Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I will make a point of order a quorum is not present.

Mr. GREGG. I make a point of order a quorum is not present, Mr. President.

Mr. GREGG. Mr. President, a quorum is not present. I make a point of order that a quorum is not present.

Mr. GREGG. Mr. President, I appreciate the courtesy of the Senator from Massachusetts, and I will take 2 minutes to respond to his comment, and then I would be happy to have the Senator renew his motion. That was all the time I wished to use to respond--the issue being I had not been aware the Senator was going to respond to my comment. But I did believe his comments deserved a response, and that is what I was seeking recognition to do at the time I was cut off. However, I do appreciate the Senator's courtesy. In response to the specifics of the Senator's representations that the Department's position is that these numbers, as contained in the bill, will accomplish operational control of the border, I find that to be entirely inconsistent and unsupportable, first, from the testimony of the Department's lower level individuals--who are in charge of these agencies--before the Appropriations subcommittee which I chaired at the time, specifically, the Director of the Border Patrol, Mr. Bonner, who made it very clear he needed 20,000 border agents; and, secondly, the fact they had let a contract which has in it significantly more numbers in the area of virtual fencing towers than are in this bill. If they did not need those, why did they have a contract which calls for them? So I think on its face the representation of that proposal may be that is what they can do in 18 months, but it is not what they need to do for operational control. The proposal I have is the numbers necessary to obtain operational control: 2,000 more border agents than called for in the bill, 2,700 more beds than called for in the bill, 35 more towers for virtual fencing than called for in the bill, and 100 miles more of vehicle fencing. It is not outrageous, not inconsistent, not inappropriate, and will actually strengthen this bill and make the American people believe we are doing something constructive in the area of border security. With that, I appreciate the courtesy of the Senator from Massachusetts in allowing us to reopen the debate and ask unanimous consent that further debate on this amendment be ended and that the Senator be allowed to make his motion, which he has a right to do anyway.

Mr. GREGG

Mr. GREGG. Madam President, I believe I am to be recognized for 15 minutes; is that correct?

Mr. GREGG. I thank the Chair. (The remarks of Mr. Gregg pertaining to the introduction of S. 15 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. GREGG. Madam President, I yield the floor.

Mr. GREGG

Mr. GREGG. Madam President, I rise today to talk specifically about how we get our fiscal house in order as a nation and especially as a government. Just last week, the Congress passed--or at least the Senate passed and the House passed--a proposal for a budget which, unfortunately, fails the American people dramatically in the area of controlling spending and in the area of good tax policy. It creates a cascade. It is a Democratic budget that creates a cascade of new spending, hundreds of billions of dollars of new spending which will grow the size of the Government dramatically and which is, therefore, undisciplined in its approach. It also proposes tax policy which will radically increase taxes on working Americans and have the effect of stifling what has been an extraordinary economic expansion, which in part has been a function of having a tax policy which understands that if you let people keep their money, they tend to be more productive with those dollars, they tend to go out and take risks, be entrepreneurs, create jobs, and as a result, the Federal Government gets more revenue because people creating these jobs pay taxes and we end up with more economic activity. We have had 72 months of growth, and we have created 7.4 million new jobs in this country, and that is a significant step in the right direction toward economic expansion. But all that is at risk because we, as a government, tend to spend more than we take in, and we do not have in place a discipline necessary as a government to effectively manage our own house. This was reflected in the budget that was just passed, regrettably. Therefore, as we also look to the future, we are confronting a cost to the Government which is going to radically increase the expenditures of the Federal Government to a point where our children and our children's children will not be able to afford them. In fact, just the cost of three programs alone--Medicare, Social Security, and Medicaid--by the year 2025, because of the retirement of the baby boom generation, will actually exceed the amount of money which the Federal Government has historically spent as a percentage of gross national product. So by about the year 2025, because of the retirement of the baby boom generation, three programs--Social Security, Medicare, and Medicaid--will absorb all the money that historically the Federal Government has spent, which means there will be no money left over for education, laying out roads, or environmental protection. We will be in a position where our children, in order to bear the burden of those three programs, will have to pay a tax rate which will make it impossible for them to afford their own Government and will make their lifestyle significantly constrained. The pressure on them will be dramatic because the burden of taxes will exceed their ability to pay them and still maintain a quality lifestyle. Their ability to send their children to college, to buy a house, to have a good lifestyle, to have the luxuries which our generation has had will be constrained by the fact that the size of the Federal Government is growing out of control as a function of the retirement of the baby boom generation. So these two events combined--the dramatic expansion in entitlement spending and the Democratic budget which was essentially grossly irresponsible in the area of spending on the discretionary side of the account and in the area of creating debt; it will add $2.5 trillion of new debt to the Federal Government over the 5 years of this budget-- these two events combined are going to put a lot of pressure on our economy and on the well-being of our Nation. A group of us believe very strongly that we need to put in place mechanisms in this Government which more effectively discipline the spending of the Government. So I am introducing today, along with 27 colleagues--and that is a fair number of cosponsors--the Stop Over- Spending Act, SOS. This bill has eight basic elements. I am not going to go through them all, but I wish to highlight the ones that are significant. Basically, what this bill does is it puts in place disciplines which allow this Congress, if it desires to do so--all of these disciplines can be waived by 60-vote points of order, basically--if Congress desires to do so, it can limit the growth of the Federal Government to something that is affordable to the American people. The most important discipline this bill puts in place is one over entitlement spending. Right now, we have nothing that controls entitlement spending. This bill says that if entitlement spending reaches a certain level of use of general funds of the Treasury--and most of these entitlement programs--Social Security, Medicare, and Medicaid--are not supposed to be overwhelming burdens on the general fund, the general fund being basic income taxes, not retirement taxes and health insurance taxes--if the burden of these programs exceeds a certain level, then there are mechanisms which allow us to take a second look at these programs to improve them, to make them cost- effective while delivering quality services. In addition, this proposal puts in place caps, serious caps on discretionary spending so that we know that when you hit a certain level of spending and you are trying to exceed the amount of money the Federal Government should spend, there will be a 60-vote point of order before that can occur. That is only reasonable, that is only good budgeting, and it is something we need to have in place. Unfortunately, the Democratic budget which was just passed essentially got rid of caps for the year 2009, 2010, and it puts them in place for 2008, but that is almost irrelevant because it raises them so high that there is no way anybody is going to hit those caps unless they are truly spendthrifts. They basically add $200 billion of new spending over the next 5 years, and next year they dramatically increase spending, both through taking programs off the budget by declaring them emergencies, such as in the agricultural area, and putting them into the next year through advanced funding, which is a total gamesmanship, and then actually increasing the spending levels under the discretionary account. It is a grossly irresponsible cascade of new spending we see coming at us next year as a result of this Democratic budget. This Stop Over-Spending Act will try to discipline that in a more effective way, and it is time we did that. In addition, it puts in place two very aggressive proposals to try to take a look at how we are managing the bigger programs of the Federal Government. One is a proposal which came from Senator Brownback which is a bipartisan commission on accountability and Federal review. It is basically a BRAC commission for all the Federal Government. So if we find programs that are overlapping--and believe me, there are an awful lot of overlapping programs in the Federal Government--if we find programs that are just not producing the results they are supposed to produce or which have served their time, which were supposed to be 3- year programs and they have been going on for 10, 15 years, we will have a mechanism where those programs can come back to the Congress and voted up or down, either they should be in place or not in place, the same way we approach managing the defense spending accounts through BRAC. There is a second commission put in place which, again, has an automatic vote by the Congress, which is an attempt to address the most significant issue we have, which is this entitlement spending issue which was reflected in the chart I held up earlier. This is a commission which would be set up, which would be bipartisan, which would be Members of the Congress, and which would essentially take a look at these programs--Social Security and Medicare specifically--and see how we can improve them, see how we can make them work more effectively but see how we can make them more affordable for our children, and then in a bipartisan way, with an overwhelming supermajority, so there is no question that anybody will be gamed, everybody will be at the table, and nobody will be gamed, bring those proposals back to Congress and vote them up or down without amendment so that we know this commission, when it makes a report, will actually get action from a report. The problem is that we get all these commissions and they produce wonderful reports and nothing happens. This commission will have something happening. It is a critical element. It is important. If we don't get on this issue of mandatory spending, we will be irresponsible as a generation. We are the generation that created this problem, the baby boom generation. We are the generation governing today. Probably 80 percent of the people in this body are of the baby boom generation. And what we are doing is burying our heads in the sand and passing what we know is a huge problem--which is going to occur because all the people who are going to create this problem exist and they are going to retire--we are going to pass that problem on to our children and say: You figure it out, even though it is a problem we created. That is irresponsible. As people who have obtained a position of governing in this country, we have an absolute responsibility to our children and our children's children and to this Nation's fiscal health to address this issue, and this commission is an attempt to do that. This Stop Over-Spending Act is an attempt to do just that. In addition, the proposal includes biannual budgeting, which is something many people around here think will help us be more efficient in the way we approach the accounts of the Federal Government. It changes and reforms a lot of what are institutional mechanisms for the purposes of managing the day-to-day business of the spending of the Federal Government by putting in place baselines which are appropriate and limitations on the ability to spend money around here under reconciliation and limitations on the ability to raise taxes arbitrarily on the American people. So it is a balanced approach. It has 27 cosponsors, and, quite honestly, if a percentage of these proposals were adopted, we would actually have some discipline around this place in the area of fiscal policy. We would be back on a path toward making sure we have a government that people can afford, while we still have a government that is delivering the services that people want. That should be our bottom-line goal. It is an honor for me to have a chance to introduce this today, to be the primary sponsor of it, but I especially appreciate the support of my colleagues in signing onto this bill, which I hope will be considered or at least elements of this bill will be considered because we are running out of time.

Mr. GREGG

Mr. GREGG. Madam President, I rise today to talk specifically about how we get our fiscal house in order as a nation and especially as a government. Just last week, the Congress passed--or at least the Senate passed and the House passed--a proposal for a budget which, unfortunately, fails the American people dramatically in the area of controlling spending and in the area of good tax policy. It creates a cascade. It is a Democratic budget that creates a cascade of new spending, hundreds of billions of dollars of new spending which will grow the size of the Government dramatically and which is, therefore, undisciplined in its approach. It also proposes tax policy which will radically increase taxes on working Americans and have the effect of stifling what has been an extraordinary economic expansion, which in part has been a function of having a tax policy which understands that if you let people keep their money, they tend to be more productive with those dollars, they tend to go out and take risks, be entrepreneurs, create jobs, and as a result, the Federal Government gets more revenue because people creating these jobs pay taxes and we end up with more economic activity. We have had 72 months of growth, and we have created 7.4 million new jobs in this country, and that is a significant step in the right direction toward economic expansion. But all that is at risk because we, as a government, tend to spend more than we take in, and we do not have in place a discipline necessary as a government to effectively manage our own house. This was reflected in the budget that was just passed, regrettably. Therefore, as we also look to the future, we are confronting a cost to the Government which is going to radically increase the expenditures of the Federal Government to a point where our children and our children's children will not be able to afford them. In fact, just the cost of three programs alone--Medicare, Social Security, and Medicaid--by the year 2025, because of the retirement of the baby boom generation, will actually exceed the amount of money which the Federal Government has historically spent as a percentage of gross national product. So by about the year 2025, because of the retirement of the baby boom generation, three programs--Social Security, Medicare, and Medicaid--will absorb all the money that historically the Federal Government has spent, which means there will be no money left over for education, laying out roads, or environmental protection. We will be in a position where our children, in order to bear the burden of those three programs, will have to pay a tax rate which will make it impossible for them to afford their own Government and will make their lifestyle significantly constrained. The pressure on them will be dramatic because the burden of taxes will exceed their ability to pay them and still maintain a quality lifestyle. Their ability to send their children to college, to buy a house, to have a good lifestyle, to have the luxuries which our generation has had will be constrained by the fact that the size of the Federal Government is growing out of control as a function of the retirement of the baby boom generation. So these two events combined--the dramatic expansion in entitlement spending and the Democratic budget which was essentially grossly irresponsible in the area of spending on the discretionary side of the account and in the area of creating debt; it will add $2.5 trillion of new debt to the Federal Government over the 5 years of this budget-- these two events combined are going to put a lot of pressure on our economy and on the well-being of our Nation. A group of us believe very strongly that we need to put in place mechanisms in this Government which more effectively discipline the spending of the Government. So I am introducing today, along with 27 colleagues--and that is a fair number of cosponsors--the Stop Over- Spending Act, SOS. This bill has eight basic elements. I am not going to go through them all, but I wish to highlight the ones that are significant. Basically, what this bill does is it puts in place disciplines which allow this Congress, if it desires to do so--all of these disciplines can be waived by 60-vote points of order, basically--if Congress desires to do so, it can limit the growth of the Federal Government to something that is affordable to the American people. The most important discipline this bill puts in place is one over entitlement spending. Right now, we have nothing that controls entitlement spending. This bill says that if entitlement spending reaches a certain level of use of general funds of the Treasury--and most of these entitlement programs--Social Security, Medicare, and Medicaid--are not supposed to be overwhelming burdens on the general fund, the general fund being basic income taxes, not retirement taxes and health insurance taxes--if the burden of these programs exceeds a certain level, then there are mechanisms which allow us to take a second look at these programs to improve them, to make them cost- effective while delivering quality services. In addition, this proposal puts in place caps, serious caps on discretionary spending so that we know that when you hit a certain level of spending and you are trying to exceed the amount of money the Federal Government should spend, there will be a 60-vote point of order before that can occur. That is only reasonable, that is only good budgeting, and it is something we need to have in place. Unfortunately, the Democratic budget which was just passed essentially got rid of caps for the year 2009, 2010, and it puts them in place for 2008, but that is almost irrelevant because it raises them so high that there is no way anybody is going to hit those caps unless they are truly spendthrifts. They basically add $200 billion of new spending over the next 5 years, and next year they dramatically increase spending, both through taking programs off the budget by declaring them emergencies, such as in the agricultural area, and putting them into the next year through advanced funding, which is a total gamesmanship, and then actually increasing the spending levels under the discretionary account. It is a grossly irresponsible cascade of new spending we see coming at us next year as a result of this Democratic budget. This Stop Over-Spending Act will try to discipline that in a more effective way, and it is time we did that. In addition, it puts in place two very aggressive proposals to try to take a look at how we are managing the bigger programs of the Federal Government. One is a proposal which came from Senator Brownback which is a bipartisan commission on accountability and Federal review. It is basically a BRAC commission for all the Federal Government. So if we find programs that are overlapping--and believe me, there are an awful lot of overlapping programs in the Federal Government--if we find programs that are just not producing the results they are supposed to produce or which have served their time, which were supposed to be 3- year programs and they have been going on for 10, 15 years, we will have a mechanism where those programs can come back to the Congress and voted up or down, either they should be in place or not in place, the same way we approach managing the defense spending accounts through BRAC. There is a second commission put in place which, again, has an automatic vote by the Congress, which is an attempt to address the most significant issue we have, which is this entitlement spending issue which was reflected in the chart I held up earlier. This is a commission which would be set up, which would be bipartisan, which would be Members of the Congress, and which would essentially take a look at these programs--Social Security and Medicare specifically--and see how we can improve them, see how we can make them work more effectively but see how we can make them more affordable for our children, and then in a bipartisan way, with an overwhelming supermajority, so there is no question that anybody will be gamed, everybody will be at the table, and nobody will be gamed, bring those proposals back to Congress and vote them up or down without amendment so that we know this commission, when it makes a report, will actually get action from a report. The problem is that we get all these commissions and they produce wonderful reports and nothing happens. This commission will have something happening. It is a critical element. It is important. If we don't get on this issue of mandatory spending, we will be irresponsible as a generation. We are the generation that created this problem, the baby boom generation. We are the generation governing today. Probably 80 percent of the people in this body are of the baby boom generation. And what we are doing is burying our heads in the sand and passing what we know is a huge problem--which is going to occur because all the people who are going to create this problem exist and they are going to retire--we are going to pass that problem on to our children and say: You figure it out, even though it is a problem we created. That is irresponsible. As people who have obtained a position of governing in this country, we have an absolute responsibility to our children and our children's children and to this Nation's fiscal health to address this issue, and this commission is an attempt to do that. This Stop Over-Spending Act is an attempt to do just that. In addition, the proposal includes biannual budgeting, which is something many people around here think will help us be more efficient in the way we approach the accounts of the Federal Government. It changes and reforms a lot of what are institutional mechanisms for the purposes of managing the day-to-day business of the spending of the Federal Government by putting in place baselines which are appropriate and limitations on the ability to spend money around here under reconciliation and limitations on the ability to raise taxes arbitrarily on the American people. So it is a balanced approach. It has 27 cosponsors, and, quite honestly, if a percentage of these proposals were adopted, we would actually have some discipline around this place in the area of fiscal policy. We would be back on a path toward making sure we have a government that people can afford, while we still have a government that is delivering the services that people want. That should be our bottom-line goal. It is an honor for me to have a chance to introduce this today, to be the primary sponsor of it, but I especially appreciate the support of my colleagues in signing onto this bill, which I hope will be considered or at least elements of this bill will be considered because we are running out of time.

Mr. GREGG

Mr. GREGG. Mr. President, would the Senator yield for a question at this point in relationship to the Senator's question?

Mr. GREGG. Mr. President, the New York Times today was reviewing the financial statements of the candidates for President, and I noticed that the former Senator from North Carolina who is running for President, John Edwards, received half a million dollars in payments last year for his work with Fortress, a hedge fund. I also noticed that the New York Times represents that the Fortress hedge fund is incorporated in the Cayman Islands, probably in that building to which you are referring. I am just wondering, because the Senator asked who is being fooled here, is it the position of the Senator from North Dakota that Senator Edwards has been fooled here or that he is fooling the American people?

Mr. GREGG. Mr. President, if the Senator would yield for a further question.

Mr. GREGG. Mr. President, let me begin by returning that appreciation to the Senator. Obviously, there are strong disagreements on philosophy and policy, the differences between the parties. The Senator from North Dakota represents the party of tax-and-spend, and we represent the party of fiscal responsibility. Those differences are clear. Independent of those differences, the relationship is friendly, courteous, and generally cooperative. I believe that if the entire institution functioned the way the Budget Committee functions, we would get a lot more done around here. That being said, I must point out some differences. I am inclined to almost use the--to paraphrase a quip made by, I think, Mark Twain, but it might have been Bill Buckley, who said: I do not wish to insult the Senator's intelligence by suggesting that he actually believes most of what he just said. The fact is that this budget, as proposed, is not a good one. It has in it the largest tax increase in history. It is a tax increase that is especially unfortunate because it is going to take place in the context of a tax law that we finally got right around here, as shown by the revenues flowing into the Federal Government, and the fact that present tax law is generating more revenues than, historically, the Federal Government has received and is doing it in a more progressive way than has historically been done. High-income people are paying more than they have historically paid, and low-income people are getting more back in the way of tax benefits than they have historically gotten. This bill will basically repeal most of the major tax proposals put in place in the early part of this administration which generated this economic recovery which has gone on for 22 months and has caused us to have 7.4 million jobs created. In fact, the report just came out that the jobs number fell another 5,000, so that we are literally under 300,000 in jobs claims, which is a number that shows we are even essentially at full employment. As a nation, we are under 4.4 percent unemployment. The jobs being created are good jobs, and they are generating revenues to this Government, which has caused us to have a huge burst in revenues, which has caused the deficit to come down. That is all going to be put at risk by the tax increases in this bill. The tax increases in this bill are going to dramatically affect the capital gains rate, the dividends rate, the child tax credit, the education tax credit, the marriage tax penalty relief, and the middle- class income tax rates. All of those things are in serious jeopardy and, in fact, will probably end up being repealed under this budget if it goes forward under the present structure. We will get into that in a second. They have created this extremely complex trigger mechanism, which can be and will be undermined by their own budget, should it go forward, and will make it impossible for the tax cuts to survive in this process. Mr. President, $725 billion of tax increases are in this budget over 5 years. That will be the largest tax increase in the history of the country, no question about that. In addition, the discretionary spending in the budget is huge--$205 billion of new discretionary spending over the President's request, which was very generous, with a significant increase in spending. It is ironic that, as this left the Senate, there was less spending than this--still a significant increase of $140 billion, I think, in spending above the President's request in the discretionary spending. As it left the House, it was less than this. I don't even think it was $200 billion. It comes back at $205 billion. That is sort of like a microwave popcorn cooker, where you put it in the stove and put the House Democrats and the Senate Democrats in together, and it blows up into a great big huge spending package and a great big huge deficit--and tax package, too. The debt goes up under this bill: $2.5 trillion of debt will be added to the famous ``wall of debt.'' For those of you who haven't seen the wall of debt, you will see it sometime, somewhere. It is coming. So there is $2.5 trillion of new debt added. Remember, on top of that, they are raiding the Social Security fund to the tune of a trillion dollars. Originally, when the budget left the Senate, at least the Social Security fund--under their projections, which are rosy scenarios, to say the least--wasn't going to be raided. There was going to be an on-balance budget. But now, as it comes back again from this tax-and-spend microwave called the Senate Democrat/ House Democrat budget conference, which we were not included in, there is no on-budget surplus. Everything comes out of the Social Security fund. All this debt is added to our children's backs, and it is going to have to be paid for by our children. In addition, there is absolutely no attempt to address the entitlement crisis we are facing. The fact that our children and our children's children are going to have to pay a cost they simply will not be able to afford, in the area of maintaining the benefit structure, because of the retirement of the baby boom generation and the fact that costs will actually exceed 20 to 25 percent of gross national product, just for the programs of Social Security, Medicare, and Medicaid--and there is no attempt to rein that coming fiscal meltdown in or to address it--that is totally irresponsible. In fact, not only is there no attempt to address the coming fiscal meltdown as a result of the entitlement spending, there is actually a huge exercise in gamesmanship in this budget, which will allow the HELP Committee, under the leadership of Senator Kennedy, to dramatically expand entitlement spending. Instead of reining in entitlement spending, under this budget there is a proposal to use reconciliation, which is supposed to reduce the deficit on the spending side of the ledger, to expand spending and the size of the Federal Government, grow the Government. Why do they do that? Because they only need 51 votes under reconciliation. They could not get that proposal through here. It would be subject to a filibuster under the regular order. So they used reconciliation, which should limit the size of government, to expand government dramatically. That is a very cynical act, in my opinion, because that was never the purpose of the budget. In fact, there are some very good quotes from the chairman of the committee reflecting that exact position--the position I just related. That brings me back to that statement of Mark Twain--or it could have been Bill Buckley--who said, ``I will not insult the Senator's intelligence by suggesting that he actually believes everything he just said,'' because he didn't believe it, because what he said was the opposite, that reconciliation should not be used the way it is being used in this bill. The Senator from North Dakota made a couple other statements. I think they were on point when made, but the budget does not reflect these statements. He said we need to be tough on spending. Yet, in this budget, there are zero cuts in spending. In fact, this $205 billion expansion in discretionary spending, entitlement spending, will expand under the reconciliation instruction also, and under the reserve funds, the Government will grow dramatically as a percentage of gross national product. We will bear that burden. The Senator said: I am prepared to get savings out of long-term entitlement programs. But there are no savings. There was a representation that they were going to do $15 billion in savings, but that representation was a little incomplete because the rest of that should have said: But we are going to spend $50 billion. So there are actually no savings. I think it ended up being $30 billion, but it is a net loss in the entitlement accounts, coupled with this reconciliation exercise, which could be as high as a $30 billion to $40 billion increase. He also said: Here is where we are headed: Debt is up, up, and away. Yes, it is, under this budget. That was a correct statement. It is up, up, and away by $2.5 trillion of new debt, which our generation passes on to the next generation, which is totally inappropriate and unfair. He said: I believe, first of all, we need more revenue. He at least stuck to that statement. There is $736 billion of new taxes in this bill. What is the practical effect of a $736 billion tax increase? Remember, as I outlined before, we have now had 22 consecutive quarters of economic growth--actually, 23 now. That is pretty darn good. We have added 7.8 million new jobs. That is people being put to work. How did that happen? It happened, in large part, because we had an economy that was growing as a result of a tax policy that said to people in America: Go out, invest, take risks, be entrepreneurs, create jobs, and we are going to give you a reasonable return on the money you have invested. This is just called common sense in human nature. If you tax people at a rate that they appreciate and is fair, they are going to be willing to take a risk with their money, go out and invest it and create jobs. If you tax them at a rate they don't think is fair, they invest in tax shelters and inefficiently use their money, and as a result, the Government gets less and the economy doesn't grow as much. In fact, the growth in Federal revenues over the last few years has exceeded projections and has been dramatically higher. The growth in Federal revenues has been in the last 3 years the highest rate of growth in the history of our country and has represented huge amounts of revenue coming into the Federal Government--huge amounts of revenue. This revenue, of course, has allowed us to reduce the deficit from what was projected to be $450 billion a couple of years ago, to now probably falling below $200 billion or probably less than 1 percent of the gross national product, or somewhere in that range. It is, in large part, a function of two events: One, the fact these revenues have jumped so high and, two, this administration has been very aggressive in controlling nondefense discretionary spending. But under this proposal that has been brought forward today by our colleagues on the other side of the aisle, the tax policies which have generated this economic expansion are targeted for extinction. The capital gains rate will jump back to almost 30 percent, 35 percent potentially; dividend rates will jump to 25, 32, 35 percent. The bottom rate for most taxpayers who are in the low-income end of the economic scale will be increased, and there will be created a huge disincentive for people to be productive in our society. We will go back to the days when it didn't make a whole lot of sense to go out there and take that risk because the Government was going to take so much of your money. We hear a lot on the other side of the aisle: These tax cuts disproportionately benefit the wealthy in America. I think it is important to remember this: That under the new tax law, or the tax law under which we are now functioning, which is generating all these huge revenues, high-income people pay a larger percentage of the general burden of income taxes than they did under the Clinton years. The top 20 percent of people paying income taxes is paying 85 percent. Eighty- five percent of the income tax burden is borne by the top 20 percent. Under the Clinton years, that same income bracket bore 81 percent of the tax burden, and the lower end of our economy, people who don't make quite so much money or don't make a great deal of money, the bottom 40 percent does not pay any income taxes actually on balance. They actually get money back under the earned-income tax credit, and today they are getting twice as much back as they did under the Clinton years. It is interesting to note, in fact, that in that group, the low- income household receives far more in Government benefits than they ever pay in taxes. That is an interesting fact which should be pointed out, as well as the fact that on the tax side of the ledger, they get more money back; whereas, the higher income individual, of course, pays a lot more into the Federal Government than they ever get back from the Federal Government, and that is what this chart shows. If your income is up to $23,000, you are going to get about $31,000. If your income is over $65,000, you are going to pay about $50,000. It is a very interesting fact that when you take not only the tax burden to Americans but the benefits which Americans receive, low-income Americans are, under this Government, under the Bush administration, getting a huge benefit from the Government in the area of tax benefits and also benefits which are structured on the basis of income, and high-income Americans are paying a significant amount more for the cost of the Government. So we have a tax structure which is extremely progressive and which is much more progressive than under the Clinton years. In addition, this budget, which has such antipathy toward productive Americans, which essentially says to productive Americans, we don't like you, we want to tax you some more, in trying to get at those folks who the other side of the aisle thinks are such scofflaws because they make money and have income and actually pay 85 percent of the burden of income taxes in this country, in trying to get at those folks by raising the dividend tax and raising the capital gains tax, which is the primary target of the other side of the aisle, they are actually significantly impacting low-income seniors, or seniors generally, and this should be common sense because most seniors receive income, other than Social Security, that is dividend based because they are not working any longer. So when the other side of the aisle decides they want to get people who have dividend income, which is exactly what this budget proposes-- they are going to get those folks because they are the enemy--whom they are getting, for the most part, are senior citizens. Fifty-one percent of American seniors have dividend income. So when they decide to double or triple the dividend tax or 2\1/2\ times increase it, which is what this bill will do, the people who are going to be impacted are 50 percent of the seniors. In the area of capital gains, it is also interesting that the same is true: When they decide to get people who make money by selling assets, all those wealthy small businessmen, you know, the guy who all his life worked to build a restaurant, a small company or maybe a gas station, spent his whole life working to get that business up to a level where it had some asset value, and then when he or she retires, they are not going to run it any longer, they are going to sell it, take those revenues and they are going to use it to live on in their retirement years or maybe to help their children out, that evil person who has done that in our society, as the other side of the aisle views that person, they are going to get them by doubling the capital gains rate. Whom do they get? They get people who are 65 to 74 years old. Thirty percent of those people have capital gains income. People, as they start to age into the retirement years, start to generate capital gains income, and it is logical, when you get to that age, you are going to want to sell those assets which you probably built with the hard sweat of yourself and your family--a farm or a restaurant or a small company--so that you can take those assets and live on them in retirement and live a good retirement life or simply help out your children as they move forward in their life. So when they get those people, whom are they getting? They are getting retirement people with this proposal. They are raising their taxes. We are going to hear some of this ``Wizard of Oz'' language about, well, we really don't raise those taxes, we really don't. There is $180 billion of adjustment that we are going to be able to put toward capital gains or something else. It is a fraudulent statement that it is almost not worth responding to. But let me move to the factual response, which is this: There is no capacity in this budget to institute any significant attempt to continue or to make permanent dividends and capital gains rates. None. In fact, that $180 billion, were it even to appear, which it will not under this budget--a point I will get to in a second--would benefit miscellaneous deductions which are good and right and appropriate but actually don't help the economy all that much because mostly they are socially driven. They involve the marriage tax penalty. They involve children's tax credits, tuition tax credits. They are not like economic drivers, such as dividend rates and capital gains rates which translate immediately into better investment of funds. What they have said is: We will give you that $180 billion if certain events occur in the third and fourth year of this budget. This is a real Rube Goldberg exercise. It is one of those things where you have 16 different moving parts, and you know none of them are going to work, but you claim they are going to work so you can claim you are actually going to do something you know is never going to occur. That is exactly what this is all about. For this $180 billion to kick in, the Democratic tax trigger requires the following: A budget resolution--we have the Rube Goldberg chart hot off the press. That is one of our better charts. It took a little bit of thought on this one. In order to get this tax cut or any part of it, the following has to happen: There has to be a budget resolution promising middle-class tax cuts. That is here. We have that. We are going to give you the promise; we are just not going to give them to you. The tax-writing committee marks up the legislation, but it stalls. Why does it stall? Because the way this thing works is there have to be offsets that can be found to satisfy the tax cuts, but if the Congress continues to spend money, that undermines the capacity to reach the factual obligation which would create the tax cuts. So you can basically spend your way out of doing the tax cuts, which is exactly what the budget proposes. It says it promises the tax cuts and then it proposes $205 billion of new spending in the discretionary accounts and proposes a huge expansion of spending in the entitlement accounts. So it essentially guarantees that the trigger, which allegedly is in place, can't occur to generate the tax cuts because the spending eats away at the outyear surpluses and, of course, that leads to the business community getting a little skittish. It leads to the investors getting a little skittish. It leads to the economy starting to contract, which leads to a slower rate of growth, which leads to less tax revenues, which leads to--surprise--they are not going to give you the tax cuts. It is a self-fulfilling prophecy. It is a trigger that is guaranteed that when it is pulled, nothing happens. It is similar to a Rube Goldberg event. There was some language which I loved--I have to see if I can find it--that describes this in the budget resolution. It is fascinating. It is so good it can't be not mentioned here. It defines how we get to this tax cut. I will find it or my crack staff will. They so want to destroy the ability to do this tax cut that even in the language of the budget itself they put in obfuscating language that is filled with obfuscation, that you know on the basis of it no one takes seriously the idea of doing the tax cuts. That is reasonable because let's face it, that is not the philosophy of the party of the other side of the aisle. The party of the other side of the aisle has shown itself historically to be a party to believe that it is not your money. It isn't your money. It is their money. You haven't figured out yet that you earned it, and you think you should be able to spend it. You haven't figured out yet that they think you earned it for them and that the Government should be able to spend it. That has been the philosophy of this party for a long time. It doesn't change over the years very much. Now that they are back in a position of some responsibility-- considerable responsibility; they are the party of both the Senate and the House--they have the capacity to execute that strategy which is: We will take your money and we will spend it on what we think is important because we are smarter than you, we know better what you need and, therefore, it shouldn't be your money in the first place because you earned it, the Government has a right to it, and the Government should make a decision as to how best to handle it. So it should not come as a surprise to anyone that this budget is replete with new spending and dramatic expansions in taxes. I did find--or my crack staff found it, as they always do--the language which I had seen in the conference report, which is so interesting it has to be read for the record. This is how this trigger works. It is written similar to a reserve trust fund, which is, on its face, a shell event. Almost all these trust funds are shell events. By the way, these trust funds are structured so that we start out with 5 or 6, now we have 23 of them. I am sorry, reserve, not a trust fund. A reserve fund, not a trust fund. I used the wrong term. A very inappropriate term. A reverse reserve fund. This is the way it works. In the House, the chairman of the House Budget Committee will increase the revenue aggregate--in other words, will take away tax cut revenue--if he determines the future tax relief legislation--and this is the language I love--does not contain a provision consistent with the provisions set forth in the joint statement of the managers. What does the joint statement of the managers say? The statement of the managers says that the future tax relief legislation must contain a provision that makes the tax relief contingent on OMB's projection of a surplus. The second trigger would turn off the tax cuts unless a minimum surplus materialized, and the tax cuts can be $179.8 billion or 80 percent of the projected surplus, whichever is less. Rube Goldberg couldn't have written this language any better. I mean, this language is designed to fail. It is designed to make sure the Government gets that money; that you don't get to keep it, and the Government makes the decision as to where it is spent. It is unfortunate. We also have in this budget, regrettably, a total failure to address the entitlement accounts. Entitlement accounts are by far the most serious issue we have as a government and as a people, beyond the threat of being attacked by Islamic extremists with weapons of mass destruction. Why do I say that? That sounds like a statement that is a little over the top. Well, it is not. The simple fact is that as the baby boom generation retires, and it is going to retire--we exist; there are 80 million of us--we are going to double the size of the number of retirees in this country. As I have said before on this floor, and I know the Senator from North Dakota agrees with me, this system is not structured to handle the retirement of a generation that is that large. The whole concept of our system of retirement benefits was that there would be a pyramid. There would always be many more people who paid into it than took out of it. That was the genius of Franklin Roosevelt when he created the Social Security System. In fact, when it started, there were 12 people paying in for every person taking out in 1950. Today, there are three and a half people paying in for every one taking out. By the time the baby boom generation is in full retirement, we will have two people paying in for every one person taking out. The practical effect of that will be a meltdown of our system, and this chart reflects that. I have shown this before because I think this is probably the most serious issue which we face, beyond the issue of the threat of Islamic fundamentalism and the terrorist threat they represent. Three accounts--Social Security, Medicare, and Medicaid--by the middle of the period 2020, when the full force of the baby boom retirement is in place, those three programs will absorb 20 percent of gross national product. Twenty percent of gross national product is what the Federal Government spends today. Another way to state this is that at that time the Federal Government will have no money left over for national defense, education, laying out roads or environmental protection. All the money will have to go to pay for those three programs. But it doesn't stop there. The number continues to go up at a rate which is incredible, and which is totally unsustainable, until it hits about 27, 28 percent of gross national product for those three programs by about 2035. Now, this is a situation which will mean--and it is going to occur--which will mean, because it is going to occur, that our children and our children's children--these pages down here, who do such a great job and who are so personable and put up with our foolishness around here sometimes--they are going to have to pay a burden in taxes in order to support our generation. That will make it virtually impossible for them to have as high a quality of life as we have had in our generation. They would not be able to buy that home or put their children through college or have the enjoyment of a lifestyle that contains discretionary funds because those funds will have to be spent, through taxes, to support these programs. These three programs. Regrettably, this budget does nothing--zero--to address this looming crisis. It is an act that I think fails our obligations as a generation. We are the governance party now. In the sense that most of us in this room who serve here today are baby boom members--there are some who aren't--it is inappropriate for us as a generation not to try to solve a problem which we are going to create for our children and our grandchildren. Yet this budget does nothing to do that. In fact, it aggravates it by suddenly creating this new concept that you can use reconciliation to expand and grow the size of Government dramatically, which is exactly what it does, which is unfortunate, and which is a terrible precedent for us as a government to pursue. There was a proposal that came from the administration which I thought was reasonable and which would have reduced the outyear Medicare liability--the unfunded liability--by almost 25 percent. It would not have affected recipients except for those at the high end because all it did was that it impacted recipients, as was suggested, such as Warren Buffett or retired Senators, for example, who could and should pay a fair share of the burden of their cost of Medicare Part D. Under Medicare Part D today, which is the drug program, if you are retired, it doesn't matter how wealthy you are, you still get the benefit fully subsidized by working Americans. So that a person who is working as a waitress or on an industrial line somewhere, or in a gas station, that person's taxes are subsidizing Warren Buffett's drug benefit, assuming he takes advantage of Part D, which being a conservative individual, I think he probably does, although I don't know whether he does. A retired Senator's drug benefit is subsidized by a working American today. Well, that is wrong. I mean, obviously, if you have that type of income--and what the President suggested was that people who have over $80,000 of individual income or $160,000 of joint income, which is a lot of money--you should have to pay the full cost of your drug benefit, or at least a high percentage of the cost of your drug benefit. That was rejected. It was rejected by the other side of the aisle. What a small step. That would have translated into a very significant savings in the long run, which was totally reasonable, but which was simply not pursued or brought to the table by the other side of the aisle. I mean, if they are going to do reconciliation instructions, which expands programs in this country dramatically, which is what this bill does, they ought to at least, on reconciliation, say to the Finance Committee, make former Senators pay the full cost of the drug benefit and people with incomes of over $160,000, or a large percentage of the cost of the drug benefit. But they didn't. They passed completely on that opportunity, even though it was a totally reasonable opportunity and something that should be done. It should be done soon because the problem is--and it reminds me of that Fram oil filter ad of 10 years ago or so, which said: You can pay me now or you can pay me later. Well, the ``later'' is going to bankrupt our children and our children's children. Paying today, fixing this problem today, translates into long-term huge savings, and it is certainly something that should be done. But it was passed on in this budget. So what is the practical effect of this budget? It is pretty simple. It is a big-spending, big-taxing, classic budget that comes from the left. It increases taxes by $730 billion, it increases discretionary spending by $205 billion, it raises the Social Security fund to the tune of a $1 trillion, it increases the debt of the Federal Government by $2.5 trillion, it dramatically expands the obligation which we are passing on to our children and which our children will have to pay, it eliminates some tax cuts which have caused this economy to grow and be vibrant and which have created jobs and generated huge revenues to the Federal Government, and it fails to even a little bit--by asking former Senators and wealthy Americans to pay the cost of their drug benefit-- to address the looming crisis which we face as a nation, which is the Medicare, Social Security burden which we are going to pass on to our children. It is not a budget which I would recommend, though I do appreciate the Senator from North Dakota and his energy in pursuing it. There is one other small point, in the area of fiscal discipline, where we hear all this talk of pay-go. They shouldn't call this pay-go. They should call this ``Swiss cheese go'' because it is targeted to pick up the things they do not like, such as tax cuts. But the things they like, they basically exempt from it, such as agricultural entitlement spending. So it is a choose-the-things-you-like pay-go, or choose-the-things-you-don't-like pay-go. That enforcement mechanism is a nice term--it is a term of motherhood--but it is not going to have much discipline on the spending side of the ledger. In addition, there are no caps in the outyears. For some reason, even at these very high spending numbers, which are egregious in their excess, they have put no caps in for 2009 or 2010. They have them in there for 2008 but not beyond that. They have expanded advanced appropriations, which is a way to basically get around caps to begin with, over what they have traditionally been. I understand the President has sent up a letter, or his OMB Director has, and it says they are going to try to discipline the fiscal process through using the veto on appropriations bills. But we know the President can also be put in an untenable position because they can roll all these appropriations into the Defense bill and make it virtually impossible for the President to aggressively and effectively use the veto. It shouldn't be up to the President to discipline this place. We should do it. There also should be effective points of order retained and carried out. In fact, the pay-go point of order is so neutralized they decided they wouldn't do it year by year. They decided to do a 5-year calculation of pay-go. This is all inside politics around here, or inside substance, but the practical effect of that is you can take credit for something you think is going to take effect in the outyears, when you know that 5-year scoring is sometimes a little sketchy. So you do spending this year with the claim that you are going to save in 5 years, and you can claim you have avoided pay-go. It is a way to game pay-go on the spending side of the ledger. They basically have eviscerated a whole series of what are important spending restraints around here, or at least they have skewed them in a way that makes spending more capable of occurring and, of course, tax cuts will be aggressively disciplined so they can't occur. Because, after all, it is not your money. It is their money. You have to always remember that. This budget is based on the basic theme that it is not your money, it is the Government's money, and we deign, we deign as a Congress, to allow you to keep some percentage of what you earn. But most of what you earn we want, and we are going to spend it. This budget does it very well. Mr. President, I yield the floor.

Mr. GREGG. Mr. President, will the Senator yield for a question?

Mr. GREGG. Is the colloquy that just occurred part of the increased spending that doesn't occur in this budget?

Mr. GREGG. Mr. President, was the Senator from North Dakota yielding time to the Senator from Texas?

Mr. GREGG. I just got that impression, so I was willing to remain silent as the Senator from North Dakota yielded the Senator from Texas time.

Mr. GREGG. I yield 10 minutes to the Senator from Texas.

Mr. GREGG. At the completion of the Senator's time, I suggest Senator Vitter be recognized for 5 minutes.

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

Mr. GREGG. Madam President, I recommend the Senator take 32 minutes.

Mr. GREGG. How much time will Senator Dorgan take?

Mr. GREGG. Why don't we go to Senator Grassley for 15 minutes, then Senator Dorgan for 15 minutes? But before we do that, I wish to respond quickly--no more than 2 minutes--to some of the comments made by the Senator from North Dakota. The first point is this: It truly is a budget from the land of Oz when you make representations that you are not increasing spending when, by your own terms, you are increasing discretionary spending $205 billion over the President's number. It is equally a budget from the land of Oz when you say you are not raising taxes when, in fact, you are raising taxes not $726 billion but $916 billion because you have put in place a phony trigger mechanism to allege that $180 billion of tax increases will not go into effect when it is absolutely clear that they will. It is equally disingenuous and from the land of Oz to claim that you are not increasing the debt of the Federal Government when the debt of the Federal Government is going to go up $2.5 trillion and almost all the surplus that you allege to have reached is going to be borrowed from the Social Security fund, debt borrowed from the Social Security fund, and all of the deficit over this period is going to be debt borrowed from the Social Security fund. So it is an attack on the Social Security fund, it is an attack on the taxpayers of America with the largest increase in history, and it is a dramatic expansion of spending of this Government and growth in the great size of this Government. I would note that the Senator's charts conveniently ignore the fact that we had an Internet bubble which melted and caused a significant recession which was increased dramatically by the attacks on 9/11, and that is why your GDP numbers are skewed during that period, because the gross national product did not grow in the face of a recession and what happened as a result of 9/11; and that your outyear numbers are equally skewed because you basically presume we are not at war, which hopefully we won't be, and hopefully we can all take credit for that, but the fact is you don't even account for the cost of the war should the war extend beyond 2009, and so that creates different projections on costs. Mr. President, I yield 15 minutes to the Senator from Iowa.

Mr. GREGG. Mr. President, that was not the Wizard of Oz, that was the lion--that was the scarecrow, and clearly, if Dorothy looked at this budget, she would find the Wizard of Oz still behind the curtain.

Mr. GREGG. Will the Senator yield for a question?