Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. Will the Senator yield?

Mr. SARBANES. It is absolutely irresponsible to be doing the budget this way. I think we are going to pay the price in the years to come. I thank my very able colleague for his constant effort to try to get the Budget Committee to come to grips with these problems. We have a budget before the Senate based on projections that may never materialize. They made assumptions about growth and productivity which have been severely undercut by the report of the productivity figures in the first quarter, which failed to grow. They are assuming a growth of 2.2 percent in productivity as we project out, which is a very unusual growth. Now all of a sudden, we have a first quarter figure that was negative. Imagine what that will do to the surplus projections. We are running the risk, by this excessive tax cut, that we will not pay down the debt at the rate we could have done. We won't invest in a number of important programs for the future strength of the country-- education, the environment, health care. All will be undercut. There is no money here for education because instead, we give an excessive tax cut. It will knock the economy off track, and we will lose this magnificent opportunity we had to move forward in a reasonable, sensible, and constructive way. I thank the Senator for his leadership. I regret this document before the Senate. I urge my colleagues to vote against it. I yield the floor. Exhibit 1 [From the New York Times, May 5, 2001] More Missing Pages (By Paul Krugman) It was, if you believe the official story, a case of farce majeure: House Republican leaders had to call off Thursday's planned vote on the budget resolution because two pages that were supposed to be in the document were accidentally omitted. Strangely, the two missing pages happened to contain language crucial to the compromise that had persuaded moderates to agree to the budget. Just as strangely, the budget resolution contained only a 4 percent increase in spending--the amount George W. Bush originally wanted, not the 5 percent he had agreed to. Whatever really happened, the fundamental cause of the mishap was that the Republican leadership was trying to pull a fast one--to rush through a huge tax cut before anyone had a chance to look at the details. Now the case of the missing pages has delayed things for a few days. So may I suggest that Congress--and Senate moderates in particular--check carefully around that Xerox machine? You see, there seem to be a few other pages missing from the budget plan. For starters, we seem to be missing the page that factors in the likely cost of a missile defense system. (The page that explains how missile defense will work in the first place is missing from some other document.) Nobody knows how much this system will cost, but few think it will come in under $100 billion. We also seem to be missing the page that explains how the conventional defense buildup being planned by Secretary of Defense Donald Rumsfeld--reports suggest an extra $25 billion per year on weapons systems alone, that is, $250 billion or more over the next decade--is consistent with a budget that makes no room for increases in defense spending beyond those already proposed by the Clinton administration. Then there's the page about prescription drug coverage under Medicare--a solemn pledge by Mr. Bush during the campaign. Everyone in Congress agrees that the $115 billion allotted by the administration is laughably inadequate, that a realistic program would cost hundreds of billions more. But the extra money doesn't seem to be in the budget plan; maybe the missing page explains the discrepancy. Somewhere near the page on prescription drug coverage we might find an explanation of the administration's position on the Medicare hospital insurance surplus--$400 billion that both parties have promised to put in a ``lockbox,'' but which the administration plans to devote to other uses. Presumably there's a missing page that explains why this isn't a naked plan to raid Medicare to pay for tax cuts. Then there's the puzzle of how the administration plans to maintain government services in the face of a growing population while increasing spending no faster than inflation. Either some unspecified drastic cuts are planned or the spending numbers are at least $400 billion too small. I'm sure there's a page somewhere that explains what's going on. Not all the missing pages involve spending. Everyone familiar with the issue knows that the Bush tax cut will cause a crisis involving the Alternative Minimum Tax, causing the much-hated tax to apply to tens of millions of additional taxpayers. The inevitable fix will reduce revenue by at least $300 billion, but there doesn't seem to be any allowance for that revenue loss in the budget. I guess there must be a missing page that explains why. Finally, there's the page on Social Security reform. Because Social Security has been run on a pay-as-you-go basis, with each generation's taxes financing the previous generation's retirement, the system has a huge ``implicit debt''--the money promised to people whose past contributions were used to support their elders. If Mr. Bush wants to partially privatize the system, he must pay off some of that implicit debt; to make his campaign proposal work would require infusing more than a trillion dollars into the Social Security system. But that money isn't in his budget plan. There must be a missing page with some explanation of the omission. Oh, and there's one more page missing: the one that explains why moderates should support a tax cut that, while slightly smaller than Mr. Bush wanted, is still irresponsibly large--and why they should put their names to a budget resolution that is patently, shamelessly dishonest.

Mr. SARBANES. Imagine that. It is incredible to come out with a fiscal program for the country with all these missing pages and vanished pieces. This conference report, which provides for this excessive tax cut, is premised on a projected surplus, two-thirds of which is in the last 5 years of the 10-year-period. And now we discover that there is no money for education, and the defense figure will rise by who knows how much? Clearly, it will rise. It will be slugged into this budget. We don't even provide for inflation, let alone a growing population, and there is no allowance for the alternative minimum tax fix. I ask my friend from North Dakota, given all these missing pages, won't this budget plan eat into the Medicare trust fund and the Social Security trust fund? I don't see any other way. Once all the pieces are put into place, are we not going to be eating into the trust funds?

Mr. SARBANES. That $300 billion is not allowed for in the budget?

Mr. SARBANES. I am told that, while there is some adjustment for inflation in this budget, there is no adjustment for a growing population and the additional stress and strain that places on program levels; is that correct? There is no adjustment for population growth, which we know will happen?

Mr. SARBANES. What does this budget do about education? We are voting on education this week, the President says we will not leave any child behind, and everyone is making terrific speeches about education and beating on their chests about education. But to do a lot of these programs, we need resources. What does the budget do on education?

Mr. SARBANES. I yield him 2 minutes out of my time.

Mr. SARBANES. Mr. President, I rise in very strong opposition to the conference report pending before us. Unfortunately, this budget falls far short of the mark in almost every respect. We had just a brief meeting of the conference committee in which the Democrats participated. We were excluded from everything else that took place. I said then that I thought we were at a crossroads in considering this budget; that I thought we had a historic opportunity before us if we made wise decisions, and that I was fearful we were going to lose that opportunity. This conference report bears out that fear. If we pass this misguided budget, I have no doubt that in a few years we will all be put in mind of the words of John Greenleaf Whittier, who wrote: For of all sad words of tongue or pen, The saddest are these: ``It might have been.'' We are throwing away a magnificent opportunity to develop a sane, rational fiscal policy for the Nation which will help to deal with a whole series of problems. We have this unparalleled opportunity to pay down the Nation's debt, to invest in our Nation's future, and to shore up vital programs. If we act prudently, we can ensure that the Federal Government will have the resources in the future to meet our obligations after the baby boomers retire and beyond. We can do a reasonable tax cut in response to the problems confronting working families all across the Nation, and we can do this all in a very balanced way. Instead, because of this excessive zeal for a massive tax cut, we risk knocking our economy off track and sending ourselves back into the deficit ditch from which we have only recently emerged. The budget outlined in this conference report would squander our best chance for investing in America's future, lifting the debt burden off the next generation, and providing a reasonable tax cut for our working families. We are constantly told these revenues are the people's money. Of course they are the people's money. From where else does it come? But the debt is the people's debt. The challenge of educating our children is the people's challenge. Providing Social Security and Medicare for our seniors is the people's challenge. It all flows from the people. That sort of bumper-sticker comment does not come to grips with the real problems. There are other bumper-sticker comments we can make. Every time they say, ``Well, the tax money is the people's money,'' we can say, ``The debt is the people's debt,'' and on and on. One cannot use a bumper-sticker slogan as a substitute for tough analysis and a real calculation of what serves the Nation's interest. I commend the ranking member of the Budget Committee, the very distinguished Senator from North Dakota, for his terrific leadership through this budget process. I know how frustrating it was. He continually implored the chairman of the committee to work together to deal with these difficult problems. The Budget Committee, the only committee in the Senate that is uniquely focused on the Federal budget, never held a markup. It never held a markup. Thus, the committee was prevented from fulfilling its primary duty of developing a responsible Federal budget. That is what the committee is there for. It was not allowed to do its job. The budget resolution was debated for the first time in this Chamber before we had even seen the President's detailed budget submission. Of course, others have spoken about how the conference functioned. We were clearly closed out of the conference. In fact, the chairman, at the one meeting they had, said there was going to be a meeting over the weekend. I said: ``Mr. Chairman, I didn't quite catch that; when will the meeting be and where,'' preparing myself, of course, to attend the meeting the chairman indicated we were going to have over the weekend. He was very blunt in his response. He said: ``You all are not going to be at the meeting. This is not a meeting for you. This is all going to be done by the Republican side.'' I regret that. I thought the ranking member of the House Budget Committee, Congressman Spratt of South Carolina, a very able Member, made a very eloquent statement about how the product of the conference would be better if it went through a proper conference deliberation. We at least would have had the opportunity to get the benefit of thinking on both sides. That was really brought home when the House last week had to suspend its consideration of the budget because they left a couple of pages out of the budget document. So much for handling it all on one side. Surely if there had been a consultative process, it would have been pointed out that these pages were missing. But instead, they tried to rush this through, staying in until a wee hour in the morning trying to pass this thing, and all of a sudden they discovered two essential pages were missing out of the budget document. That led Paul Krugman in the New York Times to write an article which I enjoyed called ``More Missing Pages.'' I ask unanimous consent this article be printed in the Record at the end of my comments.

Mr. SARBANES. There is a subheading called ``The Farce is With Us.'' It was, if you believe the official story, a case of farce majeure: House Republican leaders had to call off Thursday's planned vote on the budget resolution because two pages that were supposed to be in the document were accidentally omitted. . . . Whatever really happened, the fundamental cause of the mishap was that the Republican leadership was trying to pull a fast one--to rush through a huge tax cut before anyone had a chance to look at the details. Krugman, in this column, goes on to talk about, in effect, other missing pages in the budget document. Now we have had a little chance to look at the details, and I want to ask the ranking member, my good friend from North Dakota, a couple of questions. First, on defense, am I correct in understanding that the way this document is drawn, there is a blank check for a defense figure that will be filled in later? Is there a defense number coming later that will simply be slugged into the budget?

Mr. SARBANES. Mr. President, because I know he has a pressing commitment, I yield 2 minutes to the Senator from Delaware.

Mr. SARBANES. Defense is a missing piece; education is a missing piece. And this tax cut will create a problem, as I understand it, with the alternative minimum tax. I am told that there is no provision in this budget for alternative minimum tax reform, and that such reform may cost as much as $300 billion over the 10-year-period; is that correct?

Mr. SARBANES. Mr. President, will the Senator yield?

Mr. SARBANES. I thought when I was named as a conferee I would have important work to do as a member of the conference committee on the budget. As it turned out, there was nothing to do. We went to one meeting. The chairman told us there was nothing for us to do. He said, you are dismissed, you can leave now. Don't bother to come around again. It was an incredible way to do business--an incredible way not to do business, to put it more accurately.

Mr. SARBANES

Mr. SARBANES. Mr. President, I commend very strongly Senator Enzi, who was chairman of the relevant subcommittee in the last Congress and chairman of the International Trade and Finance Committee, and Senator Johnson, who is the ranking member of that subcommittee, for their extraordinary work in developing this legislation. They worked tirelessly both in the last Congress and again in this Congress to help bring us to this point. I commend Senator Gramm and the staff of all Senators and the committee staff for their strong efforts to develop a bipartisan consensus on this legislation. Senator Hagel and Senator Bayh, who have taken over these positions now in the new Congress on the subcommittee, also made constructive contributions in moving this legislation forward this year. Let me say this about the legislation. It generally tracks the authority provided the President under the Export Administration Act, which expired in 1990, as I indicated earlier. But a significant effort was made with the excellent assistance of the legislative counsel's office to delineate these authorities in a more clear and straightforward manner. We made a very strong effort to inject an element of clarity and directness into the statute which would make it easier for the executive branch agencies to administer the statute and for the exporters to comply with it. The bill makes a number of significant improvements to the EAA. It provides, for the first time, a statutory basis for the resolution of interagency disputes over export license applications. The intent is to provide an orderly process for the timely resolution of disputes while allowing all interested agencies a full opportunity to express their views. This is very important. There is an orderly process now by which disputes can be moved up the ladder in order to be resolved. So any concern that any department or agency of the Government has as they work through this interagency process can be heard and dealt with and resolved, and, if necessary, at the final level, be resolved at the Presidential level. This orderly process was an issue of great concern to the administration, to the national security community, and to industry. I think we have reached a reasonable resolution of the issue in this bill. This was an issue on which Senator Enzi and Senator Johnson spent countless hours in order to try to work out arrangements that would be acceptable to all. As I have indicated, now they are acceptable to the agencies and the departments of the executive branch across the board. Not one department or agency is coming in now and telling us they think this is not a workable system under which they can operate. The bill significantly increases both criminal and civil penalties for violations of the Export Administration Act, reflecting the seriousness of such violations. The bill provides new authority to the President to determine that a good has mass market status in the United States and should therefore be decontrolled. This gets at this issue of, well, you can go out and buy a store on the market. Why are we controlling this good? But the bill retains authority for the President to set aside a mass market determination if he determines it would constitute a serious threat to national security and that continued export controls would be likely to advance the national security interests of the United States. So we retain an ultimate authority in the President with respect to this matter. At the particular urging of Senator Enzi, the bill contains a provision that would require the President to establish a system of tiers to which countries would be assigned based on their perceived threat to U.S. national security. The intent of this provision is to provide exporters a clear guide as to the licensing requirements of an export of a particular item to a particular country. The bill would also require that any foreign company that declined a U.S. request for a postshipment verification of an export would be denied licenses for future exports. The President would have authority to deny licenses to affiliates of the company and to the country in which the company is located as well. You get a sense of the reach of some of these provisions in providing important protections for national security concerns. We also included a provision in the committee to make a number of technical corrections and incorporate the suggestions made by the administration. The bill contains a provision from the expired EAA relating to the imposition of export controls on crime control and detection instruments that inadvertently had not been included in the bill as introduced. So, to close, let me just again underscore that this is a very carefully crafted piece of legislation. It is a very balanced piece of work. I believe that the Senate, when it finally is able to get to the substance of the bill, will provide broad support for it, just as it had broad support in the committee. Again, I underscore that though it is asserted now that the protections are inadequate for national security and foreign policy, that runs so counter to the situation in which we find ourselves. If you compare what is in this bill with the existing arrangements, or with the previous arrangements under the EAA, this bill has done a good job of providing clarity and providing process of procedure of the arrangements to be followed, which gives to the exporters more definition and more certainty in how they can proceed, what the rules of the road are, while at the same time retaining for the administration, ultimately for the President, very significant powers in controlling exports. As I indicated, it establishes tough new criminal and civil penalties for export control violations. It strengthens our ability to control critical technologies by building a higher fence around the truly sensitive items. That is very important. One of the things we are trying to accomplish is a focus on the truly sensitive items. It grants the President special control authorities for cases involving national security, international obligations, and international terrorism. It promotes discipline in licensing decisions by codifying the role of national security agencies in the licensing process and then streamlining licensing procedures, and it encourages U.S. participation in strong multilateral export control regimes. We have a short timeframe to deal with this legislation this year, given that the short-term extension of the EAA expires this summer in August. We need to put in place a permanent statutory framework for the imposition of export controls. I believe this legislation is that framework. I strongly urge my colleagues to support the effort to move to this legislation and subsequently to enact it. Mr. President, I yield the floor. Exhibit 1 Remarks by the President in Meeting With High-Tech Leaders, March 28, 2001 The President. Thanks for coming. I appreciate that warm welcome. And welcome to the people's house. It's a nice place to live. (Laughter.) And I'm glad I'm living here. . . . As well, I've got some good news and you may have been watching the Senate Banking Committee. But after a lot of work with industry leaders and the administration and members of the Senate, the Export Administration Act--a good bill--passed the Banking Committee 19-1. The technology that you all have helped develop obviously gives us an incredible military advantage, and that's going to be important. And it's an advantage, by the way, that we tend--want to develop, to make sure we can keep the peace, not just tomorrow, but 30 years from now. We've got to safeguard our advantages, but we've got to do so in ways that are relevant to today's technology, not that of 20 years ago. The existing export controls forbid the sales abroad of computers with more than a certain amount of computing power. With computing power doubling every 18 months, these controls had the shelf life of sliced bread. They don't work. So in working with the Senate, we're working to tighten the control of sensitive technology products with unique military applications, and to give our industry an equal chance in world markets. And I believe we've got a good bill. It's a bill that I heard from you all during the course of the campaign. The principles we discussed are now a part of this bill. I want to thank Senator Phil Gramm for his hard work in working with us and industry and some members of the Senate to make sure the bill that has been crafted is a good bill. And I urge the Senate to pass it quickly.

Mr. SARBANES. Mr. President, a major effort was made by the committee to work through the list of proposals by the administration. Those proposals were incorporated into the bill during the Banking Committee's markup. I thought the administration's recommendations were a balanced set of proposals. I believe they strengthen the overall bill. Subsequent to that and subsequent to the committee reporting the bill out, the President in remarks to high-tech leaders at the White House on March 28 urged quick passage of this bill by the Senate. In that appearance at the White House--and I will quote briefly from the President's--actually, he started off by saying to this group: Thanks for coming. I appreciate that warm welcome. And welcome to the people's house. It's a nice place to live. And I'm glad I'm living here. That is the President talking. He went on and said to the high-tech group: I've got some good news and you may have been watching the Senate Banking Committee. But after a lot of work with industry leaders and the administration and members of the Senate, the Export Administration Act--a good bill--passed the Banking Committee 19-1. He then goes on to say that ``this has been crafted as a good bill. And I urge the Senate to pass it quickly.'' Mr. President, I ask unanimous consent that these remarks of the President in a meeting with high-tech leaders be printed in the Record at the conclusion of my remark.

Mr. SARBANES. Mr. President, what is the parliamentary situation?

Mr. SARBANES. I thank the Chair. Mr. President, I urge the Senate to adopt the motion to proceed and give itself the opportunity to move to the substantive consideration of S. 149, the Export Administration Act of 2001. The adoption of this motion to proceed would enable Senators, then, to consider the bill on its merits, to offer amendments, if they have them, to alter or change the bill in whatever direction they think is desirable. I think this is important legislation. I am frank to say I think this bill before us is well crafted and deserves the support of the Senate. But in any event, whatever your attitude on that question is, I certainly think this issue, and this legislation dealing with this issue, deserves to be considered by the Senate. I very much hope, after we have had this opportunity for some discussion, we will be able to move ahead and consider the bill on its merits. I understand it is the leadership's intention to file a cloture motion--the leadership, as I understand it, on both sides of the aisle--in order to enable us to go to this legislation. I hope that will not be necessary. I think there is a compelling argument for taking up this bill and addressing this issue. Let me say a few words about the bill itself. Earlier this year, I was pleased to join with my colleagues, Senator Enzi, Senator Johnson, and Senator Gramm, in introducing this legislation. It was reported out of the Banking Committee on a bipartisan vote of 19-1, so there was a very strong majority within the committee. That was on March 22 that we met and marked up the bill and reported it to the floor of the Senate. The Export Administration Act provides the President authority to control exports for reasons of national security and foreign policy. I think there is a strong national interest in Congress reauthorizing the Export Administration Act. If we do not do that by August, there will be no Export Administration Act. And, in fact, we are now working under a temporary extension of the Export Administration Act, passed in the last Congress, which will expire in August. Before we passed that temporary extension, we were dealing under the International Economic Emergency Powers Act. Let me be very clear about this because it is very important. We need to understand what the situation has been and what the situation will be if we do not act on this legislation. The Export Administration Act has not been reauthorized since 1990, except for temporary extensions in 1993, 1994, and last year. In other words, for most of the past decade we have been operating without an Export Administration Act. We are now in the framework of a temporary extension that expires on August 20 of this year. Without these temporary extensions--in other words, for over this past decade--the authority of the President to impose export controls has been exercised pursuant to the International Economic Emergency Powers Act--the so-called IEEPA. In my view, it is highly desirable for the Congress to put in place a permanent statutory framework for the imposition of export controls. That is what this bill will do. That underscores the importance of considering this legislation. Export controls should not be imposed pursuant to the emergency economic authority of the President. One example of the reason for depending on IEEPA is that penalties that may be imposed under export controls under IEEPA are significantly less than those imposed by this legislation. In other words, reliance on IEEPA and the President's extraordinary authority under that legislation still leaves us falling short in terms of the penalties for violations of export controls for what this legislation provides. It is ironic that this bill is being in effect contested on these national security grounds when in fact it does more to protect the national security concerns than the existing IEEPA scheme. The IEEPA scheme is also weak in the sense we are quite worried that it will be subject to a court challenge, which in effect would make the limited penalties that it contains inapplicable. I think that has to be kept very much in mind as we consider taking up this legislation. This legislation has been worked over very carefully. I think it represents a carefully balanced effort to provide the President authority to control exports for reasons of national security and foreign policy while at the same time responding to the need of U.S. exporters to compete in the global marketplace. We have two major objectives we are trying to harmonize. I think this legislation does it in a balanced way. In preparation for acting on this legislation, the Banking Committee held two hearings in this Congress. We held a number of hearings in previous Congresses and two hearings with representatives of industry groups and foreign and Defense Department officials. Extensive consultation took place with representatives of the current administration, including representatives of the Defense Department, the State Department, the intelligence agencies, the Commerce Department, and the National Security Council. Prior to the markup of the legislation in the Banking Committee, Condoleezza Rice, Assistant to the President for National Security Affairs, sent a letter to the committee. I will quote it because I think it is important. I will quote it actually in full. The Assistant to the President for National Security Affairs in a letter to the chairman of our committee stated: The Administration has carefully reviewed the current version of S. 149, the Export Administration Act of 2001, which provides authority for controlling exports of dual-use goods and technologies. As a result of its review, the Administration has proposed a number of changes to S. 149. Actually a number of colleagues were involved in urging the administration to seek such changes, including colleagues I see on the floor now and who remain, I take it, concerned about this legislation. To go back to the letter: The Secretary of State, Secretary of Defense, Secretary of Commerce, and I agree that these changes will strengthen the President's national security and foreign policy authorities to control dual-use exports in a balanced manner, which will permit U.S. companies to compete more effectively in the global market place. With these changes, S. 149 represents a positive step towards the reform of the U.S. export control system supported by the President. If the Committee incorporates these changes into S. 149, the Administration will support the bill. We will continue to work with the Congress to ensure that our national security needs are incorporated into a rational export control regime.

Mr. SARBANES. There are examples that happened under the previous regime. This bill will actually improve the regime.

Mr. SARBANES. Would the Senator do that for us?

Mr. SARBANES. I don't understand.

Mr. SARBANES. If the Senator will yield, the legislation specifically gives the President the authority to continue to control any item. I don't think the items the Senator is listing would be mass market items under this legislation. But even if one or a few were to be sold classified, the President has the authority under this legislation to deny that category and to continue to control the item.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise in opposition to the budget resolution currently pending before the Senate. In my view, this budget squanders the extraordinary opportunities before us and moves the country in the wrong direction. As we work to craft a budgetary plan to carry us through the first decade of the 21st century, we would do well not to repeat the mistakes of the last century, mistakes which could send us back into the deficit ditch from which we so recently emerged. In the early days of the Reagan administration, Congress complied with the President's request for a large tax cut. The Nation felt the negative effects of that tax cut for more than a decade, as Federal deficits grew and the national debt exploded. These were not good economic times for the country. I am proud to have been a part of the effort in 1993 that helped to turn things around. Working together, the President and Congressional Democrats crafted a package that finally brought the Federal deficit under control. By making difficult but critical decisions to cut Federal programs and raise revenues, we tamed the deficits that plagued the Nation throughout the 1980s. Most Republicans argued at the time that this responsible package would ruin the economy and send markets tumbling. They were dead wrong. Thanks to the approach we adopted in 1993, the Nation enjoyed a remarkable period of economic prosperity. This disciplined fiscal policy gave the Federal Reserve room to run an accommodating monetary policy that allowed the economy to sustain the longest expansion in U.S. history. The economic expansion brought unemployment down to 4 percent, helped turn budget deficits into surpluses, and produced an expansion in investment that led to rising levels of productivity, which in turn kept inflation at very low levels. It was a remarkable achievement. Although the economy is now slowing somewhat, I do not believe we should embark on a dramatic shift in our fiscal policy. Doing so would only jeopardize the gains we have made thus far. Instead, we must continue to pursue a balanced approach that combines debt reduction, a short-term tax cut benefitting working people, and spending on urgent national needs. The budget resolution before us takes exactly the opposite approach. It is unbalanced, proposing to cut taxes by more than $1.6 trillion--or close to $2.2 trillion when associated interest costs are included. I am deeply concerned that if we pass this resolution, we will be repeating the mistake we made in 1981 and squandering the fiscal security we have worked so hard to achieve. Before I consider the substance of the budget resolution in detail, I would like to take a moment to comment on the process. Our consideration of this budget resolution is unusual even unprecedented-- in two important ways. First, we have not had a mark-up in the Budget Committee; instead, we are debating the budget for the first time here on the Senate floor. Second, we are debating the budget resolution without the President's detailed budget submission. I am proud to be a member of the Senate Budget Committee, the only Committee in the Senate that is uniquely focused on the Federal budget. This year, the Budget Committee has held a series of informative hearings on issues such as tax policy, debt management, Medicare reform, defense, and the impact of future demographic changes on our economic outlook. However, the task before the Committee is not simply to hold hearings, but rather to use the perspective and knowledge gained from those hearings to develop a responsible Federal budget. Chairman Domenici's unprecedented failure to hold a markup has prevented us from fulfilling the committee's primary duty. Even more troubling is the fact that we have not yet received the President's detailed budget submission. We have only the vague outlines, and will not receive the specifics until next week. It defies logic to vote on a budget resolution before we have seen the budget. It is impossible to debate the merits of the President's proposed spending cuts when we have not been told which programs will be cut. Nor can we have an informed debate on the President's tax cut proposals, because the Joint Tax Committee has not been given enough detail about those proposals to estimate their true cost. Nonetheless, the Republican leadership has chosen to move forward with their budget resolution. Let me turn now to the substance of their proposals. First, I think it is important to understand that this budget resolution is based on very uncertain long-term projections. The limitations inherent in economic projections are clearly illustrated by recent experience: just 6 years ago, in January 1995, the Congressional Budget Office projected that we would finish the year 2000 with a $342 billion deficit. Instead, we saw a surplus of $236 billion--a swing of $578 billion. In fact, most of the projected surplus over the next 10 years is expected to occur in the outyears, when projections are the most uncertain: almost 65 percent of the unified surplus and almost 70 percent of the non-Social Security surplus are projected to occur in 2007-2011, the last 5 years of the projection period. I believe it would be unwise to commit these uncertain surpluses to large, permanent tax cuts, as the Republican budget does. Moreover, the tax cuts proposed by the Republicans disproportionately benefit the wealthiest among us, and leave few resources for meeting important national priorities. I strongly believe that any surplus realized in the near future should be seen as an opportunity to pay down the Nation's debt, invest in our Nation's future, and shore up vital programs. I am deeply concerned that the budget resolution before us fails to take advantage of an unprecedented opportunity to ensure that the Federal Government will meet its obligations after the baby boomers retire and beyond. This budget would endanger our hard-won progress and shortchange national priorities that the American people want to see addressed. The budget does not ensure that Social Security and Medicare funds will be safeguarded to pay current obligations, but instead allows these funds to be diverted for other purposes. The budget devotes insufficient funds for a Medicare prescription drug benefit. Deep cuts would be required in a variety of crucial programs. Let me highlight some of the ways in which this budget fails to meet America's urgent priorities. We are facing a number of critical infrastructure needs. For example, EPA estimates that some 218 million Americans still live within 10 miles of a polluted body of water--a river, lake, beach or estuary. Nearly 300,000 miles of rivers and streams and approximately 5 million acres of lakes still do not meet state water quality goals. National treasures like the Chesapeake Bay and Great Lakes still face significant water quality problems from municipal discharges of nutrients and other pollutants. Thousands of communities across the country have separate sanitary sewers or combined sewers which experience overflows under certain conditions, sending raw sewage into nearby waters, posing significant public health and environmental risks. Published studies have estimated that contaminated drinking water is responsible for nearly 7 million cases of waterborne diseases and approximately 1,200 deaths in the U.S. each year. In February, the Water Infrastructure Network (WIN), a coalition of local elected officials, drinking and wastewater service providers, contractors, unions, and environmental groups, released a report which identified a need for a $57 billion Federal investment to replace aging and failing drinking water, sewer, and stormwater infrastructure over the next 5 years. The report found a gap of $23 billion per year between infrastructure needs and current spending. Similar assessments by EPA and others have also estimated water treatment and drinking water needs in the hundreds of billions of dollars. If we are to provide clean and safe water for everyone in America, we need to invest in upgrading and maintaining our wastewater and drinking water systems. The budget resolution fails to address these needs. The budget resolution also fails to address what I consider one of America's most vital priorities--ensuring that all Americans live in decent, safe, and affordable housing. Even as the Nation has achieved record levels of homeownership, we are facing a shortfall of affordable rental housing that is reaching crisis proportions. According to HUD, nearly 5 million American families, despite years of economic growth, job growth, and income growth, continue to suffer from what are called ``worst case'' housing needs. This means that they pay over half their income in rent. Take a minute to imagine that. If you were paying half your income in rent, what would you do if your child fell ill and you had an unexpected medical bill? What would you do if your car broke down and needed to be repaired? What would you do if energy prices skyrocketed, forcing you to pay more to heat your home? You'd be forced into a hobson's choice that could result in your losing your job or your home. A more expansive study by the Center for Housing Policy shows that millions more American families, including 3 million working households, suffer from the same critical housing need. Yet, the budget resolution follows the proposals made by the President to cut the federal housing budget by a total of $1.3 billion, or 5 percent below the freeze level. When you take inflation into account, the cut is really about 8 percent, or $2.2 billion. Specifically, the President proposed that 25 percent of the public housing capital fund be eliminated. This proposal is made in the face of documented capital needs in excess of $20 billion, a backlog that has been confirmed by independent studies. In 1998, we worked on a bipartisan basis to reform the public housing program. We passed a strong bill that greatly increased local flexibility, and asked housing authorities to be more creative in seeking out new sources of capital to meet their capital needs. Many housing authorities have done just this, working with Wall Street to sell bonds backed by capital account appropriations. The success of this whole endeavor is now put in doubt because of the proposed cuts. The Republican budget also cuts CDBG by over $400 million, eliminates HUD's small, but important rural housing program, and unnecessarily constrains state and local governments in their use of HOME funds. In addition, the budget inexplicably terminates the Public Housing Drug Elimination Program (PHDEP), arguing that, somehow, evictions solve the problem. PHDEP funds are used to provide tutoring to children; they help provide effective alternatives to keeping kids off the streets, out of gangs, and away from trouble. These funds pay for increased security and increased police presence. They are an integral part of the effort to keep drugs out of public housing. It is preventive medicine, and it is an investment that pays back well in excess of its cost. These are only a few of the many examples one could cite to show that the budget resolution we are considering today does not invest in America's future, but instead turns us back toward the past. The Democrats have proposed a responsible budget alternative which balances the need for debt reduction, targeted tax cuts, and investment in critical national needs. The Democratic alternative fully protects the Social Security and Medicare surpluses to ensure that we will be able to meet our obligations to America's seniors, now and in the future. The alternative provides for a meaningful, affordable, and universal prescription drug benefit, and devotes real resources to meeting pressing needs in education, defense, and our national infrastructure. For example, the alternative restores the cuts proposed by the President for the Corps of Engineers civil works program. A safe, reliable, and economically efficient water infrastructure system is vital to our Nation's economic well being and quality of life, and I am proud to say that the Democratic alternative recognizes the importance of the Corps' civil works program. The alternative recognizes the importance of funding our international affairs account, which includes both State Department operating expenses and foreign operations. At a time when the need for U.S. global leadership is greater than ever, I am pleased to say that the Democratic alternative does not shrink from funding these responsibilities. In the area of housing, the Democratic alternative makes sure that public housing authorities can continue to maintain and upgrade their developments. In fact, not only does it maintain capital levels, but it adds $200 million per year to the operating subsidy, so that public housing agencies, who house our poorest, most vulnerable citizens, can pay their rising energy bills. In fact, the Democratic alternative restores all the cuts in housing included in the President's blueprint, including restoring the PHDEP program, and all the activities it supports. In addition, it adds another $2 billion over 10 years to get the federal government back in the business of financing the construction of affordable housing through the HOME program, which is a proven, effective delivery system. In addition, the Democratic alternative ensures funding for some less visible, but no less vital programs. We would fund the Assistance to Firefighters Grant Program, run by the Federal Emergency Management Agency, at the full authorized level, ensuring that our nation's first responders have the resources they need to safeguard America's citizens from the dangers of fire. The Democratic alternative supports liveable communities by funding mass transit programs, environmental protection efforts, and law enforcement programs. These may not be high-profile issues, but they address very real needs felt by many Americans--needs which are not addressed by the Republican budget before us. We have come far economically and must be very careful as we move forward so as not to return to the deficits which hampered our economic growth for so long. In my view, we must emphasize paying down the national debt, protecting Social Security and Medicare, increasing spending for programs important to our Nation's future, and providing short-term tax cuts for working Americans. The Republican budget falls far short of the mark in almost every respect. I strongly oppose this resolution, and I urge my colleagues to reject it.

Mr. SARBANES

Mr. SARBANES. It seems to me what Senator Byrd is underscoring is that the Senate, when they first passed the Budget Act, made a great exception to the process of unlimited debate in order to try to bring the deficit under control. The guiding rationale for making that exception was limited to accomplishing deficit reduction. No one, in their wildest dreams, ever imagined we were going to be out here trying to deal with reconciliation instructions which would lower the surplus or potentially increase the deficit.

Mr. SARBANES. Does the Senator disagree with the initial purpose of the Budget Act?

Mr. SARBANES. I hope all of our colleagues were listening very carefully to Senator Byrd as he made that very powerful statement about the Senate as an institution. The reconciliation process, this great exception to Senate rules, was allowed and adopted in order to bring down the deficit. It has been twisted all out of shape. This amendment proposes to use it for a purpose that is not relevant to reducing the deficit. They talk about taxes going up, taxes going down--the end objective is supposed to be reducing the deficit. That is absent in this situation. Reconciliation is now being used, in effect, for any purpose whatsoever. I very much hope the Senate will reject this amendment. I thank Senator Byrd for a very powerful statement. I also want to commend the very able Senator from North Dakota for his leadership on the budget. As he has often said, it is a matter of balance. It is a matter of prudence. It is a matter of restraint. We can do a tax cut to help working people, we can strengthen Social Security and Medicare, we can pay down the national debt, and we can invest in the future of our country, in education, in health, in environment, in infrastructure. All of this can be done if we use prudence and caution. But we cannot do it if we go to excess. That was demonstrated yesterday when we adopted an important education amendment. But in order to do it, we had to bring down the amount of the tax proposal. What matters is how you blend these priorities together. What balance do you achieve? The Senator from North Dakota, in my judgment, has done an extraordinary job of laying out an approach which encompasses these multiple goals, reconciles them, and moves the Nation forward. That is what we ought to be doing. That would not give away our fiscal responsibility. Under that approach, we would not do a huge tax cut based on 10-year surplus projections, 70 percent of which appear only in the last 5 years of the 10-year period. No one in their private or business life would engage in that kind of reliance on tenuous projections. We ought not to do it on the floor of the Senate. I thank the Senator from North Dakota for the tremendous leadership he has provided and the vision he has outlined of a balanced program that will encompass tax reduction, protect Social Security and Medicare, pay down the debt, and invest in the future of our country.