gimmick interest? Well, they did it. They are not accounting for the interest, which these expenditures obviously incur. Interest is a pretty stable number. You are either going to get it and have to pay for it or you are not. The fact is, the goal was to look better than the President, even when you were doing exactly what the President wanted you to do. It is pretty hard to come here with a straight face and claim your number is significantly different than the President's. It would be nice if it were. I wish it were. I wish it were. But it is not. What it all leads to is a massive amount of debt--a massive amount of debt. Even 3 percent is not sustainable. But, certainly, the real number, which is 4 to 5 percent, is clearly not sustainable. Even 60 percent, is not sustainable, which is the number they claim they get to. I mean, that is not sustainable. That is not an acceptable number, and, in fact, would not even get you into the European Union, it is so unsustainable. But it is not the real number, 80 percent is the number, 80 percent of public debt to GDP. That is the projected number. So these numbers are staggering. They should give everyone pause and cause them to say: What are we doing here? What are we doing to our kids? To our Nation? Are we going to hand them off to a country that is so deeply in debt, that is running up debt at such a significant rate, or are we going to try to kid our kids and say: Oh, well, you know, we--those numbers are not real. You are not going to get stuck with these numbers and this amount of debt. We know we are going to stick them with these numbers and this amount of debt. I hear all about this--we have all heard this almost interminably now: Well, the last administration did this, and the last administration did that. I would point out that this Congress was controlled by the Democratic Party for the last 2 years. So it was not just the Republican President, it was the Democratic Congress that was spending money. I have never been one to be very--to have defended the last President on the issue of spending because I thought the Presidency did not do a very good job on spending. I voted against most of the things that were passed around here that spent money. The Part D premium, which was the worst example, $8 trillion unfunded liability. The agriculture bill, massive expansion, inappropriate. Done. Highway bill. Massive expenditure, $26 billion dollars of earmarks. So, yes, there was failure to discipline the budget on the spending side of the ledger in the last Presidency. But there was an accomplice around here. It was called the Democratic Congress. Now, regrettably, we have a President who said very openly, he is going to spend money, and a lot of it, to promote prosperity by expanding the size of Government on all these different accounts which he deems to be worthy. I imagine they are worthy. The only problem is we cannot afford them as a culture or as a government because the cost to our children will be a debt they cannot bear. You can try to pass a budget that covers that up through games and darts and gimmicks and shell games and various little exercises in redoing the accounting rules, such as changing pay-go. But in the end, we all know what it is going to lead to, which is a deficit and a debt that is not sustainable and a nation put at risk as a result of that.

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

Mr. GREGG. Mr. President, I appreciate the courtesy of the Senator from North Dakota, who is always extraordinarily courteous, professional, and generous. Before we begin the specific debate on the issue of the budget, which obviously we both have to be here for--and I know he has a lot of things going on in North Dakota with the flooding--I would like to make a few remarks off topic. (The further remarks of Mr. Gregg and Mr. Conrad are printed in today's Record under ``Morning Business.'')

Mr. GREGG. Thank you, Mr. President. Let me first thank the chairman for his generous comments, and let me second those relative to himself and his staff. We obviously have a deep difference of opinion as to the best way to proceed relative to shepherding the financial house of our Nation, and especially specifically relative to this budget that has been sent to us by this President. But I have an immense amount of respect for him and his staff, who are professional and extremely courteous, and we have a great personal and working relationship, which actually makes the job much more enjoyable as a result of that. And, of course, we send to North Dakota our deep concerns about what they are going through with the floods. I know the Senator was out there this weekend supporting the folks who are working so hard to try to protect their communities--an amazing story: 80,000 volunteers in a town of 90,000. It is very impressive. Let's hope the waters recede before they do any more damage. I should mention that UNH beat North Dakota in the hockey game this weekend in the NCAA. I noticed my colleague from North Dakota did not actually mention that.

Mr. GREGG. Nor do we.

Mr. GREGG. It was an exciting game, and North Dakota played extraordinarily well. Mr. President, we do differ on this budget. The budget that has been proposed by the President of the United States has essentially been given its stamp of approval by what has been brought forward by the Senator from North Dakota. There are virtually no differences. As Director Orszag said, they are 98 percent the same, and they are. This budget, in our opinion, represents a clear and present danger to the financial health of our Nation and to the financial security of our children. It is a budget which spends far too much money, taxes far too much, and borrows an extraordinary amount--it is clearly far too much. It basically repeals the essential laws of common sense--the essential laws of common sense--that say you cannot simply keep spending at a rate that you cannot afford to pay for forever and not have to suffer as a society, and suffer significantly. Margaret Thatcher sort of captured the tempo of this budget. To paraphrase her, she might have said about this budget: The problem with the Obama budget is that at some point you run out of money. If you follow the proposals of this budget, you are going to run out of money sooner rather than later. In order to understand this budget, you have to understand the dramatic nature of this budget. Historically, when we have debated budgets in this body, they have been important because they obviously represent guideposts for our Congress, but they have not been a philosophical document that has redirected the Nation fundamentally. On the part of the President--I give him credit that he is not trying to hide this--his budget openly attempts to redirect the Government of the United States and move it significantly, dramatically to the left, expanding the role of the Government in all sorts of areas, expanding the cost of Government in a historic way, and expanding the burden of the Government in the area of taxes and in the area of borrowing in a way which we have never contemplated as a nation. To try to put it into perspective, under the budget prepared by the President and sent up here--and it is essentially the same as the budget we are receiving from the Senate Democrats today--the President's budget doubles the national debt in 5 years. That is pretty bad. Then it triples the national debt in 10 years. And that is intolerable. Now, I have tried to figure out how you explain to people what $1 trillion or what $15 trillion is or what $17 trillion is. It is very hard. Conceptually, it is extraordinarily difficult to get your hands around what $1 trillion is. As you can see, I had this chart made up when the original estimate was $15 trillion--it went up to $17 trillion--to show the number of zeros here. It is a staggering amount of money that is being added to the Federal debt. You have to ask yourself: Who is going to pay all this money? This is real money. It has been spent on programs the President wants. Who is going to pay it all? Who is going to pay $15 trillion--with all of these zeros? Well, unfortunately, our children and our children's children get that debt. It gets put on their backs. At the end of the President's budget, the average household in this country will owe $130,000 in debt for the Federal Government--$130,000. They will have an interest payment on this debt--the average household--of over $6,000. So the debt they are getting may actually exceed the value of their house. Put another way--which was first coined by my esteemed chairman--he designed this wall of debt. This is the wall of debt, as shown on this chart. This is what the Federal debt does over the period of the Obama budget. It goes straight up. It is a massive wall of debt, which is an incredible burden on our Nation, and really an unacceptable burden if you are going to be accurate about it. To try to put it in a more understandable term, as shown on this chart: This is a picture of President Obama, of course, on the right side of the chart. On the left side of the chart are pictures of all the Presidents we have had in our Nation since our Nation began 232 years ago, starting with George Washington and going through George W. Bush. In that period, from George Washington through people such as Madison, Adams, Lincoln, Grant, Hayes, Wilson, Roosevelt the first, Roosevelt the second, Truman--in this period from George Washington all the way through George W. Bush, we have accumulated about $5.8 trillion of national debt. That is how much those Presidents added to our national debt. Within the first 5 years of this Presidency, President Obama will add more debt on the backs of our people and our Nation than all these Presidents put together. Within 5 years, he will have taken the total debt put on the backs of Americans and doubled it since the country began--a staggering fact. Now, does this have to happen, the addition of all this debt because of the fact that he has inherited a terrible situation? And he has, and we all admit to that; this economy is in a very difficult way. No, it does not. Yes, in the short term there has to be a government that is run at a deficit in a very significant way in order to try to get the economy going because we all understand the Federal Government is, right now, the only liquid entity around here. So the money is being pumped into the economy to try to give it some lift. But this recession is not going to go on forever. We are a resilient nation. We will recover from this recession. It will be over hopefully sooner rather than later. But it certainly is not going to run that much longer in the terms of this Presidency. Certainly, by the midterm of this Presidency, we should be out of this recession. So you would presume--you would presume--at that point, say, in 2011 or 2012 at the latest, the spending of the Government and the deficit of the Government would start to come under control, that there would be some attempts to bring it down and manage it in a more historic way. Unfortunately, that does not happen under this budget. What the President is proposing is that we continue to grow the size of Government at an extraordinary rate, independent of whether we are in a recession. The average deficit over the term of this President's budget is $1 trillion a year--$1 trillion a year. That is a staggering number. To put it in a historical context, that adds up to about 5 to 6 percent of gross domestic product, and historically the deficit has been about 2 percent of gross domestic product. At the end of this Presidency, the public debt, which is what people own outside the Government, will be 80 percent of the productivity of the country--80 percent of the productivity of the country. What does that mean, 80 percent of the productivity of the country? Well, historically, the public debt has been about 40 percent of the productivity of the country, but under this President, he is going to take that public debt very quickly up to 60 percent, then to 70 percent, and then, by the end of the period of the budget proposed, it will be at 80 percent. That is such a high number, when you couple it with the deficits of $1 trillion a year, that you get to a point where it is simply not sustainable. That is why this budget is a clear and present danger to the fiscal health of this Nation and to the opportunities of our children. In fact, ironically, if the United States were to try to seek membership into the European Union--which, of course, we have no interest in doing, but those are all industrialized nations and they do have a standard for operating their governments in a responsible way. The standard of the European Union is, public debt can't exceed 60 percent of Gross Domestic Product, that deficits can't exceed 3 percent of GDP. We will be twice that number, and it is not sustainable. Now, did this have to happen? Did the President have to run up these debts? If we had stayed on a pure glidepath and done nothing--in other words, operated the Government as it is--as it is--this blue line would be the cost of the Government. We would actually almost be in balance by the year 2018. That is current law. Now, CBO uses very arcane rules as to how it builds a baseline, but it is the baseline that we determine as a Congress to use. I wouldn't accept that baseline as a recipe for future policy because there are some tax increases in there I don't like, but even if you were to factor out the tax increases, the line would come in the middle here. The reason this goes up so significantly, the reason President Obama's budget goes up so significantly in its deficits is because they propose a radical increase in spending. It is pretty much that simple. It is not about economics or taxes; it is about spending. Essentially, the President's proposal is to incredibly increase the size of the Federal Government and the amount it spends, not only in the short run, which we all accept is necessary--although it has been poorly handled relative to the stimulus bill; worse than poorly handled, it has been a waste of money relative to the stimulus bill--but this is the spike in spending to reflect the deficit and the attempt to address it through the stimulus bill. But look here: After we are out of the recession in the year 2011, the line keeps on going way up--way up--to 25 percent of GDP by the end of this budget. Well, you say, what does that mean, 25 percent of GDP. Well, how big a government is relative to the productivity of the economy defines how productive the economy will be. You can't have a productive economy if the Government is taking out all the money. It doesn't work very well. Historically, we as a country have tried to keep--and this is the black line here, and you will see it has been very level ever since the year 1958--this is the average, this black line, of how much spending the Government has done. It is around 20 percent of GDP, the product of the United States. Under the Obama years, as proposed by President Obama, that is going to be increased at a staggering rate--huge increases in spending. President Obama is not trying to hide this. He has not tried to be-- he has been very open about it. He said, to paraphrase him, essentially: I believe we create more prosperity by expanding the size of Government in a number of areas. In fact, if you listen to the Senator from North Dakota, he listed all these areas they are going to explode the size of Government in, moving it dramatically to the left, and increasing it at an incredible rate. In the budget document he sent, he said exactly that. He said: At this particular moment, Government must lead the way in providing the short-term boost necessary to lift us from a recession that is severe and lay the foundation for prosperity. He went on to say he intended to do this by spending a great deal of money on his priorities, which were clean energy, education, health care, and new infrastructure. However, he doesn't stop spending the money after this recessionary period; he keeps it going into the outyears at a rate which is not sustainable. It is simply not sustainable. You can't take the money from the productive side--from the people who are working and producing jobs and taking risks and going out there and actually producing wealth for this Nation, in the sense that they are actually producing something we have to sell and use in trade and basically create jobs as a result of that-- you can't take the money from them and move it over to the Government at a rate that exceeds the historical norm at this level and expect you are going to be able to maintain prosperity for the years to come. It doesn't work. It does not work. As Margaret Thatcher says, you eventually run out of money. The effect of this massive increase in spending is a massive increase in debt. This is the national debt, publicly held debt, which I discussed before, as a percentage of GDP. It averages about 36 percent since 1958. That is the black line right here. It has been up, it has been down, but that is the average. Under President Obama's plan, it goes straight through the roof, and this, I say to my colleagues, is the threat. This is the threat. This is the clear and present danger to our people, to our Nation, and to our children's future, because when you get debt up to that level, you are not able to function as a government. People get concerned about buying your bonds and buying your dollars and using your currency. You don't have to listen to me to find out that is the case. The Chinese Government has made that very clear, and they happen to be the biggest holder of our dollars. In fact, the chairman is always talking about how outrageous it is that the Chinese own so much of our debt. Well, they own it because they considered it to be a good investment, and if they didn't own it, we would be paying a lot more in interest payments and in taxes in this country and our dollar would be less valuable. But Mr. Zhou, the governor of the central bank in China, has said he is getting concerned about this crisis and about the value of our dollar. The Premier of China said: ``We lent such huge funds to the United States and, of course, we are concerned about the security of our assets.'' Well, it is disconcerting and obviously not very nice to find out for us as a nation--one that has always considered itself to be a reasonably independent and strong Nation, the most independent and strongest in the world--that the Premier of China, who owns most of our debt outside the United States, is worried about it. Why is he worried about it? Why are the Chinese worried about it? Why are the other nations which buy our debt worried about it? Because they look at this line, they look at this budget. This isn't done in a vacuum. They know what this budget proposes. The President's budget proposes massive increases in spending but absolutely no fiscal discipline. It has discretionary spending jumping by $1.4 trillion-- trillion--it has mandatory spending, a net mandatory spending increase, as it was sent up here, of $1.1 trillion, and it has zero savings in the core accounts, which are mandatory accounts. That leads to these massive debts. It also has, interestingly enough, $1.5 trillion in new taxes. Now, that is a pretty staggering figure in and of itself, $1.5 trillion. I was entertained to hear my colleague from North Dakota say: Well, actually, we get a tax cut in this bill. That is going to come as a real surprise to all the people whose taxes are going to go up very significantly as a result of this budget. For small business people, taxes are going to go up dramatically as a result of this budget. People who take charitable deductions and homeowner deductions in the higher brackets, their taxes are going to go up, which will probably affect charitable giving under this bill. But the most insidious tax proposed in this budget is something euphemistically called a carbon tax. Well, what is a carbon tax? That is a way to bury a term so you never understand what they are doing. A carbon tax is literally a new national sales tax on your electric bills, a brand new national sales tax. We don't have a national sales tax in this country. What is being proposed in this budget by this President is a brand new national sales tax on your electric bill. So every time you hit your light switch in your house, you are going to get hit with a new tax--a sales tax--and it is a big one. It is a big one. The White House sent this specious estimate of it. They said it was $646 billion, but that was low-balling the number. MIT, which doesn't have a dog in this fight, took a look at a similar proposal, along with a number of other groups, and they said it would actually generate over $300 billion in new taxes every year. It works out to about $3,000 per household. So everybody living in America today who has an electric bill or other energy bills, as a result of this new national sales tax, if the President gets what he wants, is going to pay $3,000 more in taxes a year, on average, for their energy bills. That is a huge tax, and it is an incredibly regressive tax. I saw this chart that the chairman brought up, saying we are going to create green jobs. That is all about this energy tax, by the way. That is akin to calling it a carbon tax; they are going to call it creating green jobs. What are they going to call the jobs they are sending overseas? Because industries in this country, which have to use a lot of electricity-- those are the hard-core industries that we still have in this country-- can no longer compete because they got hit with this massive increase in taxes on their energy production and use. What are they going to call those jobs? Green jobs sent overseas? The simple fact is, this type of tax increase is incredibly regressive. Sales taxes are regressive by definition, but a sales tax that is targeted on the productive side of the ledger, as this one is, is exceptionally regressive, as is the dramatic increases in taxes on small businesses in this country. Now, my colleague has said a number of things about how their budget is different from the President's. It is a little bit different, but it is 98 percent the same, and that is the score. I think I have a chart which reflects that. This is the difference between the two budgets. They are identical on discretionary for all intents and purposes, identical on outlays, identical on revenues. Interestingly enough, however, CBO came back and gave us--CBO is the Congressional Budget Office--an honest evaluation of the President's budget, and some of the things they said, which hopefully scared a few people around here, were that the President's budget increased deficit spending by $9.2 trillion over 10 years, $2.3 trillion more than what the President had told us; that on an annual basis, it averages out to a budget deficit of about $1 trillion a year, and that the percent of public debt jumps, as I have mentioned, but it needs to be reemphasized that it jumps from what it is today to 80 percent of GDP. The deficits jump to 5 or 6 percent of GDP. The administration has had both the Treasury Secretary and the OMB Director up here over the years--the OMB Director has been coming up here for years but the Treasury Secretary just recently--testifying that the deficits in excess of 3 percent weren't sustainable. They said that; we didn't say that. So when CBO honestly evaluated their budget and did things such as actually calculate the fact that there was 8.1 percent unemployment, and it is probably going to go up and, as the President said, the top rate would be 8.1 percent, but we weren't there yet--when CBO put the real numbers onto the President's numbers and got these massive increases in spending and in debt, well, these folks decided that we cannot have that. They wanted to get that back down to 3 percent. Did they do it by reducing spending or reducing any of the President's spending initiatives? No. Zero. Do you know how they did it? They did it by playing the old-fashioned games around here of smoke and mirrors and hiding the ball, saying one thing but meaning another. The President, to his credit, and to the credit of Mr. Orszag, was forthright in their budget, which was probably as close to an honest statement--with exception of the defense number--of what was really happening here relative to spending and what was going to happen as we have had in a long time. I congratulated them for that and still do. But we went backward with this proposal from the Democratic leadership. So that they could get it below 3 percent as a percentage of GDP and get their deficit and debt numbers down, they left out of their budget $1.1 trillion of spending and taxes that President Obama had in his. They are not different, so it is just games. They didn't score their budget correctly or honestly or straightforward. Their budget becomes the ``tax too much, spend too much, borrow too much, and now hide too much'' budget. At least the President's budget wasn't a ``hide too much'' budget, although his defense number has serious problems with it. At least he didn't take $1.1 trillion in very illusory action, moving the shell around so that you cannot find the real numbers, claiming they made real savings in those accounts. It is actually just pretty ridiculous to take that step backward. Of course, they now claim that they cut the deficit in half. Now, that is where we depart from common sense. There are a lot of things on which they tried to repeal the law of common sense in their budget, but this is the most outrageous. First, they increased the deficit fivefold and then they reduce it back to half of that and then claim they are cutting the deficit in half. That is like taking six steps back, three steps forward, and saying you are making progress. You are not making any progress. They are so far out of whack with what has been the historical norm that it is not even acceptable. The deficit they ended up with after taking six steps back and three steps forward is still in the 4-percent range. It is still throwing debt on the books at a rate you cannot afford, and it is absurd to claim that is fiscally responsible. Well, before I get into what we would do, I will mention a couple of gimmicks that are played here because they are beyond the shell game gimmick, which is pretty outrageous--moving around $1.1 trillion so they don't have to put it on the budget. They take it off budget, essentially, so they can look as if they are doing better than the President, even though they have the exact same policies and numbers as the President, for all intents and purposes. They do a couple other things. They have reserve funds--lots of them. This is a way to make like you are doing something that is fiscally responsible by saying: You cannot spend this money unless you can pay for it. The only problem is that they make the reserve funds in the most critical area--specifically, health care, which we all know we are going to want to address this year. They create this incredible activity. They put into place a health care reserve fund, which means they are going to rewrite the policy of health care for this country. Every part of this Nation is going to be affected. You heard the chairman say that 17 percent of the gross domestic product in this country is involved in health care. The purpose of this proposal--the health care reserve fund--is to address that 17 percent. There is virtually nothing in this country that isn't affected by that. Either everyone is directly affected or a member of their family is or their job is. There is a rule here called pay-go, which has become the mantra of the other side of the aisle about how they are going to be fiscally disciplined. I never heard anyone from the Democratic party or the Congress, including the President when he was running for President and running for Senate, fail to talk about how they were going to use pay- go to discipline the Federal Government because it implies that they are going to pay for what they are doing. It is a great term, by the way. The only problem is, they don't ever use it. They claim they are going to do it, but they never do. I call it ``Swiss cheese-go'' because there are so many holes in it. In the last 3 years, when the Democrats ran the Congress, they avoided pay-go in the amount of $341 billion in spending. This health care trust fund is a brazen act of putting a hole in pay- go. Up front, they say we are not going to apply pay-go to health care reform. Pay-go has a rule that says that in the first 6 years you have to meet it, and the second 5 years you have to meet it. No, we are not going to do that; we are going to be able to spend it over 11 years before you have to meet the pay-go rules. Why don't you just give it up and say we are not going to discipline ourselves. There is no pay-go rule, and it is a problem. The second gimmick that really concerns me--it is more than a gimmick--is a big-time exercise of threatening the prerogative of the Senate and the constitutional purpose of the Senate, which is the use of reconciliation. This is a term of art, and nobody outside the Congress really understands it. Essentially, reconciliation was put into the budget process when the budget was created for the purpose of making sure that what the budget said should be spent or should be taxed actually occurs, so that there was a procedure to reconcile--to say to committees if they exceeded a certain amount of spending and it wasn't inside the budget: You must change that spending; if your tax policy created more of a deficit, you must change that tax policy. It is a procedure which, over the years, has evolved. It has been used aggressively by both President Clinton and President Bush to pursue policies that already exist or to adjust policies that already exist-- whether it happens to be already existing laws on welfare or existing laws on tax policy. Yes, it has been used effectively and aggressively in those areas. But it has never been used to create a brand new policy on something that has as dramatic and all-encompassing and pervasive effect on the American public as to change the entire health care system or something like that. It has never been used to create out of whole cloth, ab initio, a brand new major tax system, such as a national sales tax on electric bills, and its use is solely a purpose of the Senate. The House doesn't need reconciliation. How does reconciliation work? It basically eliminates the prerogative of the Senate to amend the bill. The greatest prerogative of the Senate is that we have the right to debate, to discuss, and to amend legislation. The House doesn't have that right. The House has something called a Rules Committee, and it is under the control of the Speaker. The membership of the Rules Committee is made up 2 to 1, plus 1, so the Speaker could never lose a vote in the Rules Committee. The Rules Committee sets out for the House of Representatives when a bill comes to the floor--no matter the policy of the bill--and that you will have this many hours of debate and they will allow this many amendments and here is what they are. They can run through a bill in a half hour if they want. That is the way the House has functioned for years. It is the way the House was supposed to function when it was set up constitutionally. The Senate, on the other hand, has no such rule. When a bill is brought to the floor of the Senate, it is open for debate, discussion, and amendment. If you can get 60 votes, you can get it off the floor. The budget sets up a process to allow the Senate to function more like the House. The budget is on the floor for 50 hours of debate. Amendments are allowed--any amendment, really, but at some point people run out of energy and stop offering amendments--and there has to be a vote. In order to reconcile parts of the budget, the reconciliation system was set up where there is 20 hours of debate and virtually no amendments because they would have to be germane, and that is a high standard to meet here. So the reconciliation situation is that it allows you to basically ram through the Senate--as you would through the House--a bill without amendment, discussion, debate, or amendments. It is a huge weapon. If used incorrectly, it fundamentally undermines the constitutional purpose of the Senate. It turns the Senate into the House of Representatives and makes us a body in which amendments are not allowed and debate doesn't occur, of any significance. It has a truly debilitating effect on the idea that you will have a body in this constitutionally structured Government of economics and balances where debate occurs vociferously and aggressively and where problems can be aired out in a more timely and orderly manner than occurs in the House of Representatives. So it should never be used to ab initio create a massive, new program, such as a tax on everyone's electric bill. It should never be used for the purpose of undertaking a major policy event, such as rewriting the health care of the United States, which will affect everybody. To the chairman's credit, he doesn't have it in this bill. He understands that. He has spoken out fairly effectively on this point-- probably more concisely and effectively than I have spoken on it. But the House of Representatives has put reconciliation instructions in. What earthly reason could there be for the House of Representatives to put reconciliation instructions in their bill? They don't need it; they have a Rules Committee. It is obvious. This is a game, a very dangerous game. The House puts in reconciliation instructions but the Senate doesn't put it in because the leadership knows that maybe it cannot get that across the floor and doesn't want a vote on such a thing. So they can take it to conference and, much to nobody's surprise, the conference budget comes back with reconciliation instructions, which control activities on the Senate floor. It is totally inappropriate that the House should be dictating to the Senate how we are going to legislate and structure our debate system here on the floor and try to make us into the House of Representatives. It is unconscionable in the context of the constitutional structure of our Government. Yet that is the game that is being played here, and it is a cynical game. It is totally wrong. If for no other reason, everyone in this body should not vote for a budget that has reconciliation in it. On our side of the aisle, we think we can do better. I have talked at some length about the clear and present danger this budget represents to our children because of the massive increase in debt. We don't think that has to be the course of action. You don't have to run the spending of the United States up to 23 percent of GDP, which this chart reflects, way above 25 actually, way above the historical norm. That is not necessary. Short-term spending may be necessary for this significant problem we have with the recession, but you do not have to take the Government and expand it radically, move it to the left, and spend money on what these groups are and constituencies are at this rate. The Government should live within the basic historic norm of 20 percent of GDP as part of its spending. That is where we part ways philosophically. The President genuinely believes, and the party passing this budget, the Democratic Party, generally believes you create prosperity--and the President said it; he used those terms--you create prosperity by expanding the Government significantly in these different areas of social interest. You do not if you are spending up those areas so much that people cannot afford it. It does not happen that way. The way you create prosperity is by keeping Government at an affordable level, doing what it is supposed to do while you give individuals the ability to go out and be productive, take risks, and create jobs. That is a difference of philosophy here. When the President proposed in his budget the way he is going to address health care, where we presently spend 17 percent of our gross national product on health care right now--that is 5 to 6 percentage points more than the next closest industrialized nation, so there is a huge amount of money being spent on health care--he proposes we explode that spending by another $1.2 trillion. We don't have to. We can get every American insurance, and good insurance, without radically increasing the amount we are spending on health care. We can do it by more effectively spending the money we already have in the health care system. If you are spending 17 percent of the gross domestic product on health care, you do not have to take it up to 18, 19, 20 percent. In fact, if you do, you are probably not getting much efficiency out of it. Rather, spend more efficiently the money you are already spending. We believe as a party that everybody has a right to decent health care insurance, and we also believe as a party we can do that within the context of the money that is already available by being more efficient, by giving people more choices, and by not putting the Government between patients and their doctors. We do not believe in nationalizing the health care system, which is basically what these numbers are, the stalking horse for, that the President is proposing. In the area of energy, the President's answer to energy is that you put in place a new national sales tax, as I have mentioned before, on every electric bill in this country, everybody's electric bill, so that when you turn on your light switch you get hit with a new sales tax. That is probably not going to produce a whole lot of energy. It is going to probably undermine the productivity of our economy, and it certainly is going to ship a lot of jobs offshore. The way to produce a better energy policy is to look in an environmentally sound way for more American supply and you can conserve more energy. So we drill, and we can drill in an environmentally sound way in identified offshore areas and produce more American energy. You create more powerplants through using nuclear power, a totally clean form of energy from the standpoint of pollution to our air. You use wind, solar, and other alternatives, but you acknowledge the fact that you cannot possibly get to the goal we have to get to, which is enough energy to continue to maintain our international competitiveness as a nation and continue our prosperity as a nation, if we are just using solar and wind. Solar and wind make up 2 percent of our national energy supply. If you triple it, you only get 6 percent, and tripling it would be a little difficult because there are a lot of people who do not want windmills in front of their houses, whereas nuclear can be expanded, whereas we can drill and find more American energy more effectively, whereas we can use oil shale, which we have more of than Saudi Arabia has oil, to produce energy more effectively, and we can be more conservation minded, and there is agreement on that, obviously, on both sides of the aisle. But you do not accomplish this by sticking the American people with a brand new national sales tax. In the area of cost discipline, clearly we do not have to run up spending at these rates. We should bring them back down, and the way you bring them back down is by addressing entitlement spending. This budget that was sent up by the President of the United States, who claims he is interested in fiscal responsibility--although, obviously, it is sorely tested by the numbers in this budget, these trillions of dollars of new debt--does not, on net, reduce the entitlement accounts. He does suggest that Part D premiums be paid for in part by wealthy people. I agree with that. We have actually offered that amendment on our side of the aisle for the last 2 years under this Democratic Congress and were beaten every year on that proposal. I am glad the President is on our side this time. Maybe we will be able to adopt it. It is called the Ensign amendment. The fact is, unless you have a comprehensive approach to disciplining entitlement spending so it is affordable, and we continue to deliver reasonably good quality care and support to senior citizens, we are not going to get these spending issues under control. You cannot kick this can down the road, as the President has said. You have to start, and the President has not started now. This budget has nothing in it to that effect. In one other area where we would do something significantly different is defense. This budget basically assumes a declining funding of defense for the next 10 years that is significantly less than what is presently funded as a percentage of GDP. We are at war. I wish al-Qaida was going to go away. I wish these folks who represent such a huge and immediate threat to us, especially if they get their hands on a weapon of mass destruction, did not exist, but they do. They do exist, and they are a threat--a very significant threat. We cannot confront them through goodwill because they are not interested in goodwill. We have to confront them with a military that is properly funded, properly cared for, and properly armed. That, unfortunately, takes money. The first obligation, the first absolutely most important obligation of the Federal Government is national defense. Yet this budget, first, does not include sufficient funding for the President's war costs and, second, as a practical matter, it simply assumes that you can run the military on the cheap, I guess, and that is a big mistake. We do have differences, as Chairman Conrad has said, over how this budget is structured. They come back to this very core issue of debt, of what we are leaving our children, what we are passing on to our children. It is simply not right for one generation to give another generation less than what we received from our parents. We, as a nation, have always--always--had the older generation pass to the younger generation a better, stronger, and more prosperous nation. Yet we are now on a pathway, if this budget is followed forward, where the debt and the deficits will be so high that our children will not be able to have as good a life as we have had. The cost of maintaining this Government will so burden them their ability to finance a home, buy a home, send their kids to college, or just live a lifestyle that is something of the level and enjoyment and prosperity that we have had will be seriously--seriously--threatened. It is not fair to do that, not fair for one generation to do that to another generation. Yet the numbers do not lie. I understand the Democrats did not want to show us the second 5 years of the budget. They hid it, along with a lot of other things they hid, in this budget, but the President showed us the second 5 years of the budget. Every American should take pause because when you see the debt go up by $9.2 trillion, when you see the public debt ratio to GDP go to 80 percent, when you see deficits annually of $1 trillion a year on average for as far as you can see, when you see a deficit rate of 5 to 6 percent of GDP, you are talking about a country which is headed toward a fiscal crisis the likes of which we probably have not seen since the Great Depression. It is a country which cannot afford its Government. It is a nation that will be passing on to its children significantly less than was passed on to us. Mr. President, I yield the floor. I suggest the absence of a quorum.

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 that for the remainder of this debate on the budget over the next 50 hours, the time be equally divided under a quorum call.

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

Mr. GREGG. Mr. President, at this point, I yield to the Senator from Iowa, and I ask unanimous consent that upon completion of his statement, unless the Democratic membership has a speaker to intercede, the next speaker be the Senator from South Dakota, who will be recognized to offer the first amendment, which I understand on our side is going to be acceptable.

Mr. GREGG. Yes.

Mr. GREGG. Mr. President, I yield the Senator 6 minutes.

Mr. GREGG. Mr. President, I wish to congratulate the Senator from Alabama, who has always succinctly and effectively described what we are confronting here, which is a wall of debt, a massive wall of debt, which will overwhelm our children. So I thank him for his statement. At this point, I think the chairman had some comments on proceeding.

Mr. GREGG

Mr. GREGG. I rise this morning on behalf of Kathy and myself to express our deepest sympathies to the family of CPL Michael Ouellette. Corporal Ouellette died in Afghanistan last week, and his funeral is today. I have spoken with his mother, and, of course, he was an exceptional individual. These young men who serve us in the military are all exceptional. He served two tours of duty in Iraq, was decorated, and then went to Afghanistan to serve again. On behalf of the people of New Hampshire and our Nation, I thank his parents for having raised such an extraordinary child. We appreciate and thank them for the service he has given this Nation, and we obviously express our deepest concern during this extremely difficult period.

Mr. GREGG

Mr. GREGG. Mr. President, on rollcall vote No. 115, I voted ``nay.'' It was my intention to vote ``yea.'' I ask unanimous consent that I be permitted to change my vote, which will not affect the outcome.

Mr. GREGG

Mr. GREGG. Mr. President, I wish to speak and continue the discussion which was raised by the Senator from Tennessee and the Republican leader earlier on the issue of where the budget that has been proposed by the President is going to take us. There are a lot of concerns raised by this budget. Most of us have been willing to say we understand the President has inherited a very difficult financial situation; that, therefore, we accept the fact, in the short run this year and for much of next year, potentially a lot of money is going to have to be spent very quickly in order to try to refloat the economy. The Federal Government is the only place where there is liquidity right now, and that liquidity is being used aggressively to try to get the economy going again. The problem the President's budget has is, as we get past this next year, year and a half of recession and we get further down the road in his budget, the budget he has sent up to us continues to dramatically increase spending, dramatically increase borrowing, and dramatically increase taxes. As we get into the third and fourth year of this budget, instead of seeing the numbers come back down to something that is manageable, we see a deficit running in the 4- to 5-percent range of GDP. We see a public debt-to-GDP ratio in the 60- to 80-percent range. These are numbers that cannot be sustained. They add up to massive debt. This chart shows the situation in fairly stark terms. Historically, the national debt has been around 35 percent of GDP. That is a sustainable level. I think if you talk to most people in the economic area, they will say a government can do quite well if its national debt can be contained at that level. Unfortunately, under President Obama's proposal, that debt goes straight up, and by the end of the 10-year window which his budget covers, it is at 80 percent of gross national product. That is not sustainable. That essentially means we are putting on the books a debt which we have to pay as citizens of this country, which is unaffordable for the citizens in this country. It has a lot of practical implications which are all very serious and about which we should be concerned. The most obvious is that when we run up this much debt, somebody has to pay it and that means our kids and our grandkids. They are going to have to pay this debt off. Instead of maybe being able to buy a house, send their kids to college or live the lifestyle our generation has lived, they are not going to be able to do that because the debt burden on them is going to be so high that burden will overwhelm their ability to live the same quality of life that we have. Equally important is the effect it probably will have on the value of the money of the United States, the dollar. There are only two ways you can handle it when you run debt up such as this. Either you dramatically raise taxes--and you basically make it virtually impossible for Americans to be productive if you raise taxes as much as this debt would cost to pay off--or you do something called monetizing the debt, which is a technical term for creating inflation. Inflation is a pretty big evil. If you get on a course of inflation, you quickly go into a spiral that is downward as a nation and as an economy. This debt on this present path, as proposed by the President, will lead us to that spot. There is another problem this creates, equally significant and about which we are already hearing, and that is, for people who are observant and people who look at our Nation, especially if they are lending us money--and the whole world is lending us money, especially the Chinese--they look at our debt and they say: Is it manageable? Can the United States maintain this level of debt and still be a productive country, still be able to be prosperous? There are beginning to be signs of people saying: No, we are not so sure that is true. We are not sure that is going to be the best thing to happen. So the value of the dollar starts to change and gets decreased. Equally important, people become restive about buying our debt, about financing this great spending spree which this administration has proposed by lending us money. In fact, we have now heard two major statements from the Chinese leadership. The Premier of China has specifically said that he is concerned about the value of his investments in the United States. Remember, China holds the majority of our debt. Now we see, from Mr. Zhou--I believe that is how he pronounces his name--the head of their Federal Reserve, essentially that they are so concerned about our debt situation and our lack of management of our fiscal house that they want to change what is basically known as the world currency reserve from dollars into some other currency. They are suggesting it be something controlled by the IMF, a currency produced by the IMF. That is not a vote of confidence in where we are going as a country by our biggest creditor. It is unfortunate, very unfortunate, that we have to listen to the views of China and take them seriously on this issue. It did not used to be that way. But, regrettably, whether we like it or not, as we run up all this debt we have to find somebody to buy it because this debt is operating our Government and we as a nation do not have the wherewithal to buy it, we have to sell it to other nations, and the primary nations with currency reserves today are China and Russia and some of your oil-producing states in the Middle East. These are not necessarily nations which are all that sympathetic to our problems, especially when our problems are fairly self-inflicted--and by self- inflicted, I mean this administration has sent up a budget which dramatically increases spending and dramatically increases taxes at the same time it borrows a huge amount of money. Trying to put this in real-world specifics, if you take all the debt that has been run up in the United States since our Government started, since George Washington--he is over here--through all the Presidents, including George W. Bush, the amount of debt they have put on the books of the American Government, the amount of debt they put on our backs as American taxpayers is $5.8 trillion. In the 10-year budget President Obama is suggesting, he is going to double that number. Essentially, President Obama's proposal puts more debt on the books--actually, in the first 5 years of his administration--than has been put on the books since the beginning of our Government through George W. Bush. That is how quickly and massively the debt of the United States expands under this budget. At the same time, the tax burden increases significantly under this budget. There is $1.8 trillion of new taxes proposed in this budget. I understand it is the philosophy of the Government that now is the majority in this Congress and in the White House that Americans should pay more taxes. I understand that. I do not happen to agree with it. I think the American people are not undertaxed. I think basically we are a country that has some problems, but they primarily go to overspending. But even if you accept the fact that we have to raise taxes on the American people, which is what is proposed in this budget--there are two major tax initiatives. One would hit small business and one would hit every American. We call it the light switch tax or the national sales tax on energy. You would presume that they would take those revenues and, as good stewards, use them to try to reduce this deficit we are facing which is driving this debt up. But, no, that is not what happens here. They take all these revenues and they use them to expand the size of Government, so Government grows dramatically. Of course, they have now used up the resources which you might be able to use to try to bring this debt down for the purposes of increasing the size of the Government. They are increasing the size of Government so fast that even though they have the largest tax increase in history built into this budget, their spending increases so much quicker than that, the debt skyrockets. President Clinton when he came into office raised taxes significantly, too, because that was also his philosophy, but he took those tax dollars and used them--in conjunction, at that time, with a Republican Congress--to reduce the deficit and reduce the debt of the United States. That was proper. If you are going to raise taxes, that is what they should be used for. You should not use them to explode the size of the Government. Where is this Government explosion occurring? Primarily, the President has proposed to take the spending of the Federal Government, which has historically been about 20 percent of the gross national product, up to 23 percent of the gross national product. That spending increase is not for the short run. In the short run, he takes it up to 28 percent. That spending increase begins in the second and third year of his budget and it goes on forever--23 percent, actually creeping up every year, spending by the Federal Government. Over the last 40 years, the Federal Government has only spent about 20 percent of gross national product. That difference between 20 percent and 23 percent on our economy is a massive increase in spending. The amount of deficits run up because of that spending over the next 10 years will be over $9 trillion. Just the interest on the Federal debt in the year 2018, as a result of this huge explosion of spending which is proposed in this budget, will be $816 billion. That is just the interest on the Federal debt. Put that in perspective. In that same year, we will be spending less-- around $700 billion--on national defense. So we will actually be spending more on financing the deficit and financing the debt than we will on national defense. In the same period, we will be spending probably somewhere around $100 billion on education, if you include Pell grants and student loans. So we will be spending maybe eight times what we spend on education on financing this debt. That is money that is being sent out of the United States. Hopefully, people will still be buying our debt. But it is money being sent out of the United States to people who own our debt. This is just out of control. Some people have been saying the Republicans are being terrible naysayers about this budget. Yes. Yes, we are, because one generation does not do this to another generation. It is not the tradition of our Nation that one generation goes out and borrows massive amounts of money which have to be repaid by the next generation at a rate which can't be afforded by the next generation and then turns the country over to that next generation and says: Here, we are going to give you a country which has less opportunity for you than we received from our parents because this country is going to have such a huge debt burden on it as a result of all this spending and all this borrowing, and the taxing, which doesn't go to basically reduce the deficit at all; it goes to expand the size of the Government. It is not fair, really, for us, our generation, to do that to the next generation. That is why we suggested--OK, we will accept the fact that in the short run, over the next 2 years, there is going to have to be a spike in Federal spending and in the debt. But after that occurs, let's get back to what is an orderly process. Let's get back to numbers which are acceptable and responsible. Let's bring the public debt down from 80 percent of GDP, which is where it is when we get out here in 2016, 2011, and that period--not too far away--down to 40 percent of GDP, where it has historically been, down here. Let's take the deficit down from 4 and 5 percent down to 2 percent, which is where it historically has been. Let's put in place responsible policies, not take the spending up to such levels that they simply cannot be afforded because of the amount of debt that goes on the backs of the American people that becomes grossly excessive and unaffordable. This is not an unreasonable request. We are not suggesting that the administration trim its sails this year. We are suggesting that in the outyears there be a responsible budgeting process around here that leads to a fiscally sound policy. Why do the Chinese not have confidence in our currency? Why are they talking about changing from our currency? Why are they asking whether they should continue to invest in our debt? Because they don't see any policies coming down the pike from this administration which discipline in any way or limit in any way the spending of the Federal Government. Just the opposite--it is an explosion of spending on the entitlement side by over $1.2 trillion and an explosion of spending on the discretionary side by almost $1 trillion. If we did something constructive around here such as set up the process--which I proposed along with Senator Conrad, and many people in this Chamber support--which would put in place a disciplining event on our entitlement spending, then these different nations would look at us--and our people could say: Listen, Congress is serious about getting this under control in the outyears. They are not going to pass this massive debt on to our kids. They are actually going to try to put in place some systems to try to address this. But nothing like this is happening. This budget has none of that in it. Instead, this budget simply expands the costs of the Government and the borrowing of the Government, and then it raises taxes and spends it instead of using it to reduce the size of the debt. It is a policy which is not sustainable. The term ``not sustainable'' is used around here occasionally. What does it mean? Basically it means that when this policy comes to its fruition, after this budget is passed--and it will pass. The simple fact is, it needs 51 votes and there are 58 Members on the other side. It is going to pass. After it passes and the policies underneath it come in place, the term ``not sustainable'' means we are going to pass on to our kids a government they cannot afford and which will reduce the quality of their life and which may put at risk the value of our dollar and the ability to sell debt, according to the people who are buying it right now, the Government of China. This is serious. This is very serious. We need to take another look. We need to reorient. We need to sit down and say: How can we do this better? How can we make this work better? How in the outyears--and it is not that hard in the outyears--so we start to close these numbers on the deficit and bring down this rate of growth in debt so that it flattens out? How can we do that? We are ready to do that on our side of the aisle in a bipartisan way, whether it is something like the Conrad-Gregg bill or something in the area of entitlement reform or whether it is a freeze on discretionary spending as we move into the outyears; whether it is, if you are going to raise taxes, using those taxes to reduce the debt rather than expand programs; living within our means in the area of health care. We are willing to look at all those ideas because if we do not, basically we are going to pass on to our kids a government that will fail them and a government that will obviously not give them the lifestyle that they deserve and that one generation should pass on to the next generation. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, the spiraling cost of health care represents a growing financial crisis for many Americans who either cannot afford quality health care coverage or are struggling to keep the insurance they currently have. When combined with the aging of our population, health care costs are driving the country's long-term fiscal challenges, challenges which we must address in a bipartisan way. Unfortunately, many proposals being offered to achieve universal health care coverage are pushing us toward a system based on expansive government control, which will eventually lead to rationing, a reduction in the quality of care, and increased health care spending. That is absolutely the wrong way to go. So, today I join Senator Wyden and Senator Bennett as a co-sponsor of the Healthy Americans Act, bi-partisan legislation to overhaul the nation's health care system, in an effort to make quality, affordable health insurance available to all Americans. I congratulate Senator Wyden on his leadership in advancing this cause and pulling together this strong bipartisan blueprint that goes a long way towards empowering consumers and the private market to extend health care coverage to all Americans.

Mr. GREGG. In addition to the private market approach to expanding coverage, the bill attempts to reduce the growth in health care spending by providing incentives for preventive health care, wellness programs, and disease management, as well as a stronger focus on health care cost containment measures. These measures include lowering administrative costs and focusing on chronic care management, health information technology and medical malpractice reform as tools to control costs. In addition to his commitment to enact comprehensive health care reform in a budget-neutral manner, I also would like to commend Senator Wyden on his willingness to work with me to make improvements on last years' proposal. In particular the removal of the Medicare part D price negotiation language, the enhanced language to ensure stronger state flexibility, and the elimination of the non-health related tax provisions are strong improvements to the bill.