Don Nickles

Mr. NICKLES

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. Mr. President, I am happy to debate my colleague, or any colleague, on the budget. We spent several days debating the budget. I am more than happy to debate it. I will tell my colleague that we basically have assumed a freeze in nondefense, non-homeland security in the budget resolution. I hope we will be able to enforce that freeze. I have been very vigilant in trying to enforce the budget. We have made about 80 points of order to contain the growth of spending, most all of which have been sustained. There were very few votes by our colleagues on the Democrat side, with the exception of Senator Miller, and I thank him and compliment him for that. Since we were successful in sustaining those budget points of order, we have saved Federal spending to the tune of in excess of over $1.3 trillion. I happen to have these votes, and I happen to have a chart that shows the votes, just like this vote. CBO scores this vote-- if this amendment were to be adopted--saying it would increase spending by $300 billion. It basically doubles VA. I hope we will be successful. That will be scored on the running chart I am keeping. I mentioned over $100 billion of additional spending. We defeated that in the last month using budget points of order. I hope we will defeat this amendment, and it will save $300 billion- plus and I think make us a lot more responsive. I happen to believe we are making a serious mistake to put everything into that side of the equation. I mentioned discretionary spending of $821 billion, which is our budget figure. We are going to be spending $2.4 trillion. Two-thirds of the budget is now entitlements. One-third is discretionary spending. I believe we would have a better control, better oversight if we would keep more in the discretionary side. This is the opposite of that effort. I yield the floor.

Mr. NICKLES. I would have to look at the figures. The baseline scored by OMB was 521. The baseline scored by CBO was 477. The figure we had before us in the budget resolution, I would want to check. CBO is in the process of revising that. We use CBO scoring. My guess is it would be significantly less than the 521 by OMB, and 477 by CBO, and we now expect, if we stay with the projections--i.e., the spending figures that we had assumed in the budget resolution, 821 on discretionary spending--the debts would probably be in the neighborhood of not 477 but closer to 420, in spite of the fact that I know my friend from Delaware made a speech last week saying he thought it would be 600. It would be closer to 420.

Mr. NICKLES. I am happy to yield.

Mr. NICKLES. Mr. President, I want to make a couple comments on one of the pending amendments, the so-called Daschle amendment dealing with veterans. In many cases, this amendment is more about helping politicians than it is helping veterans. We have done a lot to help veterans--we being the Members of this body, Members of this Congress. I want to go to the facts. Just look at history. In 1993, we were spending less than $15 billion. If you look throughout the next several years, the year 2000, it still increased only to about $17 billion, $18 billion. Since then, in the last 4 years, we have gone up from about $18 billion to now we are about $28.5 billion. So we have had a dramatic increase in the last few years, frankly, in large part due to President Bush's requests. Those are the facts. If you want to gauge our support for veterans on how much money we are spending, we see a relatively flat, very slow growth during the Clinton years and a very rapid increase under President Bush's last 3 years. Now we have an amendment that says, we know this is discretionary, as it always has been. Appropriators take care of discretionary items. As alluded to by Senator Bond, we have had big increases because we had some demands, and the appropriators and budgeteers met those demands. Now we have an amendment that says: Let's throw that away, an amendment that will increase spending by $300 billion. It also increases the deficit by $300 billion. Some of the people who say they are in favor of this say they believe in pay-go. They make speeches: We want pay-go. But they don't pay for this amendment. So this amendment would increase the deficit by $300 billion. Then I look at the way it is written, and it is one of the worst amendments, as far as putting something together from a fiscal standpoint, that I have ever seen. It says: Let's take the 2004 discretionary figure and freeze it; for the next 10 years we will freeze it. Then we will set up a new entitlement, not based on the number of veterans receiving care but on the number of people who are eligible to receive care. On the eligibility side, we will come up with some type of per capita contribution and figure it all out. CBO estimates over 10 years it will cost $300 billion. We are spending a little less than $30 billion a year right now, but we are going to multiply that based on the number of people who might be eligible. Senator Warner is eligible but my guess is he doesn't receive all of his health care in a veterans hospital. My father-in-law is eligible but he doesn't receive his health care under veterans. A lot of people in the military served with great distinction but they don't receive their health care through the VA health care system. I don't know who designed this new formula. This kind of amendment belongs on the budget, not on a DOD authorization bill. This is really amending the budget, saying we are going to take a discretionary item and turn it into a mandatory item, and we have decided to grab some kind of fictitious name based on the number of people eligible, not the people who are in the system, not the people who are likely to receive the care, and pluck it out of the air and say: Here is what we are going to do. And then it also says GAO, after a couple of years, if they don't like it and think it is enough, we will set some other kind of process on automatic pilot to have Congress vote on it in the next 10 days or so. It is just a ridiculous way to fund a department or to take care of veterans. I am all in favor of taking care of veterans. Senator Warner alluded to the fact that we have done a lot for veterans in the last few years. You bet we have. Last year, concurrent receipts--I believe there was an amendment agreed to, and the ultimate cost was $22 billion. Senator Warner agreed to an amendment last week to expand that almost another billion dollars. We did TRICARE for life. We did Service Members Group Life Insurance. We did expanded benefits for former POWs, auto and housing grants, and veterans buying first homes. We increased the VA home loan guarantee up to a maximum mortgage of $240,000. We did the Montgomery GI bill to assist transitioning from military to civilian, and we enacted a 52-percent increase in education benefits. I can go on and on. We have done a lot. It is expensive. So this line will continue to increase. Then I look at this amendment. It doesn't really say anything about need. It comes up with a very awkward formula, almost like an HMO-type thing, and says, by the number of eligibles, we are going to figure out so much money and multiply it and throw it in. That will not meet veterans needs. In the appropriations process, we have committees that have hearings. What do you need? What is pressing? We vote and appropriate money. We have had a faster rate of increase in veterans care than in almost any other area in the Federal budget. The amendment we have pending before us has a budget point of order, and appropriately so. It would increase the deficit by $300 billion over and above the budget. Maybe some people don't care about deficits. This Senator does. This amendment is not paid for. It violates pay-go. For those people who voted for pay-go, they should say this is not paid for. They make speeches in their States and say, I believe we should have pay-go. This doesn't meet that test. At the appropriate time, I will make a budget point of order, and I hope our colleagues will sustain that. I might also note that I am keeping a record of all the budget points of order that have been made and the number of people who vote to waive those points of order. Since last year's budget was adopted, we have had amendments to increase spending and increase the debt by over $1.4 trillion. This amendment will just be a couple hundred billion dollars on top of that. We are keeping a running log. In the last month, there was an amendment to make IDEA an entitlement. We made a budget point of order and defeated that. That would have increased the debt by $87 billion. A week or so before that, there was an amendment to expand retroactively unemployment compensation that would have increased the deficit by $9 billion. We defeated that. A week before that, there was an amendment on trade adjustment assistance, and it would have cost an additional $6 billion. None of these amendments were paid for, and we defeated them. So in the last month, I think we have had three votes that would have increased spending--i.e., the deficit--by over $100 billion. The amendment we will be voting on will increase the deficit by a couple hundred billion dollars. Again, I hope my colleagues will show a little sanity and say, let's try to really help veterans, let's not try to help politicians. Let's sustain the budget point of order on this amendment. I yield the floor.

Mr. NICKLES. Mr. President, I enjoyed having a little colloquy with my very good friend, Senator Biden. I just want to put in the Record a couple of facts. One, the deficit under the budget resolution we had estimated is $474 billion. I believe it will come in significantly less than that, possibly $420 billion to $440 billion. I am not sure. The budget resolution was for 2005, and that figure is $367 billion, considerably less than what OMB was estimating this year at $521 billion or CBO at $477 billion. So the budget resolution shows over $100 billion in deficit reduction by 2005, and also $255 billion in 2006. So it goes down by over $100 billion in over 2 years. That cannot be done unless there is some constraint on the growth of spending. That being said, we had significant assumptions for growth in VA. Total spending in 2004 for VA was growing from $61.45 billion in budget authority to $70.8 billion, about a 15-percent increase just in 2004 to 2005 in VA. Now, that is a lot, especially when one assumes or if one knows that we are basically going with a freeze in nondefense spending. That means other things have to be cut to make room for veterans. We have done that in our budget, and we have shown probably a greater percentage increase in veterans care than almost any other section of the budget. So I wanted to state for the record, when I heard my friend saying-- last week I think he said it was $600 billion, and I said I think it is going to be more like $420 billion. In the budget resolution for 2004, we estimated $474 billion. I believe it will be much less than that. For 2005, we were assuming $367 billion. I hope it will be less than that. For 2006, it will be $255 billion, with revenues coming in now greater than anticipated because the economy is working and because the tax cuts we passed did stimulate the economy. The stock market and the NASDAQ are up 40 or 50 percent since the tax bill we passed last year and the tax cuts. I heard my colleague say it is because we want tax cuts for the wealthy. The only tax cuts we assumed in the budget resolution were extending what I call family friendly tax cuts: the tax credit per child staying at $1,000 per child instead of going to $700; marriage penalty relief, so married couples who have taxable income up to $58,000 will pay a 15-percent rate instead of a 25- percent rate; and an expansion of the 10-percent bracket. Those are all family friendly. A lot of veterans want those tax cuts, too. There are a lot of allusions to, we really need higher taxes so we can spend more for veterans. Veterans want these tax cuts. A lot of veterans have children. A lot of veterans are married and want to eliminate the marriage penalty, at least if they have incomes up to $58,000. That is where the bulk of the tax cuts we are trying to pass this year are. That is what we assumed in the budget. So I wanted to make those few points. We hope to get the deficit down. I believe if we pass the budget, or if we adhere to the discipline we recommended in the budget, we will have the deficit down by over $100 billion. We will not if we adopt amendments that call for this program to double or another program to double and call it all an entitlement. That is a great way to have runaway spending. This amendment is very irresponsible, and I would urge my colleagues to vote to sustain the budget point of order. I yield the floor, and I suggest the absence of a quorum.

Mr. NICKLES. I am not sure. I think the Senator from Delaware has the floor. I don't want him stating----

Mr. NICKLES. That would be fine.

Mr. NICKLES

Mr. NICKLES. Yes.

Mr. NICKLES. To clarify, this is a Senate bill, and it will stay that when it goes to conference.

Mr. NICKLES. Mr. President, I compliment my friend and colleague, Senator Grassley, for his remarks. I join in those remarks. I compliment him for his leadership as chairman of the Finance Committee. Under his leadership of the Finance Committee, we have passed two very significant tax cuts: The tax cut in 2001, and we accelerated or completed that tax cut in 2003. As a result of those tax cuts, the economy is growing. As a result of the tax cuts, the maximum tax rate is 35 percent. Again, this has made a difference. The economy is growing. Senator Grassley mentioned there have been over 1 million jobs created in the last few months. He is correct. The stock market has rebounded substantially--the stock market is up 25 percent, if you are looking at the Dow Jones; 40 percent, if you are looking at the NASDAQ--from the time we took up that bill last year. Some people want to undo that. They say: We want to pay for the war; we don't want to add more debt to our children and grandchildren. I appreciate that, but what about other spending? This is $25 billion. They say: We will increase the rate 1 percent on the upper income people to pay for that. Let me just look at a couple of other facts. As recently as May 12, 3 or 4 weeks ago, we had an amendment on the floor of the Senate that was voted on that would have increased spending $86 billion. It wasn't paid for. We made a budget point of order against it. We defeated it, I think, by one vote. But no one was saying: We want to increase taxes to pay for that. I guess on this one, you would have to increase the maximum rate by 3 or 4 points to pay for it. On the same day there was a motion to increase spending by $9 billion. We defeated that with a budget point of order; again, I believe, by one vote. That was $9 billion. On May 4, there was another spending increase. This was trade adjustment assistance, $5 billion. We defeated that by a vote or two. Many of the people who are saying they want to pay for this $25 billion, they want to pay for the war, they didn't want to pay for this additional spending or they didn't offer that. So I find it interesting, for the ones who are acting as if, in many cases, they want to balance the budget, I have a total of about 68 votes where budget points of order were made, and in most cases, mostly Democrats-- with the exception of my very good friend, Zell Miller from Georgia-- voted to waive the budget every time. In other words, they voted for more spending. The three amendments I just alluded to in May of last year were over $100 billion of new spending. So there are lots of attempts to increase spending over and above what we are doing anyway, mostly by our colleagues on the other side of the aisle. That is one of the points I wanted to make. Let me echo a couple of other things my friend from Iowa said. Why would you want to have an individual rate higher than corporations? I used to be in manufacturing. I used to have my own business. Why should an individual be taxed more than Exxon? The corporate rate is 35 percent. There is an effort to make manufacturers at 32 percent. Yet we are going to tell self-employed people, S corp people, that they should pay 36 percent. That doesn't make a lot of sense. There is one other comment. This happens to be about the Constitution. Are people trying to kill this bill? You put this on this bill and the House is going to, what we call, blue-slip it. It is going to stop the bill. Why? Because there is something called the Constitution. The Constitution says in article I of the Constitution, section 7: All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills. It says all revenue measures, all tax measures have to originate in the House of Representatives. This is the U.S. Senate. So if we do that, the tradition is, the House will say: Thank you very much, but we are not going to let you preempt our constitutional prerogative. So they blue-slip it. In other words, they kill the bill. This is a Department of Defense authorization bill. I have great respect for Senator Warner and Senator Levin, but they are not supposed to rewrite the tax bill. That is for the Finance Committee. That is under the jurisdiction and leadership of Senators Grassley and Baucus. Tax amendments don't belong on this bill. Maybe it sounds good rhetorically: We will just ask the upper 1 percent. I think that is bad policy: We want the upper 1 percent to pay for the war. Nobody else has to pay for it, just the upper 1 percent. That doesn't make sense. We don't do that for education. We don't do that for other spending. I don't think it makes sense. I happen to think the income-tax code is already so progressive, the upper 5 percent pay over half; the upper 1 percent pay over 20 percent. Yet some people want to make it more and more progressive. It wasn't too long ago we were celebrating Ronald Reagan's legacy and his great contributions to this country and the free world during his term of office. At the conclusion of his term of office, the maximum tax rate was 28 percent. I know under President Clinton it went all the way up to 39.6. That is a pretty significant increase. Now we have it at 35 percent. Yet some people say: Let's make it more progressive. I guess you could take this same amendment and put it on every one of these spending amendments. And I haven't totaled it. It is about $1.4 trillion worth of additional spending that most of our colleagues on the Democratic side of the aisle have proposed, and we have stopped using budget points of order. For those who ask, Do we need budget points of order? Yes, we do. They have been effective in curtailing the growth of spending. I said $1.4 billion, but it is actually $1.2 trillion, not since the budget was adopted last year. Real money, a lot of money. I think the figure is well over $140 billion just in 2004 or 2005 alone. Constitutionally, those of us who have the pleasure of serving this great body, the Senate, stand before the President of the Senate and put our hand--most of us--on the Bible and swear allegiance to the Constitution of the United States. The Constitution of the United States says all revenue measures shall originate in the House. If you don't like that, try to amend the Constitution. That is in the Constitution. We have over 200 years of history and tradition of the Senate of following the Constitution. All revenue measures shall originate in the House. So to try to circumvent that and say we are going to stick a little tax bill into a Defense authorization bill is not the way the Senate is supposed to work. It hasn't worked that way. I have only been here 24 years, which is not quite as long as my colleague from Delaware. But the Senate doesn't originate tax bills. It hasn't for hundreds of years, and it should not today. I ask my colleagues to, at the appropriate time, vote against the amendment by our friend and colleague from Delaware. I yield the floor.

Mr. NICKLES. Will the Senator yield for a clarification?

Mr. NICKLES. For my colleague's information, we have not yet passed the JOBS bill. What we are going to do is take a House bill, strike that House bill, and insert that bill into an H.R. So it will be a House revenue measure before it goes to conference. We have not gone to conference. The bill before us is a Senate bill. There is a difference.

Mr. NICKLES

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

Mr. NICKLES. Mr. President, I rise today to pay tribute to a man who meant a great deal to me and a great deal to my State and to our country. That, of course, is President Ronald Reagan. It is with sadness that he has recently passed away. But I have great confidence he has passed away and moved on to a better home. I express my condolences and sympathies to his family and also thank them for their generosity in sharing Ronald Reagan with us in the public life, both as Governor of the great State of California, and also as President of the United States for eight wonderful years. I had the privilege, in the same year as Ronald Reagan was elected President, to be elected to the Senate. I have many fond memories of Ronald Reagan. I remember very well during his Inaugural Address when the rumors were coming out, and then later confirmed, that the American citizens who were held hostage in Iran for 444 days were released. I remember the euphoria that came across the stage. I remember the euphoria that came across America. It was such an exciting, positive change. Americans really felt great. This was suppressing our country, the very fact that we had American citizens held hostage for over a year, in many cases being beaten or tortured or abused, with American flags burning in Tehran continually. It was such a great day when they were released. I happen to think it was because, in many respects, the leadership of Iran decided they did not want to worry about this new President, Ronald Reagan, and what actions he might take. I think they made a very good decision. I was very pleased they did so. I was very euphoric at the time and probably could not have been much more excited at that time. When we were sworn in, there were 18 new Senators elected in 1980 and sworn in early in 1981. Of the 18, 16 were Republicans. The leadership of the Senate changed for the first time, I believe, since 1954. So we had new committee chairmen; we had new leadership. Howard Baker assumed the responsibility and role as majority leader and did an outstanding job. The Senate was a great place to work and to serve, and to work with a President as generous, as humorous, and with such strong leadership as Ronald Reagan. I look at the economy that Ronald Reagan inherited, and I see great accomplishments. A lot of people do not remember that in 1980 the inflation rate was 13.5 percent and it fell to 4.8 percent by 1989. The interest rate in 1980 was 15.27 percent and fell to 10.87 percent by 1989. Actually, the interest rate had risen to 18.87 percent in 1981. I remember that now. Interest rates were at 18 and 19 percent. The unemployment rate in 1980 was over 7 percent. In 1981 it reached 7.6 percent but by 1989 it was down to 5.3 percent. So we had record high inflation rates, record high interest rates, and maybe not record high but very high unemployment rates. We inherited an economy that was going nowhere fast. It was going in the wrong direction. You could not afford to build a home. You could not afford to expand your business. It was a very difficult time. Ronald Reagan came in with such great enthusiasm, such an optimist. He did not say, ``let's moan about it,'' but ``let's do something about it.'' He had an economic game plan for which we fought, and we passed in the House and the Senate. These were remarkable accomplishments when I think about it. He actually was responsible for pushing Congress, Democrats and Republicans, to pass enormous changes in the Tax Code. I happened to enjoy working on taxes, and during his 8 years he actually moved the maximum tax rate from 70 percent to 28 percent. That is a phenomenal accomplishment. Phenomenal. And he was able to do it with a bipartisan majority. It was not a strictly partisan House and Senate. As a matter of fact, the House was always controlled by the Democrats. ``Tip'' O'Neill, who was the Democrat leader, the House Speaker at the time, was opposed. So we had big confrontations, political confrontations, big battles over the tax cuts, and over the budgets. Yet they passed them. Even though we had big battles, we had a certain dignity and respect in large part because of Ronald Reagan. And because of his affection for individuals, Democrats and Republicans, even political adversaries who would have political battles still had a collegial, working relationship. They respected each other and respected individuals regardless of their political philosophy. As a result, he was able to enact enormous changes in the Tax Code and budgets, and increase defense. Ronald Reagan came in with an agenda, and he largely accomplished those objectives. The result has been economic freedom in this country. He was not satisfied, frankly, with just expanding and improving the economic lot of Americans. He wanted to improve the economic lot and the freedom of people throughout the world. Ronald Reagan was the leader of the free world, and he spoke eloquently and often and encouraged freedom through the world and countless countries that have been oppressed or suppressed through Communist leadership. Ronald Reagan was speaking to them. He would go right over the leaders of Congress. If he wanted to get something done budget-wise, tax-wise, or defense-wise, and if Congress was not listening, he would go to the American people. And when he would travel internationally he would go over the leadership of those countries and speak to their people with great success. We all remember his speech when he was in Berlin, the speech that says: ``Mr. Gorbachev, tear down this wall.'' The favorite picture of all my memorabilia that I have in my home is a picture of me standing before the Berlin Wall, and behind it somebody spray-painted on the wall: ``When this wall falls, the rest will, too.'' And they did. The Berlin Wall did fall, and I think it was in large part because of Ronald Reagan's leadership. When that wall fell, other countries that had been suppressed and under the reins of the Iron Curtain of communism began speaking up, exercising their rights, and demanding freedom and obtaining it. Ronald Reagan was the leader in winning the fight in the cold war. As Mr. Gorbachev said, probably no one else in the world could have done it, but Ronald Reagan did it. And he was able to do it with Mr. Gorbachev. Many times they were political adversaries in negotiating arms control treaties and so on. Yet they still became friends as only Ronald Reagan could do. He could become friends with his adversaries and eventually that kind of friendship and bond would lead to arms control reduction, would lead to a significant reduction in nuclear weapons, would lead to agreements with our NATO allies and other countries to expand freedom. Ronald Reagan, probably more than any individual since Churchill or Roosevelt, was responsible for expanding freedom throughout the world. I compliment him for his great contributions in doing so. He became somewhat of a role model for many of us. I was elected with this group in 1980. Many of us called ourselves Reaganites and considered ourselves part of the soldiers in the field trying to get an agenda done to expand freedom. I am proud to have been part of that. I am proud to have had the opportunity to serve with such a great individual. I remember many times going down to the White House, talking issues. I remember Ronald Reagan almost always having humor, almost always not caring who got the credit as long as we accomplished our objective. I remember many times he let other people wrestle with the details, but he knew where he wanted to go. He knew the course he was trying to direct our ship of state, and he managed it very well. I have a lot of fond memories. I remember Ronald Reagan coming in to campaign for me in 1986. We had him visit Norman, Oklahoma, the University of Oklahoma, Lloyd Noble Arena. We packed the place. It was more than packed. The fire marshal had to turn down people who could not get in. We had thousands and thousands of people. I told President Reagan: This is Reagan country. They love you here. You don't need to make a prepared speech. You can say whatever you want. They will applaud. They love you here. There was a nice, big sign: ``This is Reagan country.'' Very positive. The entire rally speech could not have gone better from my standpoint. There were thousands and thousands of people. It was great. Ronald Reagan concluded his speech. He said: ``That is why we need Don Rickles in the Senate.'' And I thought: Did he really say that? I told him to wing it, and he did. I have had that honor of being able to call myself Don Rickles for a long time. But Ronald Reagan leaves a legacy. He leaves a legacy of decency. He leaves a legacy of integrity. I think he helped restore so much pride in America. He was a true patriot, a patriot who loved this country from the very inner core of his being. And it was contagious. It was contagious through the fact that not only did he love America, but he made Americans feel better about our country. He made other people envy us to some extent. They wanted to be like us. They wanted to be free. What does America have that we don't have? They have freedom, optimism. And that freedom would be economic freedom, personal freedom, and political freedom. Ronald Reagan wanted to expand it all for all people. He believed everybody--even if they lived in China or Russia or North Korea or El Salvador--if people were trying to take that freedom away, he was freedom's friend. He carried that banner very well. He helped people learn to love and respect the United States. I can honestly say I have the greatest admiration and respect for Ronald Reagan. I loved Ronald Reagan. He has moved this country forward in a way that I think all of us can be very proud. Again, I express my condolences and sympathy to Nancy Reagan and to the family. Nancy Reagan was one great First Lady. The love and affection she showed toward her husband throughout not only his Presidency and governorship but, frankly, throughout the last 10 years is more than commendable, and it is the kind of role model that, frankly, we expect from Nancy Reagan. She is a first-class First Lady, a first-class lady for all of us. Again, my condolences and sympathy to her. And I thank her and her family for allowing us to share Ronald Reagan for many years as the leader of our country. He has made this country and, frankly, this world a much better place to live. Mr. President, I yield the floor.

Mr. NICKLES

Mr. NICKLES. Madam President, I compliment my colleague, Senator Miller from Georgia, for his statement, but also for his courage last year in not only supporting this package but cosponsoring this package with me. Every once in a while we do something in Congress that makes a difference. Last year, Senator Miller helped pass a budget that enabled the Senate to pass a tax bill. The tax bill we passed we called the economic growth package 2003. It did a lot of things. It accelerated some tax cuts that were already passed in 2001 that were being phased in very slowly. We accelerated those. We made the maximum tax rate 35 percent. It accelerated tax changes for families, moved tax credits for children from $700 to $1,000. It gave marriage penalty relief. It meant married couples would pay 15 percent on taxable income up to $58,000. It expanded the 10- percent tax bracket. It cut capital gains tax rate from 20 percent to 15 percent. It cut the tax rate on corporate dividends. We tax the distribution of dividends from corporations higher in the United States than any other country in the world. It cut that tax by more than half. It cut it from ordinary rates to 15 percent. It would not have happened if it were not for Senator Miller. He cosponsored the bill. He made it possible. By passing a budget, we passed a bill. We passed it with the Vice President breaking a tie. The net result is we have had economic growth, very significant economic growth as a result of that tax bill, as a result of the budget we passed last year. The proof is in the pudding. We have now seen the results. Both sides, Democrats and Republicans, said, We need to do something to stimulate the economy. We did. We passed the package. The President signed it a little over a year ago, May 28 of last year. Now we can look at the results. The results are outstanding. So we ought to acknowledge it. We have had the most rapid expansion of gross domestic product in 20 years. The last 4 quarters averaged 4-point-some-odd percent: 3 percent, 8 percent, 4.1 percent, 4.5 percent--the highest in 20 years. That has happened since we passed our package a little over a year ago. The results in the stock market have been dramatic. The Dow Jones industrial average, when we introduced this bill, I believe it was in February of last year, was less than 8,000. It is over 10,000 now--an increase of 27 percent from when we introduced the President's budget and introduced his bill. That is dramatic. I remember telling my colleagues, if we eliminate double taxation on dividends, we might have a Dow Jones industrial average above 10,000. That is the way we passed it in the Senate, but the way it came back from conference, we said the tax on dividends would be 15 percent. That is a big improvement over ordinary tax. Corporations have to pay 35 percent on their corporate profits. Then we pay individual tax of 15 percent. But as a result, we now have a Dow Jones industrial average that has risen 27 percent. The NASDAQ is actually up even more than that. It surged from about 1350 in March to today almost 2000. That is a 47-percent increase since February. That is very significant. That means the market cap has increased by trillions of dollars. People ask, what does that mean? It means the value in your 401(k) funds has risen from $11 trillion to over 15 some trillion, an increase of about $4.5 trillion. That is phenomenal growth, that is phenomenal wealth creation, due in large part to the tax bill we passed last year because we tax corporate profits differently, because we allowed corporations to have a bonus depreciation up to 50 percent. We made tax changes and there are consequences to those changes we made, positive changes. There are positive changes on employment and the unemployment rate. The unemployment rate has declined dramatically from over 6.3 percent in June of last year. Keep in mind, we introduced this bill in February when the unemployment rate was about 5.9 percent. It went all the way up to 6.4 percent. And now, today, we are looking at an unemployment rate of about 5.6 percent--a very significant reduction in the unemployment rate. So that is positive. Payroll growth has increased dramatically. That is usually a lagging indicator. The stock market moved up earlier, and now payrolls are starting to increase, with over 1.1 million jobs in the last 8 months alone. You can see the growth trend is very positive. We had a decline in jobs for some time. We were experiencing significant job losses. We said: We need to do something to stimulate the economy. We did. We introduced the tax cut bill in February. We passed the bill in late May. Now you can see it is really starting to take off. We have had very significant job growth as a result of that. Even in manufacturing--if you look at the trend in manufacturing over the last 40 years, it has been on a decline. Because of some of the changes we implemented--primarily the bonus depreciation, and, again, a change in the way we tax dividend distribution--you are now seeing investments in manufacturing plants and facilities. Investments are up in manufacturing, and investments in companies, dramatically. Now we are seeing growth in manufacturing output, which has been significant. We have had very significant manufacturing output. We are also seeing, for the first time in a long time, actual growth in manufacturing employment. I used to be a manufacturer. That is good news. That is reversing a trend that has been on the books and, frankly, in progress for a long time. The point I am making is a year ago we passed a bill. The bill was a big change in tax policy, a big change I think that has had very positive economic results. Senator Miller said: Well, there is one thing we should do. This bill was passed, and it was passed under reconciliation, which means, by law or definition, it had to be for a set period of time. It sunsets. We need to make it permanent. We want these growth trends to continue. We want the growth in the number of jobs to continue. We want to see manufacturing continue to increase. We want to see GDP continue to increase. Some people have said: Well, no, we want to take away some of those tax cuts. We want to take away some of the tax cuts for the upper 1 or 2 percent. I will tell you, that will not work. I was one of the architects of that plan. I was the principal sponsor, with Senator Miller, to cut taxes on capital gains and dividends. If you try to do that and say, ``We will leave the rate at 15 percent for everybody in America except for the upper 1 or 2 percent,'' that will not work. To tell everybody in America, ``Your capital gains rate is going to be 15 percent, unless you make over $200,000, and your rate is going to be 25 percent higher,'' that is a real disincentive. Or to tell corporations, ``We are going to tax proceeds on corporate dividends at 15 percent, and, oh, if you have income over $200,000, we are going to tax yours at 35 percent''--and under some proposals it would be much higher than that; they want to increase maximum rates maybe well beyond 39.6 percent--that is distorted, and it will undermine the whole idea of saying: Wait a minute; let's not tax corporate dividends twice. If you tax some corporate dividends at 39.6 percent on the corporate side, and have a corporate rate of 35 percent on top of it, you are taxing corporate dividend distributions of 75 percent plus, and you are discouraging people from making investments in corporations and distributing those proceeds to their owners. Therefore, it would be very counterproductive. So those who are making those recommendations have not thought them through. I do not think they will work. Or if they did work, it would be very counterproductive, and you would see GDP declining; you would see jobs declining, and you would see a very stalled or stagnated economy. I think we can be proud of the fact we passed the tax bill last year. The President signed it, and it has had a positive impact. Those are the facts, just the facts. I compliment my colleagues, and particularly Senator Miller, who made it happen. Madam President, I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise in opposition to the amendment offered by my friend Senator Graham of South Carolina, the so-called TRICARE amendment offered by himself and Senator Daschle. I have great respect for both Senator Graham and Senator Daschle. I just oppose their amendment. The amendment is very expensive. Their amendment costs billions and billions of dollars. Their amendment, in my opinion, is a serious mistake. I can see where people would say: I want to vote for it. I want to show my support for the National Guard. I also want to show my support for the National Guard, but we do show our support for the National Guard in this bill. We take care of their health care. If they go on active duty, we take care of their health care. That is a Government expense. They don't have copays. We take care of them. In fact, when they sign up and go into active duty, we take care of them. But this is when they are on inactive status, when they basically show up for 2 days a month. I used to be in the Guard. I also used to be in the private sector. I was in the private sector during the month, for 28 or 29 days of the month, and then in the National Guard for 2 days of the month. I think the primary responsibility for health care should be on the employer for the 28 or 29 days of the month, not on the Government because somebody served for 2 days in a month. Incidentally, if you are on Guard duty and you are injured, they are going to take care of you. If you are climbing hills, or practicing at a gun-firing range, and you are injured, you will be taken care of. If you are on 2-week duty during the summer and you have an injury, they are going to take care of that. Those expenses are covered. So, basically, do we want to take care of an individual who happens to be in the Guard or Reserve and pay for their health care throughout the year for thousands of dollars? TRICARE costs $7,000 or $8,000 for a family. Should that be the Federal Government's responsibility if an individual is serving only 2 days a month? Under the pending amendment, it would be the Federal Government's responsibility. Eighty-some percent of Guard and Reserve members have health care. So this would be a great motivation for people who may be in the private sector to say: Since you are in the Guard or Reserve, we don't have to pay for you. Thank you very much, the Government will pay for yours-- even though you work for this company or this organization for 28 days a month and you work for the Government 2 days a month. Why should the Federal Government pick up 100 percent of that cost? Then when you have the transfer from the private sector health care coverage to the public, wow, it gets expensive. The cost was already mentioned. I think CBO estimated it at almost--I have one cost at $696 million for 2005, and $5.7 billion for 5 years, and $14.2 billion over 10 years. So it adds to the bill. It either adds to the deficit or it crowds out other defense spending. That other defense spending might be replacement munitions or body armor or new technology for night vision--who knows. It is saying we want to take care of these individuals' health care even when they are in inactive status. That is a mistake. Senator Warner's bill takes care of them when they are activated. They are given physicals. We pay 100 percent of it. We take care of our Active-Duty men and women. If they are activated, we should take care of them. I believe Senator Warner's bill takes care of them for several months after Active-Duty status. To say we want a new Federal entitlement saying if you sign up for the Guard or Reserve, we are going to pay up to 72 percent of an individual and their family's health care cost, at a cost estimated to be $7,700 in benefits under the TRICARE program, with individuals paying 28 percent, this gets real expensive. It spends billions and billions of dollars. It would be transferring money. This money has to be appropriated. Defense is only going to get so much money. I am afraid we will be crowding out some of the money needed to protect our men and women in the field. We protect our men and women in the field who are on active duty. We give them the best quality health care we can. They don't have to pay anything. I don't believe the Federal Government should pay for an individual and/or their families' health care cost for a month because they do 2 days a month of Guard duty. I think it is a serious mistake, especially when the private sector already provides it for over 80 percent of those individuals. You may be able to score political points, but this is not money well spent. We should use our money to maximize our defense capabilities. This will spend a lot of money, saying let's have the Federal Government pay for the health care cost of Guard and Reserves, instead of having the private sector pay for it, even though they work for the private sector 90 percent of the time during that month. I don't think we can afford it. I urge my colleagues to vote in opposition to the so-called TRICARE amendment at 3:45. I yield the floor.

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. Is there any job in the Federal Government where an individual would work 2 days a month and receive $7,000 or $5,000 worth of benefits in health care?

Mr. NICKLES. Will the Senator yield for additional question?

Mr. NICKLES. If somebody is activated and they go to Afghanistan or Iraq, don't they receive full health care costs without paying the 28 percent?

Mr. NICKLES

Mr. NICKLES. I appreciate the leadership of my colleague from Mississippi in this effort, and agree that the funds should remain dedicated to the rapid development of effective countermeasures against emerging threats.

Mr. NICKLES

Mr. NICKLES. We have 10.

Mr. NICKLES. Mr. President, I am happy to speak, but I don't believe the Senator from Washington has made her speech. Usually I would respond to her.

Mr. NICKLES. I rise in opposition to the amendment of my friend Senator Cantwell for a lot of reasons. This is not a simple extension, as Senator Ensign earlier said. This is an expansion. Yet despite the fact we have good economic news, despite the fact we had a report last month, 288,000 new jobs, before that, 300,000--700,000 jobs in the last 2 months--we want to not only extend temporary Federal unemployment compensation, we want an expansion. Change the definition. I started looking at the amendment. I thought it was not very well drafted. It does a number of things. It is retroactive back to January. It expands benefits, and then it goes retroactive. Let us say somebody is unemployed in January and February, but they get a good job in March. They would qualify for 8 weeks or maybe 10 weeks of benefits. Are we going to write them a check even though they have had a job for the last month or so? We have never done that. What would that be if you were in the State of Massachusetts? It would be as much as $760 a week. For 10 weeks, that is $7,600--a lump sum, even though you may have a job that is paying over $80,000 a year. That doesn't make sense. But it would be legal. It would actually happen, and it would cost Federal taxpayers probably in excess of $1 billion if that happened. That makes no sense whatsoever. But that is in the amendment. The amendment also, as Senator Ensign explained, basically says for the high unemployment States we are going to change things so more States will qualify for high unemployment benefits. In other words, we are going to expand this program. Why? Because most of the States don't qualify for it because States that do qualify for the high unemployment Federal benefit have to have increasing unemployment. And, frankly, we don't have that. We have decreasing unemployment, including the State of Washington, in which I believe the unemployment rate is 6.1 percent. You have declining unemployment in almost every State. The trend is down. The trend is for more employment. We should be grateful for that. Some people evidently want this program to be a permanent Federal program. But it is a Federal temporary program that has expired. I am looking at the statistics we have used in the past. We discontinued this program for a couple of years when we had it in the early 1990s. We discontinued that program when the unemployment rate was 6.6 percent. Now the rate is down to 5.6 percent. We were well below the rates when we discontinued this program in 1994. When we had a Federal temporary program in the early 1980s, we discontinued the program when the rate was 7.4 percent. In the mid- 1970s--1975-1977--we discontinued the program when it was 6.8 percent. Now the rate is 5.6 percent, and we are saying let's discontinue it. Some people say let's continue it for everybody. It makes no sense let's not only extend it, but let's expand it. That is in this amendment. Finally, this amendment is not paid for. I am amused by the number of people who say, Yes, we want deficit reduction. We want pay-go, and 51 Senators voted for pay-go. Senator Feingold had an amendment to the Budget Resolution. I didn't support it. This is going to make it tough on taxes and people do not pay enough attention to it on spending. I hear all these people: No, we want pay-go. We had an amendment last week on trade adjustment assistance. Of the 51 Members who supported the pay-go amendment to the Budget Resolution on the floor, only 3 voted to sustain the pay-go point of order I made on the floor--only 3--and 48 Members reversed themselves. In other words, they said we don't want pay-go when it comes to creating or expanding a new program like trade adjustment assistance. Senator Grassley had a bill last week, the Family Opportunity Act. It passed. A pay-go point of order could have been applied to this. A pay- go point of order will be applied, and I am going to make that pay-go point of order on this amendment. I have tried to get cost estimates on this amendment. OMB estimates Senator Cantwell's amendment costs $9.5 billion, and CBO estimates $9 billion. I don't have a letter from them because it is hard to compute how much this retroactive provision is going to cost. But I think it is fair to say it is a $9 billion program that is not paid for. At the appropriate point, I will be making a budget pay-go point of order that this amendment, if it became law, would increase the deficit over the next 10 years by $9 billion. I urge my colleagues to vote against it. The economic news is good news. There are almost 1 million new jobs this year. I think there are almost 900,000 new jobs in 2004 alone. There has been some positive, good news on the employment front. The unemployment rate is down. When I was in the manufacturing business, if the unemployment rate was around 5 percent, it was almost full employment. I could hardly find people to work. Now the unemployment rate is 5.6 percent. It is going down. That is good news. We don't need to reach back and extend the program that has already been going, I believe, for about 36 months at a cost of $32 billion. I think it would be a mistake. At the appropriate point, I will be making a budget point of order and urge my colleagues to vote to sustain that point of order. I reserve the remainder of our time.