Tom Harkin

Mr. HARKIN

Mr. HARKIN. Yes. I thank the Senator from Nevada for his questions and for answering one of my questions, too. The Senator is right. There is a part in this budget where essentially the administration points out that with the huge deficits, the Social Security system will be unsustainable in its present form. Talk about code words. There is a code word for privatization. Charge Social Security, turn it over to the private marketplace, and let people take a chance on whatever. I think the Senator from Nevada is absolutely right. I will not say every Republican, because I can't cast the net that far. But I would say there are forces in the Republican Party--the Senator mentioned Senator Dole and Dick Armey. Newt Gingrich said he wanted Medicare to wither on the vine and also led the charge to try to privatize Social Security. There are forces at work and they are in control of the Republican Party now that do not like Medicare. They do not like Social Security, and they will do whatever they can to get rid of it. I believe this budget is a step in that direction. I yield to my friend from Illinois for a question.

Mr. HARKIN. We are not going to balance it. But I tell you what they are doing. Effectively, they are going hat in hand to the Chinese, and they are saying, Please loan us some money. The Chinese will buy our bonds. Japan is buying our bonds. I think Japan now is the single largest owner of bonds. I think China is No. 2, if I am not mistaken.

Mr. HARKIN. So we have a huge trade deficit with China. We are buying everything from China. They get the dollars, and we go hat in hand, a debtor nation, and effectively say, please, buy our bonds.

Mr. HARKIN. I ask my friend from Illinois, what is the trade deficit we have with China?

Mr. HARKIN. Yes, I am delighted to yield.

Mr. HARKIN. I tell you, the Senator from Nevada has put his finger on it. Look, everyone knows, we had the $69 billion last year. We knew it wasn't enough, so he had to come back and ask for $87 billion. He got that. We also know that is not enough. Yet the President has the audacity, as the Senator has pointed out, to have a budget that on September 30 of this year has no money for Iraq. I say to my friend, no one believes that. Yet the President puts it in his budget as though it is factual.

Mr. HARKIN. I am pleased to yield.

Mr. HARKIN. Madam President, I have had a chance now to look over the President's budget. What with being out of our offices and stuck over in the Capitol and not being able to see some of the people we were supposed to see and conduct business as usual, I have had the chance to look at the budget. Of course, I had heard it was kind of bad. I read some of the preliminary reports, but it was not until I really started digging into it and looking at some of the fine print and getting out a calculator and adding it all up that I realized how stupefyingly bad this budget is. It almost defies logic. After going through it, I can sum up his election year budget in four words: More of the same. More tax cuts for the wealthy, more massive spending increases on things such as Star Wars and, of course, that nice trip to Mars we are going to take, more giveaways to special interests, and more massive budget deficits. This is Mr. Bush's fourth budget submission, so now I think we can take stock. We can size up the full 4-year fiscal record of this administration. Quite frankly, the irresponsible actions of this administration over 4 years boggle the mind. In just 4 years, Mr. Bush has put in place trillions of dollars in tax cuts, overwhelmingly for the very wealthy. In spite of the huge deficits, the President now is demanding that those tax cuts be made permanent. At the same time, he is proposing tens of billions of dollars on new spending programs, and this includes untold billions for trips to the Moon and Mars. There is billions more for Star Wars, which Mr. Bush intends to build now and test later. President Bush has taken the projected 10-year surplus of some $5 trillion that he inherited from President Clinton and turned that into a projected 10-year deficit of nearly $5 trillion. Think about that. In 4 short years, this President and this administration have taken a $5 trillion surplus and turned it into a $5 trillion deficit, a $10 trillion swing. As I said, it just boggles the mind. By any measure, this is an astonishing record of economic mismanagement and economic malpractice. In fact, I challenge my colleagues to cite any President in the 215-year history of our Republic who has compiled such a record of sheer recklessness. The White House now says the deficit in the current fiscal year will be $521 billion. That is bad enough, but that is not the worst of it. Far more dangerous are the long-term, permanent, structural deficits that will result. Mr. Bush dares to claim he has charted a course to cut the deficit in half in 5 years. This has about as much credibility as his claim that Iraq possessed massive stockpiles of weapons of mass destruction. The fact is that, after 4 years, Mr. Bush has zero credibility on the budget. Let's look at his past projections and promises. In 2001, Mr. Bush promised: ``We can proceed with tax relief without fear of budget deficits.'' That turned out to be untrue. In 2002, Mr. Bush reassured us: ``Our budget will run a deficit that will be small and short term.'' That turned out, also, to be untrue. In 2003, Mr. Bush again assured us: ``Our current deficit is not large by historical standards and is manageable.'' That also is turning out to be untrue. This year, President Bush claims that the massive deficits he has created will be magically cut in half in 5 years' time. Is there any Senator in either party who believes that promise? I don't think so. Mr. Bush has not just created a structural budget deficit, he has created a structural credibility deficit. Few credible economists believe him anymore. The Washington Post sized up this budget in an editorial yesterday morning. The editorial was titled ``Bogus Budgeting.'' The editorial stated that: The Bush administration 2005 budget is a masterpiece of disingenuous blame-shifting, dishonest budgeting and irresponsible governing. The reality is that the deficits will persist at high levels even if the economy stays healthy. Year after year they will stay at high levels, until the baby boomers start to retire, and then the deficits will explode. If we look at the operating budget--that is not counting the surplus that comes from the Social Security taxes--the picture becomes crystal clear. Under the operating budget--again, excluding Social Security surpluses--Bush has a huge $675 billion deficit for this year. That is equal to 5.9 percent of our GDP, our gross domestic product, the second highest operating deficit since 1946. But President Bush claims this operating deficit will drop to $470 billion in just 2 years. Then, according to his own budget documents, the operating deficit begins to rise, reaching $500 billion in 2009--deficits as far as the eye can see. There are three huge problems here. No. 1, we are continuing to add debt at a very rapid rate. No. 2, the glidepath is not downward to lower deficits but upwards to bigger deficits, and it rises more rapidly as we begin paying Social Security benefits to the baby boomers and, as the Social Security surplus shrinks, the true direction of the budget disaster under Bush's plan becomes clear. No. 3, the Bush budget does not include costs that we all know we are going to have. For example, get this. The Bush budget does not include any additional funds for Iraq after September 30 of this year. In other words, for 2005, beginning October 1 of this year, fiscal year 2005, there are zero dollars for Iraq. We will have no troops there? We will have no support going to Iraq? After September 30 it is just going to all end? Does anyone believe that? Yet this budget has zero dollars in it for Iraq after September 30 of this year. That alone ought to tell you this budget is bogus. The 2001 tax bill left a timebomb called the AMT, the alternative minimum tax. In 2001, fewer than 2 million, mostly wealthy, taxpayers paid it. By 2010, if it is not changed, over 30 million taxpayers will be paying it, mostly middle-class families. Nobody around here believes that is going to be allowed to happen. Everyone understands it will be fixed, probably at a cost of over $400 billion. So, what does the Bush budget do? It just fixes it for 1 year. Again, bogus. What do these huge deficits mean, coming ahead? They mean we are increasingly dependent on the Chinese, Japanese, Korean, and other foreign governments and investors who buy our Treasury bonds. I said to someone the other day, after looking over this budget and looking over who is loaning us money to buy our bonds, we are actually borrowing money from the South Koreans to finance our deficit.

Mr. HARKIN. That is right.

Mr. HARKIN. From China?

Mr. HARKIN. The Senator from Illinois is absolutely right. I didn't believe it myself when I was first told of this. I started digging in the budget along with my staff. I said surely someplace in this budget they must have some money in there to fund our operation in Iraq. You will look until your dying day and you will not find one penny in that budget for our operations in Iraq after September 30, you will just find a note about possible funding.

Mr. HARKIN. I think the Senator asked a very good question. I don't know. I have not heard them say that. But that is what the budget implies.

Mr. HARKIN. I will just say to my friend all you have to do is go back and look at 2002, 2003, and 2004. Look at the last 3 years of the Bush budget and you can see what happened. They have dug themselves and our country into a huge fiscal hole. Now what they want to do, rather than trying to get out of it, is going to dig us even further into that hole and try to make it look not so bad. They are trying to cut here and cut there, and doctor things up a little bit so it doesn't look quite so bad. They put zero money in there for Iraq.

Mr. HARKIN

Mr. HARKIN. Mr. President, I thank my friend for his kind words and reciprocate by thanking him for his leadership on the floor and in our caucus, and for always being here to respond and make sure we have the information we need on which to base our votes. We served together in the House and we are together in the Senate, and I could not ask for a better neighbor either here or across the Mississippi River. I will close by again saying this--and I will have more to say about this later. The budget the President has proposed is just one that will harm America. It is going to harm our workers, increase our deficit and, quite frankly, it is going to put in jeopardy the Social Security and Medicare system. It is a shame all this has been squandered in just 4 years. I believe we in the Senate need to respond, we need to say no to this Bush budget, and we need to have a budget that puts us back on the path we were on just 4 short years ago. With that, we can have a budget that will be in balance, and we can have a future that is much brighter for our workers, for our children, and for our elderly. Mr. President, I will have more to say about the budget in the coming days and weeks before the budget resolution is brought to the floor. I thank the Presiding Officer. I yield the floor and suggest the absence of a quorum.

Mr. HARKIN. Well, it is one way some unscrupulous employers--I would not say all--will be helped. Again, I must say to my friend that prior to this rule being issued last year by the administration, and even during the debate on this last year, I never had one employer in my State come up to me and say we need that. Not one. Obviously, there are some someplace who want to get it changed. They must have very close friends in the White House. This is one way of working people longer hours. American workers now work a longer work week than any other workers in any other industrialized country right now. Now they want to work them longer and not pay them overtime.

Mr. HARKIN. Yes, to protect them and their right to overtime. The House of Representatives earlier passed a bill and it lost by about four votes. After we passed it, it went back to the House and they had a big vote to instruct conferees. In other words, telling their conferees to go along with the Senate provision on this. So we had that. We went to conference and before the conference came to this issue, the gavel was banged and we were never invited back. Guess what. What we voted on here and what the House agreed to disappeared, because the administration came in and said they didn't want it in the big appropriations bill we passed a couple weeks ago. So they thwarted the will of Congress, and of the conferees who never got to vote on the issue. Most important, they thwarted the will of the American people. But I have an amendment in my desk drawer and every appropriate opportunity this Senator gets, I am going to offer it here on the Senate floor because American workers deserve to have their overtime protected--nurses, firefighters, police officers, ordinary working people all over America. If they are going to be asked to give up their premium time with their families, they deserve time and a half.

Mr. HARKIN. We had a vote here last summer to basically keep this rule from going into effect. It passed the Senate on a bipartisan vote.

Mr. HARKIN. That is true. I want to be very fair. We have changed the Fair Labor Standards Act a number of times since then because some of the job descriptions, buggy whip manufacturers and buggy harness makers, have gone out, obviously. But, at the same time, we have always expanded overtime pay protection. So the Senator is right. This is the first time since 1938 where an administration has said we want to restrict, tighten down, the amount of people who are eligible for overtime pay protection.

Mr. HARKIN. Well, the Senator is right. Again, this is mind-boggling. I will say this--and again to be as fair as possible--there was one part of the proposal that was good, which was to raise the low-income base from about $8,000 to about $21,000. That means that right now, no matter who you are in this country, if your pay is less than $8,000 a year, you are guaranteed overtime regardless of what you do. Well, that needed to be raised for some time. Nobody argues that. They wanted to raise it to $21,000. We agree with that. But in doing so, they issued advice to employers on how to get around it. They said we are going to raise the base to $21,000, but here is advice on how to get around it. No. 1, what you do is simply work your people longer and you build that into their base pay. So you work them longer, but you don't have to pay them any more. Secondly, they said if they are near $21,000--let's say $20,500--you may want to raise their pay to $21,000 and then they are exempt and you save by not paying overtime. There is gimmick after gimmick on how they can basically get around it. I said this on the floor. This is like the IRS issuing advice to tax cheats on how to cheat on their income taxes.

Mr. HARKIN. The final result is the rules are still pending. They have not implemented them yet. As I understand it, they want to get the rules finalized by March, which is next month. So they want to finalize the rules, put them out there, and it is going to be very hard for us to turn them back again. But we will. The American people will not stand for having their overtime pay protection taken away. Time and a half, for time over 40 hours a week is something every American worker deserves. Some families rely on that extra time. They give up premium time and they work longer so they make a little extra money to get their kids through school. Now we are going to say we are going to work you longer, but we are not going to pay you overtime. The American people won't buy that. We are going to continue to fight here to protect their overtime rights.

Mr. HARKIN. That is right.

Mr. HARKIN. Mr. President, I ask unanimous consent to speak for about 5 more minutes.

Mr. HARKIN. Well, again, people in Illinois are not that much different than the people in Iowa. I hear the same things you hear. People are frightened. They are not frightened of Saddam Hussein. They are not even frightened by Osama bin Laden. They believe we will have the power and the wherewithal to protect our citizens, maybe not with absolute certainty but with enough that they will feel comfortable in their homes and businesses and in their travel. What they are frightened about is their kids' education. They are frightened about not being able to pay the next health care bill because they don't have adequate health insurance. They are concerned about whether or not there is going to be a viable Medicare system for their parents, and whether their parents will truly get any prescription drug help at all. There is some confusion right now. People were promised a prescription drug benefit. It passed the Congress last year. The President signed it. Now we are finding out that it is not going to help them that much and that most of the money is going to the pharmaceutical companies. That is what I find. People in Iowa are afraid that we are headed in the wrong direction. I sense this kind of mood among people, that they know it is not right.

Mr. HARKIN. If the Senator will yield.

Mr. HARKIN. There was a recent article in Time magazine talking about how life in America now for many middle-income families, low-income families has become a game of chance. The game is kind of rigged against you. I remember reading a little newspaper article and the headline was: Vietnamese Immigrants Achieve American Dream, Win State Lottery. The story went on to talk about this Vietnamese couple. They bought a lottery ticket and won the lottery. The idea that this is the American dream, a one-in-a-million chance of winning the lottery, that is the American dream, that our life is a roll of the dice, the odds are a million to one against you. No, that is not the American dream. The American dream is what your parents and my parents did, to work hard, to save, to buy a home of their own, to educate their kids and build a better life.