J. Kerrey

Mr. KERREY

Mr. KERREY. I thank the Senator very much.

Mr. KERREY

Mr. KERREY. Mr. President, my good friend from Utah just described two things that I see much differently than he does. The conflict we are having right now over Commerce-State-Justice is occurring as a consequence of the House and the Senate not finishing their appropriations work. They are supposed to be done by the first of October. We are supposed to have all 13 bills passed. Our work is supposed to be done and all the bills sent to the President for signature. We were not able to get the work done. We are not able to look much further than what has happened to fiscal discipline around here to discover why we have been unable to get our appropriations bills done, why there have been delays on the appropriations bills. The answer is we are spending a lot more than the budget caps allow. According to Bill Hoagland, who in the New York Times lays it out as accurately as anybody--I consider him to be an extremely reliable analyzer of the numbers--the appropriations bills we are going to pass will be $310 billion over the caps as estimated by CBO over the next 10 years, and that presumes that only inflation will be allowed over the next 10 years in growth in appropriations which we did not do this year. We are way beyond inflation this year. It is probably not $310 billion. It is probably much more than that. That is the problem. It is very much a case where we had a glass slipper that was too small for our great big foot, and we could not get all the things we wanted to spend into that shoe. The Republican majority, facing that problem, had to decide what it was going to do. It has delayed, delayed, delayed, and as a consequence, we are now in a situation where, if we attach anything to it that is objectionable to the President, it is going to provoke a veto. You know what you have to do to get the President to sign it. He will tell you what to do to sign it. If you are 27 days late, do not be surprised if you have lost leverage. Of course you have lost leverage; you are 27 days beyond the battle line, what the law tells us we are supposed to be doing with our appropriations bills. There are two things I want to talk about as we head toward the end of this session that I find to be very troubling. The first is what we are doing with the surplus itself. Again, the second thing the Senator from Utah said earlier is we balanced the budget in 1997 and that it came about as a result of the election of a Republican House and Senate in 1995. I voted for a Republican budget in 1995. I voted for a Republican budget in 1997 in order to balance it. But we began down this trail in 1990. That is when the budget caps were enacted. That is when we established sequestration to put in automatic across-the-board cuts if we were unable to get our budget inside the caps. There was a purpose. Balancing the budget was not an end in itself; it was a means to an end. What was the end? The end was growth in the economy. We believed that if you balanced the budget--in other words, if you spent less than you taxed--that that would produce growth in the economy. That was the argument, not just in 1990, but way long before that. I recall, when I was Governor, signing a letter in support of what the Republican Senate was doing in 1985 to try to balance the budget. It included a freezing of the COLA, which some say contributed to the loss of the Republican Senate in the 1986 election. I do not know if that is true or not. It was tough medicine. It would have balanced the budget. It is not easy to balance the budget. I remember voting in 1990, 1993, and 1997--and the criticism is always the same: I want to balance the budget. I believe deficit reduction is important. I just don't want to pay any more or take any less. The only objection is, you cut my program and increased my taxes. Other than that, I liked what you did. We had tough medicine in 1990, tough medicine in 1993, and tough medicine in 1997. All during those years, we had a means to say to our citizens: Look, I have to say no; I have a spending cap up until this year. If you came to this floor, and there was a motion to waive the Budget Act, it was tough to get 60 votes. Not anymore. Today, it is relatively easy to get 60 votes. I am not even sure we are going to have a vote to break the budget caps on appropriations. Listen to what Mr. Hoagland says: This year we started off with a $2.4 trillion general fund surplus. The appropriations is going to reduce that surplus by $310 billion. An additional $295 billion in surplus goes for two tax cuts: the $240 billion package we are battling over right now and a separate $55 billion reduction in taxes on long distance telephone calls. I listened to the argument. This is a Spanish-American War tax. For gosh sakes, the income tax is a World War I tax. Let's get rid of that, too, if that is the basis of why eliminating a tax makes good sense. But we are going to eliminate a $55 billion tax. We are going to increase payments to Medicare. That is $74 billion more in the surplus, another $44 billion going to increased pension benefits to military retirees. Tax cuts and spending increases come to $723 billion over 10 years. The surplus is actually reduced by an additional $187 billion because of interest costs, bringing the total to $910 billion. Since the 1990 Budget Act, signed by President Bush--all through the 1990s--we had to come to the floor, and if you wanted to offer something that spent more money, you had to have an offset. It was called the pay-go system. We discovered that tucked in this little $247 billion tax bill that we are arguing about is a provision that waives the pay-go provisions. I mean, we are abandoning everything that got us to where we are today. Again, I emphasize to people who want to know, what is this all about? Twenty-one million dollars have been created. The recovery, in my view, started prior to 1993. It started in 1991 and 1992. The deficit started coming down in 1992, and in no small part because of what we did in 1990. The full story did not begin in 1997. It did not start in 1993. It started in 1990. And now we are just throwing it all out the window, saying: It does not matter anymore; we have a great big surplus. That is why the American people are distrustful. That is why they are saying to us: Take that surplus and pay down the debt. That is why they are not supporting big tax cuts. I voted for the Republican tax cut the first time it came up. Then I went home and the people of Nebraska said to me: We don't want it. We don't want it. Pay down the debt. This fiscal discipline has been good for us. It has created jobs. It has promoted economic growth. There has been a positive result. So I say, especially with the Governor of Texas saying he is committed to a $1.6 trillion income tax cut and a $1.1 trillion payroll tax cut, that on top of what we have already done, in my view, that is unquestionably going to put us right back in the soup. That is the failed policy of the past. The failed policy of the past is when we said it doesn't matter if our budget is balanced. The failed policy of the past is when we were taking 22 percent of our income and spending it with 18-percent taxes coming in. Now it is the opposite. Spending levels are at 18 percent-- the lowest level they have been since the middle of the 1970s, before this year, before what we have been doing in the past week or so-- heading to 16 percent. It has not been at that level since Dwight Eisenhower was President. I have to say that given what Congress is doing, and what we are seeing at the Presidential debate level, my hope is the American people will wise up and say: We got to where we are with tough choices. We are about ready to throw it all down the drain. My belief is that fiscal discipline has not just been good for us here domestically, it has given us the strength to do an awful lot of things throughout the world as well. That is our greatest source of strength, our capacity to keep our economy growing. You do not have to look any further than the former Soviet Union and Russia. They have a GDP that is $30 billion less than we have for defense. I am not saying our defense ought to be lower. I support taking it higher. I do not compare our defense against Russia, but their GDP is so low they cannot take care of submarines such as the Kursk. I took a trip to Africa. Of the 11 nations we visited, they spend less than $10 per person on health care and $10 per person on education. The reason is their income is insufficient. They do not have the growth and are not producing things that the world wants to buy, and the United States of America does. So I do not want to go back to the failed policies of the past. I do not want to go back to ``voodoo economics.'' I do not want to go back to those days when we said to the American people that it does not matter whether or not our budget is balanced. We paid too big a price to get to where we are today. The American people not only are more prosperous and more enthusiastic about their economy and their future, but they have an awful lot more confidence in democracy as a result of our finally being able to do something about what was public enemy No. 1, all the way through the 1980s, and all the way through the 1990s. I am sure former President Bush remembers what happened in 1992. He had a guy by the name of Ross Perot who made the deficit a battle cry and enabled him to have an impact upon that Presidential election, and probably enabled then-Governor Clinton to win that election, with 43 percent of the vote. So you do not have to go back very far to see why it is that we have to reestablish fiscal discipline. We are going in the wrong direction. To get rid of the pay-go provisions is reason enough to vote against this tax bill for anybody who went all the way through the 1990s in this Congress. And that is the reason we are struggling with Commerce- State-Justice. The dirty little secret is that our spending appetite exceeds the budget caps that got us to where we are today. As I said, this sounds like all process arguments. But there was a big payoff in eliminating that deficit, paying down the public debt, and relieving the pressure upon the private sector of borrowing, as we have done. It did not just enable the economy to grow, it lowered the cost of borrowing money for a house, lowered the cost of borrowing money for an automobile, and lowered the cost of borrowing money for a business. In my view, at least as one former businessperson, it promoted an awful lot of economic growth. It has a huge impact on our capacity to create the kind of jobs that the American people want. There is a second troubling thing that I have heard said over and over during this tax debate and the debate on the Medicare balanced budget give-backs as well. Those are both provisions we have, recognizing in 1997 we took almost $300 billion out of Medicare for providers instead of the $100 billion that we thought. So we are trying to adjust that a bit and make things a little easier for--in my State, especially the rural providers--the providers, but also home health care people and long-term care providers, and so forth, that are in that package. I have heard it said over and over that, gee, this was largely bipartisan. Many of the provisions in this bill are provisions that were supported by Democrats. That is absolutely true. There are many provisions that are in this bill that were supported by Democrats. That is not the issue. The problem is, I heard one of my colleagues say earlier--he was describing negotiations with China--an agreement is just a temporary interruption in the negotiations. We had an agreement on pensions. We had an agreement on pension reforms. Democrats came on board saying: We recognize that in order to do pension reform, you are going to have to provide changes in the law that are likely to benefit upper income people. The distinguished Senator from Utah earlier talked about the 1 percent. He is absolutely right. Almost 40 percent of the swing in the deficit from 1992 to today, 43 percent, an estimate made by Bill Hoagland of the New York Times--43 percent of that came because income tax rates were higher, and we had a big run-up in the stock market, a big cashing out of stock options, and a big cashing out of pensions as well. So upper income people are paying more taxes, especially Americans who have more than $1 million of taxable income. They are paying a lot of taxes. So Democrats--I for one--acknowledge that if you are going to do a pension reform bill, it is likely to benefit upper income people. We are not going to demagogue that. It is likely to be that that is the case. But we asked for a couple little provisions to help that low- and moderate-income worker. They were tax credits. The chairman of the Ways and Means Committee, Mr. Archer, doesn't like tax credits. So he stripped the two provisions out that we had in there for small businesses to help them defray the cost of start-up pensions. He stripped the provision out that had a matching in there for this low- and moderate-income worker who is working for small businesses that have fewer than 100 employees. He stripped that out because he doesn't like tax credits. We had a deal. So when the Republican leadership got together, they yielded to Mr. Archer and stripped out provisions of the pension bill we wanted that made it more fair. I said last night, God created Democrats so we can ask the question: Is it fair? Sometimes we don't ask: Can we pay for it? That is something we have to train ourselves to do, and I thought we had through the 1990s with the budget caps. I talked about that earlier. But we asked the question: Is it fair? If we are going to spend money and try to increase the amount of pension coverage we have in the United States of America, shouldn't we try to do it for low- and moderate-income working people in the workforce with employers who have fewer than 100 employees? Shouldn't we do that? We answered yes. And Republicans in the Finance Committee agreed with us. That is what we got. Mr. Archer said he doesn't like tax credits. So when the Republican leadership all got together--without a hearing--they stripped it out. Guess what. With it stripped out, Mr. Archer still votes against it. So they took something out of the pension bill they now want us to pass, that we had insisted on in order to get Mr. Archer's support, and he still votes against the darn thing. That is why we are pushing back. That is why we urge President Clinton to veto this thing. We would like to get most of the things that are in this tax bill. We believe Vice President Gore is correct when he says we ought to make careful decisions and selections about whose taxes are going to get cut. That is what we ought to attempt to do. We ought to target those tax cuts. But you have to target the tax cuts, especially when you are dealing with pensions and health care, as much of this does, you ought to target it so as to increase the number of people who have pensions. All of us here in Congress aren't going to have any difficulty contributing to get another $5,000. We have plenty of disposable income to come up with the money to be able to increase our contributions. The problem is for that minimum-wage, or slightly over, individual in a small business who is struggling to get it done. The same on health insurance: If you are trying to increase the number of people who have health insurance, you have to do more than what is in this tax package. My friend from Texas, Senator Gramm, was talking about the value of the tax deduction. The value of the tax deduction is much greater the higher your income. I get a 40-percent subsidy as a consequence of the level of my income. But if my income is $16,000 a year, I don't get any deduction. If I am paying at the 15- percent rate, I get a 15-percent deduction. That is how it works. The Joint Tax Committee estimates that 26 million people will get benefits as a consequence of the health care provisions, but only 1.6 million of those people are people who currently don't have health insurance. Republicans in Congress, I think correctly, are saying that what Governor Bush said in the third debate, ``That is the difference between my opponent and I;'' he wants Washington to decide and select who gets a tax cut. Republicans apparently are saying that the Governor is wrong, because we are going to select who gets the tax cuts. If you are going to have a tax cut right now, it seems to me one of the things we ought to try to do is to say: This remarkable recovery we are having right now has been fabulous, but there are some people who have been left behind. Let's try to help them acquire pensions in their part of the American dream. Let's try to help them acquire health insurance in their part of the American dream. We don't do that. As I said, I heard my Republican friends assert several times that Democrats were on board and support many of the provisions. That is true. But we added provisions that were stricken out. We added provisions that would have made the proposal much more fair. I believe you cannot apply a fairness test every single time you are doing things. There are times when life isn't fair. But when you are giving tax cuts to American working families, it seems to me a test of fairness is appropriate. When you are trying to increase the number of people who have pensions in the workforce, when you are trying to increase the number of people who have health insurance, a test of fairness is appropriate for Members of Congress to try to apply to the piece of legislation we are considering. Those are the two objections I have to what is going on right now. The first is, I think we have lost our way when it comes to fiscal discipline, the discipline that enabled us to say to a citizen, when a citizen comes and says, Senator, it only costs $100 million over 10, would you offer an amendment, and I would always say in the 1990s, well, I have to have a ``pay for.'' I have to find an offset. Not anymore. If the pay-go provisions of the Budget Act are repealed, as is proposed in this tax bill, no longer will that be necessary. It used to be I would say: Look, this is going to be tough because it is beyond what we authorized in the Budget Act and to get 60 votes to waive the Budget Act is going to be hard. Not any longer does it appear to be difficult to waive the Budget Act. That discipline that enabled us to get where we are today is at risk in the closing days of the 106th Congress. I hope that in this election the American people will say loud and clear we recognize the value of that fiscal discipline. We benefited from economic growth. We benefited from lower mortgage payments. We benefited from greater opportunity as a consequence of Congress getting its act together, all the way through the 1980s and 1990, 1993, and in 1997. Secondly, I have great objection, as I look at especially the tax cut proposal, but also the BBA give-back proposal, that we simply haven't applied a test of fairness. That is why it was a mistake for Republicans to have a meeting with only Republicans. If you want something to be bipartisan, you have to let Democrats in the room. Likewise, Democrats can't hold a meeting and expect it to be bipartisan if we are the only ones in the room, and then go out and say: Gee, I don't understand why Senator Hatch won't sign on board. It is something he supported years ago. I don't understand why he won't support this. It is similar to something he was talking about. The answer is, he wasn't in the room. He didn't have an opportunity to voice his concern. He didn't have an opportunity to say what he liked or didn't like. What the Republicans did is they brought something that stripped out things we had agreed to, and they did not apply a test of fairness. As a consequence, I am pleased, especially connected to the loss of fiscal discipline, that in the closing days of the 106th the President has indicated he is going to veto these two pieces of legislation. I think the American people will be the beneficiaries of it. My hope is, on both of them, that it will result in bipartisan negotiation and producing something the President can sign. It can be done. We don't have to run out of here over the weekend. We know exactly what to do. It would take us about 30 minutes to put together a tax bill and a BBA give-back bill that would get 80 votes on this floor. We wouldn't have to sit and say, I wonder if the President is going to sign it. We would know he would sign it. If we have 80 votes, he is going to sign it. The last time I checked, that is still enough to override a veto. But we didn't do that. As a result, we are left here on October 27, 27 days beyond the time we were supposed to be done and home, we are left here, still a long way to go before we have an agreement, a long way to go before we will be able to say we have closed up shop and we have finished the people's business. I yield the floor.

Mr. KERREY. Yes.

Mr. KERREY. Mr. President, in yesterday's New York Times, there was a story about a young man in Poughkeepsie, NY, who used a global positioning satellite device--a little, hand-held device that tells you exactly where you are--to do something that apparently is sweeping the country; that is, to cachet something and then put a GPS label on it. Then somebody else goes out and tries to find it. It is the latest fad in the never-ending pursuit of ways to use sophisticated technologies to accomplish useless things. With great respect to the Senator from Idaho, what we have here is one more attempt to come down here and use sophisticated descriptions of the Vice President to accomplish useless things. The other day, the Senator from Nevada came down and read I don't know how many pages of statements of the Governor of Texas; things that he said were incorrect. ``Nigeria is a continent''--things like that-- and, ``I am the only candidate who knows how to put food on my family.'' It is funny. The truth is, the Vice President, in the House of Representatives, did play an instrumental role in providing the funding for the National Science Foundation, DARPA, and other sorts of things. One of the founders of Netscape the other day said Netscape wouldn't have been created--he is the guy that wrote the software at Champaign-Urbana, IL, called Mosaic that lead to the creation of the Internet. He said: I wouldn't have gotten my start, and we wouldn't have been doing our work were it not for Al Gore's work over in the House. All of these things we can argue. I have been asked repeatedly: Do you think the Governor of Texas is competent enough to be President? Does he lack intelligence? I was asked the other day on a radio show. I don't say that the Governor of Texas lacks intelligence; I do not suggest that he is incompetent; But I think it is important to examine the proposals that are on the table. The Governor of Texas says we ought to cut income taxes by $1.6 trillion. He says let the American people decide how the money is going to be spent. That is a reasonable thing to do. I don't object to letting the American people decide how they are going to spend their own money. Over the last 10 years, we have made great strides, starting with a piece of legislation that the father of the Governor of Texas supported in 1990. George Herbert Walker Bush, when he was campaigning in 1980 for the Republican nomination, described Ronald Reagan's proposals as ``voodoo economics.'' He went along with him as Vice President for 8 years, and for 2 years as President. In 1990, he said we have had enough. He signed legislation and imposed caps that we are obliterating this year. We are ignoring the caps this year. I think we are going to be $300 billion over on appropriations; the tax bill, another $250 billion against Medicare; health provisions, another $250 billion. We are about $900 billion over the caps. But the Governor of Texas is determined to do another $1.6 trillion on top of that--$1.1 trillion of payroll tax; ``voodoo economics,'' and will put at risk not just this surplus that we have but the jobs that have been created as a consequence of what his father started in 1990. That is what this campaign is about. It should not be in pursuit of what I consider to be sort of useless arguments where you find that the Vice President said something that isn't 100 percent true. So he finds something that the Governor of Texas says isn't 100 percent true. That really makes unusual candidates for office. It is a fairly common thing for us to do in the campaign. But, in my view, an awful lot is at stake here--an awful lot more than just trying to figure out who says the silliest things and the most preposterous things. The economic strategy of these two individuals is dramatically different. Their approach to problem solving is also dramatically different, and their attitudes toward many issues are dramatically different. We ought to allow the American people to distinguish one from the other. I for one am getting sort of weary from all of these attempts to demonstrate that one person lies and the other person is so stupid that they can't figure out one thing from another. It is far more important, it seems to me, for the American people to assess where it is these two individuals want to take this country, and then try to, as well, give them the opportunity to separate themselves. And they are clearly dramatically different in their approach not only to the issues but in their approach to the economy and in their approach to where they want to take the United States of America. I yield the floor and look forward to the comments of the distinguished Senator from Utah.

Mr. KERREY

Mr. KERREY. And then I will wait to speak further after the Senator finishes his opening remarks. In this morning's New York Times, there is an article describing the Texas Governor's speech in Pennsylvania yesterday. He does know how to turn a phrase. It is very good language. But I wonder if the Senator from Massachusetts sees a conflict in what the Governor of Texas is saying that he wants to do and what is in this bill. Let me read what he said: In my administration, we will ask not only what is legal but also what is right, not just what the lawyers allow but what the public deserves. He went on and said: In my administration, we will make it clear there is the controlling legal authority of conscience. Does my friend from Massachusetts think this process and this proposal meets the test that the Governor of Texas set yesterday in Pennsylvania?

Mr. KERREY. Will the Senator yield for one additional question?

Mr. KERREY. I wonder if the Senator----

Mr. KERREY. Essentially, the argument is over. Our colleagues on the other side of the aisle are agreeing with us; their Presidential candidate is wrong; we should target tax cuts. Then you move on to the next question, which is, Who is going to get the tax cut? What standards do we apply to make that decision? Would the Senator from Massachusetts agree that it seems one of the missing questions that was not asked was--it doesn't seem to me it was asked. None of our colleagues from the other side of the aisle are here. I look forward to asking them. I don't know who was in the room when this was written. But whoever was in the room from the other side of the aisle, there were no Democrats there. Does it appear to the Senator that anybody in that room asked the question: Is this fair, given the needs of this country? Is this package fair? Did they seem to apply a standard or a test of fairness as they made their decision?

Mr. KERREY. Will the Senator yield for a further question?

Mr. KERREY. One of the Presidential debates was in Massachusetts. I know the distinguished Senator attended it. I suspect he watched the other Presidential debates. One of the most important dividing lines between the two candidates is that the Governor from Texas has been saying Washington, DC should not decide who gets a tax cut and who does not. The Vice President has been saying--not only for fiscal reasons but also for reasons of fairness--that is precisely what we should do. We should decide who is going to get a tax cut and target those tax cuts rather than having across-the-board tax cuts predominantly for the wealthiest Americans. It seems to me what the Republican leadership in the House and the Senate are saying that the Vice President is right; we should target taxes and tax cuts. I wonder if the Senator from Massachusetts sees it that way.

Mr. KERREY. Will the Senator from Massachusetts yield for another question?

Mr. KERREY. This is a Small Business piece of legislation. This bill references small business. This is not a Finance Committee bill. The answer is, it is not a Finance Committee bill. Didn't the majority do the legislative equivalent of stealth molasses here? Didn't they take another piece of legislation, hollow it out, and stuff in it targeted tax cuts that their Presidential candidate has been opposing for the last 90 days, criticizing the Vice President, saying Washington, DC, should not decide, we should not be deciding in Washington, DC, who gets a tax cut? That is what I have been hearing over and over. I ask my friend from Massachusetts, first of all, is it correct that they stuffed a tax bill and they have stuffed a health care bill inside of some other bill that they hollowed out, that has not gone through the normal process, and that the tax provision itself seems to violate what their Presidential candidate wants to do? Basically, it seems to me what our friends on the other side of the aisle are saying is Vice President Gore is right; Governor Bush is wrong.

Mr. KERREY. There are an awful lot of people wondering where is the chairman of the Finance Committee, the ranking member of the Finance Committee. We are going to be taking up a tax bill and a Medicare/ Medicaid bill. Why don't we see Chairman Roth and ranking member Moynihan down here managing this bill? Why is it a Small Business Committee that has the responsibility for a piece of legislation dealing with targeted tax credits and Medicare relief?

Mr. KERREY. Mr. President, I wonder if the Senator from Massachusetts will yield for a question at the beginning?

Mr. KERREY

Mr. KERREY. Mr. President, continuing what I was talking about earlier, I would like to point out I am not sure all my colleagues understand. But in this tax bill that we are going to take up tomorrow and next week, it has one key provision. Again, this was done with House and Senate leadership getting together and trying to figure out what was put in. It is tucked away at the very end. It is a provision not listed in any summary list by the bill's backers. The provision calls for the abandonment of the pay-as-you-go budget discipline which, since its initial adoption in 1990, has required all tax cuts and spending increases be offset with other tax increases or entitlement spending cuts. This provision would order the Office of Management and Budget to set the PAYGO scorecard to zero instead of reflecting the actual cost of the tax bill in order to avoid a huge sequester the OMB would order, since the cost of the tax bill, if it became law, would come from the projected budget surplus rather than the required offsets. I understand why it is being done. I understand we cannot do it any other way. But that is why we should not do it. All the way through the 1990s when we had this PAYGO provision in there, we were able to maintain our fiscal discipline in spite of great pressure to do the contrary. Whether it was tax cuts or spending increases that were being proposed, we could maintain that discipline because every time we brought an amendment down here to the floor that spent more money or cut somebody's taxes, we had to have an offset. That is the PAYGO provision. And we are going to throw it out the window, it seems to me, and we are going to abandon a principle that has enabled us not just to balance our budget but to help produce the growth in our economy by keeping the pressure off private sector borrowing that we were competing with all the way through the 1980s. We are now paying down debt. I note Government treasuries are becoming of more and more value as they become less and less available, and because people are sensing the economy is growing a bit flat. But there is no pressure. It kept pressure off the Federal Reserve which kept interest rates low, grew our economy, and produced many of the jobs for which we all take credit. So this is a substantial change in the way we have conducted business previously. The second point I want to make, in spite of what the Governor of Texas has been saying about not targeting tax provisions, that is what this bill does. It targets tax provisions. Indeed, of the 119 targeted tax provisions--I note this amends the 1986 Tax Simplification Act. I think it is the twentieth or thirtieth time we have done that since 1986 and the principal sponsor of it, I note with great amusement, is Congressman Armey, who is also the No. 1 advocate for tax simplification and the flat tax. But of the 119 targeted tax provisions in this tax bill, only one of the provisions is included in the Bush tax proposal. This is us saying, I think appropriately, that we are going to try to target the taxes. The last thing I would say, I reiterate--I am sure our colleagues have seen and know the numbers in your own State about the number of people who do not have health insurance for all kinds of reasons. Mr. President, 94 percent of the tax benefits in the health insurance category go to subsidize people who already have insurance. Only 6 percent attempts to do what I think America has done at its finest, and that is to try to push the circle of opportunity out further and further. There is no doubt today there is a correlation between lack of health insurance and poor health status. It is most unfortunate that, if we are going to do targeted tax cuts, we do not do those targeted tax cuts in a way that increases our confidence, that as a consequence of what we are doing we will decrease the number of people in our States who currently are out there without any health insurance whatsoever. I yield the floor.

Mr. KERREY

Mr. KERREY. That will be enough.

Mr. KERREY. Mr. President, reserving the right to object, do I still have time on my 30 minutes?

Mr. KERREY

Mr. KERREY. It does seem a little pricey.

Mr. KERREY. I think they do understand it. I think they do, but the problem, it seems to me, is you have to step back from time to time and look at the work you are doing, and you have to apply other values, other standards, to it. I just don't, in this case, look at this proposal--and I am not able to reach the conclusion that I am going to target a tax cut, as the Vice President has been calling for, that somebody was in that room saying, gee, we have to make sure it is fair. It just didn't get there. I appreciate very much the Senator answering the questions I have asked of him. I look forward, in fact, to a time when we have our friends on the other side of the aisle engaging in this dialog. Maybe there is an answer here. Maybe somebody was asking the question over and over: Is this fair? I watched with great interest as the Texas Governor talked about compassionate conservatism. I wonder if my friend noticed that some of his Republican friends were saying: Hey, knock that compassion stuff off. You are sounding too much like a Democrat there, let alone acting compassionately. If you use that word too much, you might not get enough people to come out and vote for you. I understand and appreciate when my friends on the other side come and say: You want to make it fair, but we have to afford it. God bless them. Senator McCain earlier was talking about it. God bless Senator McCain for bringing that up. We have to pay attention to the need to keep the economy growing.

Mr. KERREY. I am sure my friend knows this, but one of the problems is this: Let's say you have a mom and dad both on minimum wage. That means they are probably making a $14,000 or $15,000 gross salary--maybe a bit more, maybe $16,000 or $17,000. I can't remember, but I think it is $8,000 that the minimum wage will produce. Say both are working 40 hours a week and generating $18,000 to $20,000 a year. FICA is taking a lot of taxes from them to pay the health insurance of a lot of other people. I have a claim on their income. Every Member of Congress who will get a big tax cut has a claim on their income to pay our health insurance. Did anybody in that room putting the tax proposal together say, hey, I don't think that is fair? Well, that is why you need Democrats in the room. That is why God created Democrats. We sit in the room and say, Is that fair? Sometimes we do it to a fault. That is why we need Republicans to push back and say, Can we afford it? Some of us have Republican and Democrat in us and go back and forth all the time. This isn't fair. As the Senator said, I represent low-income working families without health insurance subsidizing my health insurance. I have a claim on their income. They have no claim on mine, and I am getting a big tax cut. I just say to my friend, does that seem fair to you?

Mr. KERREY. I have one last question. I find myself saying it doesn't hurt me. I wasn't in the room. It didn't hurt me at all. As a matter of fact, because my income is over $130,000, those folks making the decision in that room helped me out. I guess I should sneak over and thank them for giving me a big tax cut. The people who get hurt are not Members of Congress who weren't in the room; they are Americans who either don't get the targeted benefit or who do get it and say, oh, my gosh, if you are going to do a tax cut, for gosh sakes, help the people who really need it. I think most Americans want our tax laws and the rest of the laws to be as fair as we possibly can make them.

Mr. KERREY. Absolutely. It would be fairer to provide full deductibility for the self-employed. The Senator from Iowa and I both represent a lot of self-employed families, many of whom are farmers, and they are increasingly going into town to get the jobs just to get health insurance. Absolutely, it would be more fair. I find most Americans want to do things in a fair way. They want us to tell them the truth about the facts. If they see the facts, they see the struggle that is going on. Again, I wonder if anybody who was sitting in this room putting this tax bill together said, hey, did you see the story that says that now a majority of households in America have both mom and dad working? Did you see the story in the newspaper that said of the 270 American corporations surveyed, 70 percent paid less than the 35 percent effective tax rate, and a large number of them didn't pay any taxes at all because they are using stock options to reduce the cost of their taxes? Did you read the story about Americans with higher incomes saying they don't want to pay any taxes so they will park their accounts down in the Bahamas and get a credit card or a debit card? Did anybody in this room say that is not fair? Maybe we should say to these folks who are down there running their accounts in the Bahamas: The next time you have a fire in your house or need the police force, or need the Navy, why don't you get the Bahamian Navy or the Bahamian police force or the Bahamian firefighters to help you out? I mean, did anybody in this room say, with all the evidence around, this isn't fair? I have to say to my friend from Iowa, it just doesn't pass the fairness test. I think Americans want our laws to be fair. They want us to write fair laws and regulations. They want us to look at society and say it needs to be the land of opportunity for everybody. There are very few Americans who would not like a tax cut. If we are going to target them, as Vice President Gore has been saying, and the Republicans are going to say, we agree, the Vice President is right; we ought to have a targeted tax credit, it seems we ought to try to apply some standard or test of fairness as we do it.

Mr. KERREY. It seems nobody was in the room to say: Hey, that doesn't seem to be fair. If you look at the average household--Nebraska and Iowa are pretty close to being the same --the average household in Nebraska pays more payroll taxes than they pay income taxes. Income credits very often don't affect them at all. One of the great paradoxes of allowing people to deduct health insurance is the higher your income, the more subsidy you get. We have an awful lot of people in Nebraska who don't have health insurance as a consequence of where they work. And when they go out and try to buy this health insurance, they don't get as much subsidy as somebody who has a higher income. As a consequence, they are not buying it. As a consequence, we now know it is fact that you are going to be less healthy if you don't have health insurance. My friend from Iowa is exactly right again. It doesn't pass the fairness test.

Mr. KERREY. I am very sympathetic to the large amount of taxes that higher income Americans are paying. They have been contributing a substantial amount to deficit reduction since President Bush signed into law an increase in their taxes in 1990 and President Clinton essentially continued that in 1993. And the Republican Congress, to their eternal credit, continued it in 1997. We have been generating a lot, and I am grateful for the income. Indeed, I understand why a group of men and women putting together this tax bill would be more sympathetic to people making over $130,000 a year. That is most of us. In fact, indeed, it is all of us. We tend to hang out with people who make more than $130,000 a year, and we complain about our taxes, too. I understand why we are sympathetic. It seems to me what was missing in all of this, what I find to be very difficult to support, now that we have decided the Vice President is correct; we should have a targeted tax cut rather than across the board, I don't think it passes the fairness test. As a consequence, the American people are going to end up, if this becomes law--and the President has indicated he is going to veto it, thank goodness, because if it did become law, they would end up having a very difficult time saying, well, yes, it cut taxes in a targeted way, as the Vice President is suggesting, but it doesn't seem to be a fair proposal.

Mr. KERREY. I don't know. I am certain we will have a chance to look at the precise numbers that CBO and others have done. As I look at the numbers right now, it seems our friends on the other side of the aisle, having put this together without Democrats there --if the American people wonder what they lost by not having Democrats there, it doesn't look as if anybody was there to say: Is this fair? What they have said is, we are going to target $4 billion a year of tax cuts to Americans who make more than $319,000 a year. A lot of my friends make more than $319,000 a year, but $4 billion total out of what appears to be about $6 or $7 billion a year seems to be a pretty big targeted tax cut for people over $300,000 a year. For Members of Congress on up, we are a little over $130,000. It is $670 million of targeted tax cuts to that group. But for the group of Americans under $40,000 a year, they get about $50 or $60 million total. I don't know. I guess many of my colleagues felt the same sort of movement of their hearts when they read the stories of the sailors who lost their lives on the U.S.S. Cole. We had a chance to read the biographies. It was a very moving thing to think about their lives. I noted that not a single one of those individuals were college graduates. They were all high school graduates. They were all enlisted, save one who was an ensign, just became an ensign after 12 years of enlistment. If you read their stories, their moms and dads are waiters; their moms and dads are nurses; their moms and dads are schoolteachers; their moms and dads are making less than $40,000 a year. That is a majority of the country. Those are the folks who are running our Little League baseball groups. Those are the people who are volunteering at church. If you decide the Vice President is right--we should not have an across-the-board tax cut; we ought to have a targeted tax cut--it seems to me that we ought to be trying to target it to those folks who are having trouble sending their kids to college, having trouble paying health care, having trouble doing all sorts of other things as well. It seems to me what was missing as they put this thing together was some Democrat raising their hand and saying: Is this fair? I wonder if the Senator from Iowa would agree with that sort of quick analysis.