Judd Gregg

Mr. GREGG

Mr. GREGG. Yes, I will do that.

Mr. GREGG. Mr. President, I rise to offer an amendment to this bill, along with Senator DeMint and a number of colleagues--about 25 of them.

Mr. GREGG. This amendment we are offering is what we call the second look at waste amendment. It is a child of the original line-item veto, although it is not a line-item veto. As the Congress will remember, we passed the line-item veto in the early 1990s and gave President Clinton that authority. He actually used that authority. It was challenged in court and was found to be unconstitutional. But that line-item veto was passed rather strongly by this Congress and by the Senate, and it was a bipartisan effort, which I hope this will be, to try to allow the executive branch more opportunity to address omnibus bills around here. This proposal that we put forward is not like the line-item veto because it doesn't have the same constitutional impact. It is truly a second look at waste amendment, where we basically say to the executive branch that if you get one of these omnibus bills filled with different initiatives--and these bills can be hundreds of pages long and can involve hundreds of billions of dollars of spending and massive amounts of authorization, and it is not unlikely that there is going to be a fair amount of activity put in there because somebody knows it is an omnibus bill and they know it is going to have to pass and go forward, and even though the language put in may be questionable as to purpose, policy or as to just plain waste, it gets stuck in this--baggage thrown in the train as they say--that baggage can never be looked at. The President has no capacity to take another look at this. Congress ends up with the vote--and we get one vote, usually, on these types of bills; sometimes in the Senate we get more shots at it. They are not scrutinized at an intensity level that they should be. So this second look at waste language essentially says that the President can, on four different occasions during the year, send up what amounts to an enhanced rescission package, where if he has gotten bills that have had in them things the executive branch deems to be inappropriate, most likely wasteful spending or spending that is unnecessary or maybe counterproductive even, he can ask the Congress-- or she, maybe in the next round--to take another look at that spending, and there is a fast-track procedure where that goes to a vote. The savings, should they occur as a result of rescission--and it is presumed that all rescissions will involve savings--will go to deficit reduction. The language itself is essentially modeled after language that was offered as a Democratic substitute by the Democratic leadership back when we were debating the original line-item bill President Clinton ended up having the authority to use. So we have tried to structure it in a bipartisan way, using bipartisan language and verses--for example, the language originally sent up by the White House as to how they would have liked to have handled this, which we felt overreached the authority of the executive significantly, and we have basically set that language aside and moved forward with this language, which is more restrictive on executive rights. It truly retains the right of the legislative branch to control the spending issues. But it does ask us, as the legislative branch, to take another look at things that may be of questionable interest. Of course, if both Houses don't approve the request from the President, the spending stays in place. So it is one of these light-of-day amendments that tracks very closely what is being proposed in both Houses in the area of earmarks. It is an attempt to address what is a common event, which is a cluster or a significant earmark not necessarily individually directed but maybe more expansive, that is put in a bill that the executive simply can't not sign and the Congress can't not pass. So it is an attempt to basically bring some transparency, light of day, on some of what occurs around here and is referred to as occurring in the middle of the night. It is an initiative which has very strong support by a large number of groups. A few would be the Chamber of Commerce, the Center for Individual Freedom, the Concord Coalition, Americans for Tax Reform-- groups that are interested--the National Taxpayers Union--groups that are interested in having more discipline over the fiscal process of this Government. All this is is another disciplining mechanism. It actually gives the executive branch the opportunity to come forward and say, listen, do you want to do this? Did you want to spend this money in this way? If the Congress concludes that, yes, it did, the matter is over. In fact, it takes an affirmative action of the Congress to confirm the decision of the executive or the request of the executive to pursue this course of action of not spending this money. The original Presidential proposal would have allowed them to send up numerous rescission requests, which could have tied the Congress up technically and practically for months. This avoids that. It is very limited. They can only send up four, and one has to come up with a budget. The original request from the executive branch would have said that they could withhold spending on something that they decided to send a rescission up on for up to 180 days, with the practical effect being they could have withheld spending almost forever. This bill dramatically shortens that to 45 days or until Congress acts. It is similar to a BRAC approach, in other words. It says you tell us what you think should be rescinded. We will act within a short timeframe. If we disagree or decide not to act in a way that is consistent with your request, then the matter is over and the money gets spent. If we agree, the rescission occurs and both Houses must concur in the rescission. So this is an exercise in good Government, in transparency, and it is an exercise in trying to give the American people the information they need on bills that are very complex and sometimes have a lot of questionable activity buried in them, to give them another chance to have those decisions reviewed. It is an exercise in fiscal discipline because the money saved goes to deficit reduction. As I said, it has very strong support. I hope that my colleagues will join us in supporting this. I see that the Senator from South Carolina has joined us on the floor. He has been a strong spokesperson for this initiative. I send my amendment to the desk.

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

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

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that Seema Mittal, assistant to the Senate Budget Committee, be allowed the privilege of the floor during the consideration of S. 1 and votes that may occur in relation thereto.

Mr. GREGG

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

Mr. GREGG. Mr. President, I wish to speak briefly, not specifically on this bill, although it is related to this bill. I will have an amendment to this bill. Hopefully, I can offer that tomorrow. But since there is a lull in activities, I want to speak briefly on something the House has recently done as part of its 100-hour agenda. It has passed language which is euphemistically referred to as pay-go. I think it is important to understand what the implications of that language are because it gives definition to the House leadership rather quickly in this whole process of where we are going in the area of fiscal responsibility as a country because what this language essentially does is guarantee tax increases, but it has virtually no impact on spending restraint. It has been given this motherhood title ``pay-go'' when, in fact, it should be called and more accurately is described as ``tax-go.'' The implications of this language are pretty simple. It says that when a tax cut lapses or comes to the end of its term, that tax cut will be raised back to the original rate. So, for example, we today have a tax rate of 10 percent for low-income individuals. That tax cut was put in place back in the early 2000 period under the President's tax cuts. That tax cut comes to a close from a statutory standpoint--in the sense that the authorization level of the rate terminates in 2010-- and that rate will jump back up to the basic rate, which I believe was 15 percent at the time. So there will be a 5-percent tax increase on low-income Americans who pay taxes. That would be people with over $40,000 of income, for all intents and purposes. That is a tax increase. One would think that type of mechanism would also be applied, if one is going to use a euphemism such as pay-go, to the spending side of the aisle, so when the spending program used up its authorized life--let's take, for example, the farm program--and it reaches the end of its term, as the farm program is about to do, at that point, that program, which is a subsidized program, would have the cost of the original program go back in place or it would be cut back to having no subsidy at all. But that is not the way it works. Under the proposal, entitlement programs are perceived to go on forever and to spend money forever at whatever the rate is, even if their authorization ends. But tax reductions are perceived to end and tax rates are perceived to go up. You basically treat the two sides of the ledger entirely differently. On one side of the ledger, taxes go up under this ``tax-go'' proposal if there is no change, and on the other side of the ledger, if there is no change, the entitlement spending goes on for that designated program forever without it falling back and being limited. There is no review of it. The practical implication of this language is that the only thing it affects, when you put in place this so-called pay-go, which is really ``tax-go,'' is the tax side of the ledger. That is the only thing that can be impacted because the entitlement program under the scoring mechanisms of our Government don't lapse, don't end. The spending is perceived to go on. So pay-go cannot apply to it. You cannot review the program. It is only on the tax side that it applies. The effect of that is this is a mechanism to force a tax increase because what this basically says is without 60 votes, you cannot continue the lower tax rate. But on the entitlement side, you can continue to spend the money not subject to a 60-vote threshold. Those are two different approaches to the two sides of the ledger in the Congress. So by taking this action in the House and passing this language, they have essentially said it is their goal to dramatically increase taxes, to use the mechanism of alleged pay-go, or ``tax-go,'' to drive major tax increases on the American public. If you are on the Democratic side of the aisle in the House, or maybe even on the Democratic side in the Senate, that may make sense; you may want to raise taxes. It is the tradition, of course, of the party to like to raise taxes, I guess. That is how they got the title ``tax and spend'' fixed to their nomenclature. But this is rather a brash way to do it; to start right out with the first major enforcement mechanism for budget, supposedly, restraint being a mechanism that doesn't reduce spending at all, doesn't restrain spending at all. All it does is force us to raise taxes or at least be subject to a 60-vote point of order if we want to maintain taxes at their present level. Some may say: We need to raise taxes; the tax burden in America is not large enough on earning Americans, especially on high-income Americans. I fundamentally disagree. Why? Because when one looks at the present law and what is generated in revenues, we are seeing a dramatic increase in revenues in this country. Revenues have jumped in the last 3 years more than they have jumped in any period in our history. That is because we have in place a tax system which has created an incentive for people to go out and invest and undertake economic activity which has, in turn, generated revenues to the Federal Government. Historically, the Federal Government revenues have been about 18.2 percent of the gross national product. That is how much the Federal Government has historically taken out of our economy and spent for the purposes of governance. That is the average. We are now getting back in tax receipts, because of these large increases over the last 3 years, close to 18.4, 18.5 percent of gross national product, so we have actually gone over what is the historical level of revenues to the Federal Government. We are generating more revenues than the Federal Government historically gets. That is good news. It has been done in the right way, by the way. We have generated this extra revenue by creating an atmosphere out there where people are willing to invest in taxable activity. We have seen it over the years. In fact, President Kennedy was the first one to appreciate this, followed by President Reagan, and then President Bush. When you get tax levels too high--the American people are creative. We are a market economy with an entrepreneurial spirit, and when you raise taxes too high, people say: I am not going to pay that tax rate. I am going to invest in something that avoids taxes, some highly depreciated something that expenses items like municipal bonds, something that allows me to put my money where I don't have to pay that exorbitant tax rate. What has happened, however, under the Kennedy tax cut and the Reagan tax cut and the Bush tax cut is when you get taxes at the right level, when you say to the American entrepreneur and American earner: We are going to charge you what is a reasonable tax rate on your investment, then the American people go out and they invest in taxable activity. That taxable activity generates jobs and jobs create growth. It also is a much more efficient way to have money used. You don't have money inefficiently being invested for the purpose of avoiding taxes. Money is instead invested for the purpose of generating activity, which is productive. As a result, the entire economy rises, as has happened in the last few years, and you generate significant revenues to the Federal Treasury, as has happened in the last few years, and is projected, by the way, to continue--both by the CBO and OMB. Some will say: Sure, but that doesn't point out the fact that the high-income people in America got a huge tax cut under this tax proposal. Remember, we are generating more revenue from this tax cut, more revenue than we got before. We had a down period. There are going to be a lot of debates about that. My view is it came out of the bubble of the late 1990s and the attack of 9/11 and the initial impact of the tax cut. But that has all been reversed to a point where we now have an economic situation where we are generating more revenues to the Federal Government than we have as an historical norm. So we are getting more revenues from this tax system. Interestingly enough, the tax system is more progressive. It is the most progressive it has been in history. The American people with incomes in the top 20 percent are paying 85.2 percent of the Federal tax burden. The top 20 percent pay 85 percent of the tax burden. That compares to the Clinton years where the top 20 percent were paying 84 percent. So, actually, the top 20 percent are absorbing more of the tax burden of America, generating more revenues to the Government, and not only that but the bottom 40 percent of American income-earning individuals are getting more back than they did under the Clinton years, almost twice as much. If you earn less than $40,000 in America, you are receiving more back than you did in the Clinton years because of the fact of the earned- income tax credit--in fact, almost, as I said, twice as much. We have a law now that is doing two extraordinary things: it is generating huge revenues to the Federal Treasury because of the economic activity it is encouraging--creating jobs, creating investment, creating taxable events--and it has created a more progressive tax system. That is the good news. So why do we want to raise taxes? Why do we want to go back and raise taxes on that situation? I don't think we should. But if you follow the pay-go proposal that has been brought forward by the House, that is the only option that occurs as these tax policies start to lapse in the year 2010. I would probably be willing to fight that fight. In fact, I am willing to fight that fight if we treated the spending side of the ledger the same way under pay-go, or under ``tax go,'' as I call it, but we don't. As I mentioned earlier, because of the way the baseline works around here, the spending side of the ledger does not have to be looked at under the pay-go rules. You can continue to spend on those entitlement programs whatever is in their traditional spending patterns, whatever they are, plus increases as a result of more people using them. Granted, you can't create new entitlement programs. Those would be subject to pay-go. And you can't dramatically expand the programs. For example, the Part D premium would have been subject to pay-go--was subject to pay-go. But that is only a small portion of the spending issue. The real essence of the spending issue is the underlying entitlement, as is, of course, the essence of the tax side, the underlying rate. What you have essentially done is create a mechanism which, because of the way we score spending versus taxes, causes taxes to be subject to a 60-vote point of order but does not cause spending to be subject to the same discipline. So the practical implications of it are that it will basically be used primarily as a force for forcing tax increases on the American people. That is almost automatically, by the way, because in 2010 these taxes that are in place, these tax rate changes, lapse. Under the rules they will be subject to a 60-vote point of order and getting 60 votes around here for a tax cut, as we know, is pretty difficult. This is the problem with pay-go as it is presently structured. Interestingly enough, the House has also done this in a way that doesn't even go to the traditional pay-go rules, which would involve sequester, as I understand it. They have done this outside the statutory process. They have done it as a rule and therefore the true enforcement mechanism against a new entitlement, to the extent pay-go would apply against a new entitlement, would be sequester. What is sequester? It essentially says that either you offset the new spending with spending cuts somewhere or else you have an automatic event which does it for you across the board. That is the right way to do this. You should have a sequester. So the failure to get sequester as part of the exercise just once again shows that there isn't a seriousness of purpose in this rule as it was passed by the House relative to spending restraint. There is only a seriousness of purpose relative to making sure that taxes go up. You really can't defend that position unless you are willing to take the position that really what we are interested in is raising taxes because otherwise, to defend that position, you would have to say: Yes, but we didn't want it to apply to entitlement programs that already exist. And even if there is a new entitlement program we didn't want it to apply to that new entitlement program with any enforcement mechanism that might actually require us to cut spending. We will just sort of finesse that one. The only thing we really want this to be required to attach to is whether taxes go up in 2010. So I do think it is ironic, if not a bit disingenuous, to have one of the first major items of principle upon which the House Democratic leadership is going to stand be that they want a rule that puts in place the requirement that we raise taxes. In my opinion, it shows there maybe is a superficial purpose relative to actually defending and controlling spending. I have not been one to shrink from pointing out that my side has not done a great job on spending restraint. I have been rather definitive about that. But I do think that it is inappropriate to start this Congress with the statement that we are going to be fiscally disciplined and then claim that fiscal discipline is going to be hung on one rule. And that appears to be the only thing done over there on the issue of, as they say, ``fiscal discipline,'' one rule which as a practical matter has no practical effect on spending restraint. None. There are ways to correct this. There are ways to make this rule a statute. In fact, the Senator from North Dakota has proposed that. There are ways to make this rule apply appropriately to restraining entitlements as well as restraining the issue of tax policy, if that is what you want to do. I might be inclined to support such a rule if it were balanced, if it said we are going to be as aggressive on the issue of spending restraint and entitlements as we are going to be aggressive on the issue of defining how taxes are applied, but that is not the case. That is not the case at all. This is a rule that comes at us, that treats these two accounts differently and inappropriately in the sense that it treats one as apples, one as oranges, and then says we are only going to deal with the apples. It is not good policy. For some reason, unfortunately, it has managed to take on a life of its own relative to this nomenclature--pay-go--so that there is almost a sacrosanctness to it. We had an idea around here for years called the lockbox which took on that same sort of sacrosanct concept even though it also was a bit illusory as to what it accomplished versus what it claimed to accomplish. This proposal has the same problem. It is illusory as to what it accomplishes compared to what it claims to accomplish. It does accomplish the raising of taxes. It does not accomplish the disciplining of the entitlement side of the spending accounts. I understand that this matter is probably not going to be raised on our side until we get to the budget process. That may or may not be the right place to raise this issue because if you are going to do it statutorily, which is actually the way you should do it, the budget process can't accomplish that. But should we, and when we do approach this topic, I hope we can amend this in a manner which would allow us to have it play fairly so that we had apples on both sides of the agenda, both sides of the ledger, or oranges on both sides of the ledger, so that an entitlement program, when it reached its authorizing term, would have to be subject to the issue--not new entitlements, but the actual underlying entitlement. When you have a tax program, when it hits its authorized life, it would be subject to the same. That would be the right way to do it, but it is not the way the House did it, and it wasn't done that way intentionally. I would like to think that it was just inadvertent that they left out entitlements, but it is not. They left it out because the driving thrust--and I think the reason it has taken on such a life of its own in the nomenclature--the driving thrust is to use this as a mechanism to basically attack the tax cuts of the early 2000 period. It is not an attempt to restrain the rate of growth of this Government on the entitlement accounts. Why do we need to restrain the rate of growth on the entitlement accounts? It is very simple. The numbers are stark, they are there, and everybody agrees to them. By the year 2025, three accounts in this Government--Social Security, Medicare, and Medicaid--will absorb 20 percent of the gross national product, 20 percent. By the year 2040 they will be absorbing almost 30 percent of the gross national product. If you recall what I said earlier--which I can understand that you don't because I have been going on for a long time--the revenues of the Federal Government are only 18.4 percent of the Federal gross national product. So, by 2025, because of the retirement of the baby boom generation, we will simply be unable to afford this Government unless we are going to radically increase the tax burden on all Americans, working Americans. It is pretty obvious to me you can't tax your way out of this problem. You cannot put a burden on the next generation of 22, 23, 24 percent of gross national product as being their tax burden because that means you deny them the ability to live a lifestyle like we are living. You deny them the extra dollars they would need to send their children to college, to buy their homes, to be able to do what they want to do with their life, because all of that money is going to go to taxes to pay for all the entitlements on the books which we have to pay for as a result of the retired generation. You cannot tax your way out of this issue, even if we agree with the static models that say as you raise taxes, you get more revenue. I happen to not believe in that. We have proven with Kennedy, Reagan, and Bush cuts that does not work. Even if you were to accept you cannot tax your way out of this problem, you have to address the spending side of the ledger. That is why you have to have a real pay-go rule--not a tax- go rule, a pay-go rule--that actually does address the spending side of the ledger aggressively as it addresses the tax side of the ledger or you should not have the rule at all, because you are basically prejudicing us to move down the road of tax increases and not addressing the fundamental problem, the fundamental issue that is driving the problem our children will confront, which is they are going to get a country they cannot afford. Our generation is going to give them a country they cannot afford. That is not right for one generation to do to another generation. There are ways to address this. There are substantive ways to address it. The Senator from North Dakota has been one of the leaders and now, as chairman of the Budget Committee, gets to be the leader--I welcome him to that role--in trying to come to some resolution on this whole issue of how you get to the balance between spending and taxes in the face of the human demographic, this huge retirement that will occur and the pressures it will put on our society. We are getting off on the wrong foot if we simply say we are just going to do it on the tax side of the ledger. That is essentially what this proposal that came out of the House does. There are better ways to do it. There are better ways to structure the proposal. The issue has to be addressed. It means as a society we have to address it. We simply cannot do it on the tax side of the ledger. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to pay special tribute to U.S. Army CPL Matthew Joseph Stanley of Wolfeboro, NH. Tragically, on December 16, 2006, this courageous young soldier and two of his comrades gave their last full measure for our Nation when their Army vehicle struck an improvised explosive device in Taji, Iraq, north of Baghdad. At the time of this hostile action Corporal Stanley, a cavalry scout with C Troop, 1st Squadron, 7th Cavalry Regiment, 1st Cavalry Division, based in Fort Hood, TX, was serving his second tour in Iraq in support of Operation Iraqi Freedom. Matthew was a 2002 graduate of Kingswood Regional High School where he was wellknown and liked by his teachers and fellow students. Classmates remember Matthew as fun, always laughing and having a smile on his face. Family and friends say he was one of the nicest guys you would ever want to meet and remember his fondness for hunting and fishing. Sensing a call to duty, and because of his desire to protect his country, in December 2003, Matthew joined the U.S. Army. Upon completing basic training at Fort Knox, KY, in the spring of 2004, he reported to Fort Hood, TX. The awards and decorations that Corporal Stanley received over the succeeding months are a testament to the strong character of this man. They include the Bronze Star Medal, Purple Heart, two Army Commendation Medals, Army Good Conduct Medal, Combat Action Badge, National Defense Service Medal, Iraq Campaign Medal, Global War on Terrorism Service Medal, Army Service Ribbon, Overseas Service Ribbon, and Expert Rifle Qualification Badge. He was posthumously promoted to the rank of corporal. Patriots from the state of New Hampshire have served our Nation with honor and distinction from Bunker Hill to Taji--and U.S. Army CPL Matthew Stanley served and fought in that same fine tradition. During our country's difficult Revolutionary War, Thomas Paine wrote ``These are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman.'' In these turbulent times Matthew stood with the country he loved, served it with distinction and honor, and earned and deserves our love and thanks. My sympathy, condolences, and prayers go out to Matthew's wife Amy, his parents Lynn and Richard, his brothers and sisters, and to his other family members and many friends who have suffered this most grievous loss. All will sorely miss Matthew Stanley, a 22-year-old patriot who was proud of his family, proud of where he lived, and proud of what he did. In the words of Daniel Webster--may his remembrance be as long lasting as the land he honored. God bless Matthew Joseph Stanley. corporal jonathan e. schiller

Mr. GREGG

Mr. GREGG. Mr. President, parliamentary inquiry: Will the Senator yield for a question?

Mr. GREGG. I was wondering if the Senator will allow us to set up a sequence of speakers after the Senator speaks.

Mr. GREGG. I ask unanimous consent that at the conclusion of the statement of the Senator from Vermont, the Senator from North Dakota be recognized for 5 minutes and then that I be recognized for 15 minutes. Does the Senator from Ohio seek recognition, also?

Mr. GREGG. It doesn't matter. Then the Senator from Ohio be recognized after I complete my remarks.

Mr. GREGG. At the conclusion of the remarks of the Senator from Ohio.

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

Mr. GREGG

Mr. GREGG. Mr. President, I rise to discuss what is the last pending major piece of business relative to this Congress and is headed toward the Senate from the House, something called the extenders bill. To put this in the proper context, there are a number of tax initiatives which are going to lapse this year and need to be extended--things such as the R&D tax credit, such as the deduction which teachers can take when they buy materials for their classrooms. Teachers--especially elementary teachers--seem to do a lot of that. They deserve that recognition; also, things such as tuition tax credit. These are all extenders which should occur. Were they to occur in the proper order, they might cost as much as $12 billion. However, the bill that is headed toward us doesn't cost $12 billion; it is going to cost $39.5 billion. At least that is what we think it is going to cost. We haven't had it finally scored. But that is what we believe is a reasonable number to put on that. That will be added to the deficit. It will be at least $17 billion over what is known as pay-go, which is a mechanism that disciplines tax cuts. It doesn't discipline spending, regrettably. I hope we can restructure it, and then I might be a supporter of it. But it is $17 billion over what is known as the pay-go baseline. This represents $39 billion of funding which will be added to the debt. That is incredible as the last act of Congress. It will actually be, arguably--depending on how you define the Part D premium exercise, which added trillions of dollars in the outyear debt--either the largest or the second largest budget buster passed by this Congress, $39 billion. It has in it a large amount of items which have nothing to do with extending taxes and has a lot to do with personal interests of various special interest groups around this country who have the capacity to get things put in bills. Probably the most significant one is conversion of a program called the Abandoned Mine Land Program which basically will create a new $4 billion cost to the American taxpayer to pay for health insurance of mine workers and former mine workers which should have been paid for by the coal companies. In other words, it is a direct transfer of payment from the corporate coal companies' obligations to support the health care of these miners to the American taxpayer. And it is a directed program, a mandatory program, not a discretionary program. So it basically cannot be reviewed or adjusted in the outyears. It is probably one of the most egregious things we will do in this Congress in the area of abandoning fiscal discipline and raiding the taxpayers' pocketbooks for the benefit of a small group of people and corporations. It, also, includes something called the doctors' fix. It is appropriate that we correct the amount of money that doctors are reimbursed for under the Medicare Act. There is a 5-percent doctor reimbursement. It is not fair to doctors to be asked to bear the burden of the expansion of Medicare costs, and it should be corrected. But the understanding always was--at least I thought it was--I guess I am naive--that it was going to be paid for with real dollars. That wasn't exactly what was said here. There are some real dollars being used, but there are real dollars that do not have anything to do with the issue. They are taking something called the stabilization fund and applying it to doctors. That pays for some of it. That arguably is real dollars which should be used in this event, but as a matter of policy, you can't fight it from a budget standpoint. It is real dollars and bad policy. But there is another group of dollars being used that does not even exist and is being claimed as part of the payment. They are going to correct a hole in next year's doctors' fix which will double next year's fix; take that money that doesn't exist and claim they are taking that money to pay off the doctors' fix this year. It is an accounting gimmick of extraordinary brazenness, which if you did it in the corporate world, you would go to jail. There wouldn't be any question about it. There would be a clear-cut jail sentence tied to this one if this were a corporate gimmick used by a corporation and put on the shareholders or the investors in your company as something that was appropriate. It is an outrage of the first order on the American taxpayer and our children, because who pays for this? Our children pay for it. That is what happens. The bill is laden with earmarks, where this group or that group or that one--the District of Columbia gets $150 million, the State of Tennessee gets $35 million, and the State of Nevada gets $4 million. I don't know how this one got in here: The Music Writers of America are going to get $3 million. The music writers will get $3 million from the taxpayers and put on the debt. By our standards around here, it wouldn't even make an asterisk. But it is what this represents that is so outrageous. The rum excise revenue sharing with Puerto Rico, $184 million; special depreciation for ethanol plants. I don't think there has ever been a financial bill which has come through this body that didn't have something for ethanol. Ethanol is a great idea. I am for it now. I used to be suspect about it. But it is such a vertical, integrated subsidy. Why do we have to keep throwing subsidy after subsidy into it? In fact, not happy enough with that little exercise, they also had to extend the tariff on ethanol that comes into the country from international producers so that the Northeast, which can't get the ethanol from the Midwest because it can't be shipped through the pipelines because ethanol can't be shipped through the pipelines because it bonds with water and the pipelines will not work--the Northeast, which can only get it shipped efficiently and cost effectively, say, from Brazil and have it shipped in by boat, has to pay a huge tariff on that--54 cents a gallon, which makes it economically unfeasible, even though it is an alternative fuel source that should be used throughout our country. And granted, we would like to have it produced in America, but I would rather be buying ethanol from Brazil than oil from some of our friends in the Middle East, such as Iran. Yet this makes it virtually impossible to do that. It is good policy, I say with great irony and sarcasm. Of course, it has nothing do with tax extenders. Then there are serious policy implications. For example, it extends the sales tax deduction, which is a policy of essentially saying to high-tax States: You should increase your taxes on your people at the expense of the Federal Treasury. The sales tax deduction is nothing more than a revenue sharing for the Federal Government, where the Federal government says to a State: We will give you a deduction for increasing your taxes and the Federal taxes will then go up for everybody else to pay for that deduction. There are a lot of States that don't have a sales tax. There is no reason they should be penalized in this way. There is no reason people in New Hampshire should have to pay sales tax to subsidize a high sales tax in the States of New York or Texas or California. It doesn't make any sense, from a policy standpoint. This is not distributed in a very equitable way. The only people who can take advantage of this are the itemizers. Itemizers, by definition, usually earn more than $60,000, at about the breaking point where you start to itemize your tax deductions. Basically, low-income people who pay a sales tax will see their sales taxes go up because States will want to raise them in order to claim their deduction, and low-income people will now have to pay more in sales tax and not be able to deduct it; whereas, high-income people in those States deduct it. It doesn't make any sense policywise or from a tax standpoint. It is just one important effort by one group of States that want to get this deduction put in place to take advantage of a bill coming through here. The bill, as I said, is arguably the biggest budget buster ever brought forward by the Republican Congress. That is ironic in and of itself, isn't it? That is pretty ironic. The way it is being brought forward is interesting. It is being brought forward in a manner which will make it extraordinarily difficult. This is being done by the Republican leadership for the Republican membership in a way that makes it extraordinarily difficult for anyone to attack the bill at any point and raise any of the issues which I just raised. In other words, if I wanted to address this deduction of $35 million for Tennessee or if I wanted to address the music writers item, I will not be able to do that. That option is not going to be allowed to me on a traditional vote nor on a motion to strike. I probably would lose those motions, but that is not going to be available to knock those earmarks out. If I wanted to raise the policy arguments on the doctors' fix, the fact that you have this unbelievable accounting mechanism used to pay for it, I am not going to be able to do that as Budget chairman. That will be denied. The Republican leadership is denying Republican membership the capacity to address these serious fiscal issues in this bill, including the fact it is $39 billion added to the Federal debt. It is going to be brought over in a manner which I have never seen happen before, probably because it is the biggest budget buster in the history of our country passed by the Republican Congress. They do not want to have anybody highlighting it but are sending it over as a message from the House--not as a bill but as a message from the House, which dramatically limits the ability to attack it or raise issues by it. ``Tax'' maybe is the wrong term. Then they are going to fill the tree so no amendments can be made. Then they are going to have the final vote with motions to concur with the House message. It is obvious they have the votes to do this. This bill has so much in it for so many different little folks and issues around here that they have racked up the vote count to the point where they can accomplish it. Well over 60 votes would be for this bill. The votes are there. They can do it. That is the way the majority works. But we have to ask this question. The American people took the reins of government away from the Republican Party, the Republican Congress, in this last election. They did so in large part because they were tired of our hypocrisy as a party on the issue of fiscal responsibility. It would appear their concerns are justified. It is true that our colleagues on the other side of the aisle will probably be worse at fiscal management than we are. We have shown it to be in our nature to spend money. If you add up all the things they talk about in their campaigns, they will spend a lot, but at least they will not be hypocritical, going to the American people and saying: We are the party of fiscal responsibility. We have to ask how we as a party got to this point where we have a leadership which is going to ram down the throats of our party the biggest budget buster in the history of the Congress under Republican leadership. Anyway, the American people figured it out. I am sorry we haven't figured it out yet. I yield the floor.

Mr. GREGG

Mr. GREGG. I thank the Chair.

Mr. GREGG

Mr. GREGG. Mr. President, at this time, under the unanimous consent agreement, I will make my point of order. The pending bill violates three significant elements of the Budget Act. After I make the point of order, I know the Senator from Iowa, the chairman of the Finance Committee, is going to move to waive it. And then he has 15 minutes and then I will have 15 minutes and we will explain the reasons for the issue. So at this time, I make the following point of order. The pending motion to concur violates section 302 and section 311 of the Budget Act because it exceeds the Finance Committee allocation and breaches the revenue floor set under the fiscal year 2006 budget resolution. It would also increase the deficit in excess of the pay-go limit by $17.5 billion. I raise a point of order against the motion under section 302 and 311 of the Budget Act and section 505 of the budget resolution for fiscal year 2004.

Mr. GREGG. Mr. President, have the yeas and nays been ordered under the unanimous consent agreement?

Mr. GREGG. If they have not been ordered under the unanimous consent agreement, I would ask for the yeas and nays.

Mr. GREGG. Mr. President, the Senator from Iowa, I understand, has the first 15 minutes. Mr. President, parliamentary inquiry: It is my understanding that the time now running is running against the time of the Senator from Iowa; is that correct?

Mr. GREGG. To begin with, I believe the time of the Senator has expired, unless I cannot count.

Mr. GREGG. Under the unanimous consent agreement, I believe the Senator from Iowa had 15 minutes, then I have 15 minutes. I believe the time has run against the Senator from Iowa; is that correct?

Mr. GREGG. Mr. President, parliamentary inquiry: Can the Senator from Iowa reserve time?

Mr. GREGG. Thank you. This is an embarrassing situation. It is embarrassing to be chairman of the Budget Committee in the Republican Party and have a bill brought to the floor of the Senate which does such a grievous harm to the budget, to the deficit, and to our obligations and responsibilities of fiscal fairness to our citizens. The budget was set up in a manner that would have allowed all the tax extenders the Senator from Iowa has so aptly and appropriately praised--and which I support--to have been put in place without any budget points of order against them. In fact, it was a result of efforts on my part that we created $106 billion of room within the budget so that we could do tax extenders dealing with things such as the R&D tax credit, dividends, and capital gains because I consider them to be extremely important, as does the vast majority of our conference. But what has happened here is that wasn't enough. This bill, which could have been done within the terms of the budget, now comes to us well over what were the original proposals, not only in the area of tax laws--and you may be able to defend some of the tax policy--but in the end, it is a spending policy. This is an omnibus spending bill. There is a lot of spending initiative in this bill that is inappropriate and not authorized. That is why we have a Budget Committee to step up and say: Listen, you want to put $4 billion in to move the responsibility for health care on certain coal mines from the coal mining companies to the taxpayers, and it is supposed to go through the authorizing committees and come to the floor; it is not supposed to be stuck in a bill like this. If you want to set up a phony mechanism to fund what should be done, which is a quick fix, a phony mechanism, if properly scored it would represent about $36 billion of new spending over the next 5 years. But because they set it up as a 1-year item, they were able to get around that. There is a budget point of order against that type of action. You want to do earmarks--and yes, there were earmarks. Regrettably, the Senator from Iowa misrepresented--if he was referring to me--my representation of what the earmarks were. I don't consider the sales tax to be an earmark. I consider it to be bad policy. I don't even consider it to be a budget issue. The Finance Committee has every right to stick that in the bill within the terms of the budget as long as they meet the budget requirements. It is a matter of policy. They chose that policy. I disagree with that policy. I think it puts States that don't have a sales tax at a disadvantage and puts low-income Americans at a disadvantage because they cannot deduct it. That is not an earmark. I never said that. To represent that I said that is inaccurate. What I said was that you shouldn't bring a bill to the floor that is so inappropriately over what the budget set out as the proper role for this committee in the area of tax policy and what the Congress voted for and which has spending in it which hasn't been authorized and which actually creates new mandatory programs which nobody even knows about or spent any time thinking about, which is going to cost us billions of dollars in the outyears. You shouldn't bring that type of bill to the floor to begin with as the Republican Party because it is wrong, outside of fiscal discipline, which is what we are supposed to stand for--at least you shouldn't bring it to the floor in a manner in which, say, you are not going to allow it to be amended, you are not even going to allow motions to strike to lie against it. You are going to cause us to vote on a message from the House? A message from the House--we are going to concur in a message from the House. We are not going to vote on the underlying substance of the bill. We are not going to be allowed to amend the underlying substance of the bill even though it adds $39 billion to the deficit. We are not going to be allowed to strike earmarks in this bill--and there are earmarks in this bill--such as the $150 million for the District of Columbia, the rum excise revenue sharing proposal for Puerto Rico, the special depreciation for ethanol, the extension of the tariff on ethanol coming into this country from Brazil, and the earmarks go on. We are not going to be allowed to vote on any of those items. A motion to strike, the most simple right any Senator should have on any major vehicle coming before the Senate is being denied to us. This is an omnibus bill that violates three sections of the Budget Act which were not put in place for arbitrary or technical reasons. They were put in place to try to deliver fiscal discipline to the Federal budget so that we don't pass on to our kids a lot of debt for expenditures which we want to do today. That is the basic problem we have as a Congress. We continue to do things around here so that we can claim back home that we made these decisions which spend money today, and then we take that bill and we give it to our kids who are not even born, our grandchildren who are not born. The purpose of the Budget Act is to keep us from doing that. These are real budget points of order. There are some budget points of order which I totally agree are technical. The Senator from Iowa has pointed out one about which he has a very good case. I will be happy to work with him to try to correct that situation. But these are not those. There is spending in this bill which is an affront to anybody who genuinely believes that we should be fiscally disciplined. It creates a new mandatory program of $4 billion which will take money, which should have been paid by the coal companies to support the health care of people who are harmed or going to be harmed, and put that cost on to the American taxpayers. It is called coal in the stocking, I think, in the Christmas season. There is this doctors' fix. I am 100 percent for the doctors' fix. Obviously, we should pay doctors fair compensation to keep them in the Medicare Program, but the understanding was we would but pay for it with real dollars, not some phony mechanism that came out of the House in the dying days of the House session, a phony mechanism which, if carried out to its natural extreme, will cost $36 billion over 5 years. We don't score it that way because they use an extra little mechanism to make sure it doesn't happen, saying it will only be for 1 year, even though we know we will have the same problem next year. We should not have a bill on the floor of the Senate that cannot be amended that is filled with earmarks that exceed the budget. One can argue that maybe earmarks may make sense, and they do make sense in some instances, and as long as they are within the budget, because you are not spending more, you are not adding to the deficit. But this bill does spend more, as I have pointed out. I have said it on occasion that the job of the budget chairman is a touch thankless. In this instance, as I said, it is embarrassing because it is sort of that old Pogo line: We've met the enemy and he is us. The only people responsible for this is the party that is still in the majority. Sure, the other side is an accomplice. They understood it was being done; they were for most of this stuff. As I said, when they obtain power, I suspect their activities are going to be much more egregious in the area of spending discipline. Maybe they won't be. If we look at the record, I suspect one can argue that. But, quite honestly, the only people who are to blame in this little exercise are us. I just sort of thought that after the last election we might have said to the American people: Yes, we understand. You think we are supposed to be the party of fiscal discipline, and we haven't been. We are going to try to be now. We are going to try to correct that. We have been given another opportunity, those of us who were not up for election or survived reelection. We are going to try to do it a little better. We are not doing it better. We are just doing the same darn thing: spending money we don't have that our children are going to have to pay for. I regret it. My job is to point it out. I intend to do that. I recognize I am going to lose this point of order, probably overwhelmingly, but my job is to point it out. There are three points of order against this bill, and every one of them is real. Every one of them deals with money. Even the Senator from Alaska should probably support them. One is a 302-point of order that deals with the fact that it is billions of dollars over the allocation of the committee. Another is the fact that it spends more than the committee is allocated. And the third, ironically, is the pay-go point of order that we have heard so much about from the other side. It is an interesting situation we confront here. As we close this Congress, I hope we will show a little fiscal discipline and vote for these points of order.