[Congressional Record Volume 153, Number 50 (Thursday, March 22, 2007)]
[Senate]
[Pages S3547-S3603]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                                  2008

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of S. Con. Res. 21, which the clerk 
will report.
  The legislative clerk read as follows:

       A concurrent resolution (S. Con. Res. 21) setting forth the 
     congressional budget for

[[Page S3548]]

     the United States Government for fiscal year 2008 and 
     including the appropriate budgetary levels for fiscal years 
     2007 and 2009 through 2012.

  Pending:

       DeMint amendment No. 489, to establish a reserve fund for 
     Social Security reform.
       Allard amendment No. 491, to pay down the Federal debt and 
     eliminate Government waste by reducing spending on programs 
     rated ineffective by the Program Assessment Rating Tool.
       Grassley-Dorgan amendment No. 464, to limit farm payments 
     to $250,000 per person per year and apply the savings to 
     renewable energy/rural development, conservation, and 
     nutrition.
       Grassley amendment No. 502, to ensure the appropriate use 
     of funds provided for the Smithsonian Institution.
       Baucus-Rockefeller amendment No. 504, to affirm the 
     Senate's commitment to the reauthorization of the State 
     Children's Health Insurance Program.
       Cornyn amendment No. 511, to provide a deficit-neutral 
     reserve fund for the reauthorization of the State Children's 
     Health Insurance Program (SCHIP) that will cover kids first.
       Hutchison amendment No. 517, to provide tax equity for 
     citizens of States which do not have a State income tax by 
     providing for a permanent extension of the State and local 
     sales tax deduction from Federal income taxes, now scheduled 
     to expire at the end of 2007.

  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.


                           Amendment No. 525

  Mr. CORNYN. Mr. President, I send an amendment to the desk.
  The ACTING PRESIDENT pro tempore. Without objection, the pending 
amendment is set aside.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Texas [Mr. Cornyn] for himself and Mr. 
     Gregg, proposes an amendment numbered 525.

  Mr. CORNYN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

 (Purpose: To provide reconciliation instructions to the Committee on 
Finance to reform entitlement programs, to reduce the national debt and 
 to improve the standard of living for our children and grandchildren)

       On page 4, line 6, decrease the amount by $2,047,000,000.
       On page 4, line 7, decrease the amount by $4,291,000,000.
       On page 4, line 8, decrease the amount by $6,949,000,000.
       On page 4, line 9, decrease the amount by $9,936,000,000.
       On page 4, line 10, decrease the amount by $13,270,000,000.
       On page 4, line 15, decrease the amount by $2,047,000,000.
       On page 4, line 16, decrease the amount by $4,291,000,000.
       On page 4, line 17, decrease the amount by $6,949,000,000.
       On page 4, line 18, decrease the amount by $9,936,000,000.
       On page 4, line 19, decrease the amount by $13,270,000,000.
       On page 4, line 24, decrease the amount by $2,047,000,000.
       On page 4, line 25, decrease the amount by $4,291,000,000.
       On page 5, line 1, decrease the amount by $6,949,000,000.
       On page 5, line 2, decrease the amount by $9,936,000,000.
       On page 5, line 3, decrease the amount by $13,270,000,000.
       On page 5, line 7, decrease the amount by $2,047,000,000.
       On page 5, line 8, decrease the amount by $6,339,000,000.
       On page 5, line 9, decrease the amount by $13,288,000,000.
       On page 5, line 10, decrease the amount by $23,224,000,000.
       On page 5, line 11, decrease the amount by $36,494,000,000.
       On page 5, line 15, decrease the amount by $2,047,000,000.
       On page 5, line 16, decrease the amount by $6,339,000,000.
       On page 5, line 17, decrease the amount by $13,288,000,000.
       On page 5, line 18, decrease the amount by $23,224,000,000.
       On page 5, line 19, decrease the amount by $36,494,000,000.
       On page 19, line 12, decrease the amount by $2,000,000,000.
       On page 19, line 13, decrease the amount by $2,000,000,000.
       On page 19, line 16, decrease the amount by $4,100,000,000.
       On page 19, line 17, decrease the amount by $4,100,000,000.
       On page 19, line 20, decrease the amount by $6,500,000,000.
       On page 19, line 21, decrease the amount by $6,500,000,000.
       On page 19, line 24, decrease the amount by $9,100,000,000.
       On page 19, line 25, decrease the amount by $9,100,000,000.
       On page 20, line 3, decrease the amount by $11,900,000,000.
       On page 20, line 4, decrease the amount by $11,900,000,000.
       On page 25, line 12, decrease the amount by $47,000,000.
       On page 25, line 13, decrease the amount by $47,000,000.
       On page 25, line 16, decrease the amount by $191,000,000.
       On page 25, line 17, decrease the amount by $191,000,000.
       On page 25, line 20, decrease the amount by $449,000,000.
       On page 25, line 21, decrease the amount by $449,000,000.
       On page 25, line 24, decrease the amount by $836,000,000.
       On page 25, line 25, decrease the amount by $836,000,000.
       On page 26, line 3, decrease the amount by $1,370,000,000.
       On page 26, line 4, decrease the amount by $1,370,000,000.

  Mr. CORNYN. Mr. President, this amendment is one that I offered 
during the Budget Committee's deliberations. Unfortunately, the 
majority did not support this important amendment that reduces our 
Nation's debt, the bill that we will pass on to our children and 
grandchildren.
  My amendment reduces the debt by instructing the Senate Finance 
Committee to find approximately $34 billion in savings over the next 5 
years, and this is out of almost a $3 trillion budget.
  Two years ago, Congress made some progress in getting a handle on 
mandatory, or entitlement, spending by passing the Deficit Reduction 
Act, using the reconciliation process, I believe, for the first time 
since about 1997.
  The Deficit Reduction Act reduced the rate of growth in spending. I 
will say that again because it is important. It reduced the rate of 
growth of spending--it did not represent an actual cut in the way most 
Americans would think about a cut--by nearly $100 billion over the next 
decade. It was a very good first step in getting our fiscal house in 
order but, clearly, more needs to be done.
  Today, the Federal budget is already heavily weighted toward 
entitlement spending, such as Medicare, Medicaid, and Social Security, 
which takes up some two-thirds of all Federal spending, which is 
literally on autopilot because it grows at roughly 8 percent a year. As 
people live longer--as we hope we will continue to do--and the baby 
boom generation starts to retire, entitlements will continue to eat up 
a larger share of our budget and we will consume more of the economy.
  In the most recent long-term projections prepared by the 
Congressional Budget Office, CBO, outlays for Social Security, 
Medicare, and Medicaid combined are projected to increase to 10.5 
percent of our GDP by 2015--an increase of about 2 percentage points of 
GDP in less than a decade. By 2030, according to the CBO, outlays for 
those three programs will reach about 15 percent of GDP.
  The chairman of the Senate Budget Committee held a number of hearings 
on this fiscal timebomb earlier this year. Our Committee has received 
testimony from the Office of Management and Budget, the Treasury 
Secretary, the General Accounting Office, the Comptroller, Chairman of 
the Federal Reserve, and a number of think-tank representatives, and 
all, without regard to partisan stripe or affiliation, have highlighted 
the need for us to get a handle on our mandatory budget or entitlement 
spending.
  The chairman of the Federal Reserve noted that these rising 
entitlement obligations will put enormous pressure on the Federal 
budget in the coming years.
  In fact, if we do nothing over the next 30 years, we would not have a 
dime to pay for anything except for four areas: Social Security, 
Medicare, Medicaid, and part of the interest on the debt.
  We will not have the resources for other important priorities, 
including fighting the global war on terror, securing our borders, 
veterans health care, and education.
  As we all know, the President's budget includes a number of proposals 
to slow down the rate of growth in entitlement spending. I think this 
is a good place for the Senate Finance Committee to look at reducing 
the debt.
  If the majority has ideas that will also help reduce the debt, my 
amendment gives them the opportunity to put it in action because it is 
an instruction to the Finance Committee to

[[Page S3549]]

come up with a way, in their wisdom, that they believe they can 
accomplish this important goal.
  Last year, I offered a similar amendment on the floor. Some on the 
other side noted how my amendment may be a little unpopular back home. 
That is what happens when you go on a budget. We have been on a binge, 
with no limitation on spending, and it is time for the Federal 
Government, similar to the American family, to get on a budget. No one 
likes budgets, but it is the responsible thing for us to do.
  I don't think it is unreasonable for us to find savings in the amount 
of $34 billion out of the growth of entitlement spending over the next 
5 years given that under the budget during that period of time, the 
Federal Government will spend some $15 trillion. In other words, we are 
looking for $34 billion in savings over the same period of time the 
Federal Government will spend $15 trillion.
  As Chairman Bernanke said in his written testimony to our committee:

       Addressing the country's fiscal problems will take 
     persistence and a willingness to make difficult choices.

  The Comptroller General of the United States, in his written 
testimony to the Budget Committee, said:

       We owe it to our country, children and grandchildren to 
     address our fiscal and other key sustainability challenges.

  As I said, this is not a partisan issue, or certainly should not be. 
Our distinguished chairman of the Budget Committee has been eloquent on 
this subject. We see on this chart, he said on February 7, 2007:

       I have said I am prepared to get savings out of long-term 
     entitlement programs.

  Unfortunately, the number reflected at the bottom of this chart is 
the number of savings from entitlement programs in the budget he has 
proposed. It is a big fat goose egg. I think we can do better.
  I heard time and time again Members on a bipartisan basis say this is 
one area where we ought to work together to try to solve this problem 
for our children and grandchildren so we don't pass our debt to them 
for what we are spending today in these entitlement programs. But I 
ask: If not us, then who? And if not now, then when?
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, first of all, the chart by the Senator is 
factually wrong. When he puts up a zero, he is not talking about my 
budget because my budget has $15 billion in savings out of Medicare. So 
that chart, as colorful as it is, is just factually inaccurate.
  No. 2, if we look at what the Senator is proposing, the majority of 
the Medicare savings that are in the President's budget that Senator 
Cornyn is picking up in his proposal are generated by either freezing 
or cutting market basket updates for hospitals, for nursing homes, for 
rehabilitation facilities, for hospice, for home health, and ambulance 
services in every year over the next 10 years.
  MedPAC, which makes recommendations on market basket updates 1 year 
at a time, does not concur with many of the proposed cuts in 2008, much 
less the cuts over the next 10 years. For example, given the negative 
margins many hospitals are facing, MedPAC which is bipartisan, 
nonpartisan--has recommended a full market basket update in 2008 for 
inpatient and outpatient hospitals.
  In many cases, over time, these across-the-board cuts proposed by 
Senator Cornyn will hurt seniors' access to health care.
  There is no question about us having a serious problem with respect 
to the long-term entitlement challenges and what is the right way to 
deal with it. Frankly, I don't think any budget resolution is the place 
to deal with the long-term entitlement challenge. The budget resolution 
is only for 5 years. The contribution the budget resolution can make is 
to achieve balance within that period, budget balance within that 
period, but I believe the long-term challenges, which are challenges of 
15, 20, 25 years, can only be resolved by a bipartisan working group or 
commission, equally represented by Democrats and Republicans, to come 
back to Congress with a proposal to deal not only with Medicare but 
Medicaid and Social Security and the other long-term fiscal imbalances 
we have. Senator Gregg and I have such a proposal. I think that is the 
right way to address these long-term problems.
  We all acknowledge we are on a course that absolutely is 
unsustainable. As chairman of the Budget Committee, I have organized 
hearing after hearing after hearing to put a focus on precisely that 
problem. We all know in this country that we are spending far more on 
health care than any other country. Mr. President, 16 percent of our 
gross domestic product is going for health care. The next largest 
spender in comparison is at 11 percent of gross domestic product. That 
difference--the difference between 11 percent of gross domestic product 
and 16 percent--is $800 billion a year--a year.
  To put the President's Medicare and Medicaid cuts and the cuts 
proposed by this amendment in perspective, consider that his budget 
would cut those programs by $270 billion over the period from 2008 to 
2017. Those savings would be more than wiped out by the $2 trillion in 
tax cuts proposed by the President over that same period. They talk 
about helping us get back on some kind of fiscal path, but the math 
doesn't work. The math doesn't come close to working. They would have 
savings from Medicare and Medicaid of $270 billion over that 10-year 
period, but that is totally dwarfed by the cost of their tax cuts over 
that same period.
  I do not believe this amendment merits our support. I do not believe 
this is the right policy. I do not believe cutting the reimbursement 
for hospitals, for nursing homes, for rehabilitation facilities, for 
hospice, for home health, and ambulance services is the right way to 
proceed.
  I do believe we need separately, apart from a budget resolution, to 
deal with the long-term entitlement challenges, either through the kind 
of working group Senator Gregg and I have proposed or through a 
bipartisan commission. I don't think a budget resolution that will be 
largely supported just on one side of the aisle is the appropriate 
place to deal with these long-term challenges.
  Mr. President, what is the time remaining?
  The ACTING PRESIDENT pro tempore. The proponent of the amendment has 
54 minutes remaining. The majority manager has 54 minutes remaining.
  Mr. CONRAD. I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, here is the problem. The budget before us 
does absolutely nothing in the area of addressing entitlement reform 
and savings and does a significant amount of spending money, a 
significant amount of tax increases. It raises the tax burden of the 
American people from its historic level 18.2 percent up to 20 percent. 
It raises taxes by hundreds of billions of dollars. It raises spending 
by tens of billions of dollars but does not address the most 
fundamental issue we face as a nation, which is the pending financial 
meltdown of this country as a result of the baby boom generation 
retiring, and our children cannot afford the costs.
  The Senator from Texas is right, there are zero savings on the 
mandatory side of this budget. When the chairman gets up and says there 
is $15 billion of savings, he forgot to finish the sentence. There is 
$30 billion of spending. So actually there is a net loss on the 
entitlement side for the proposed budget. That has been adjusted by the 
amendment of Senator Baucus, so it is now basically a wash where we 
have no savings, $15 billion of savings, $15 billion of new spending in 
entitlement programs. So there is a zero on that account.
  What is being proposed by the President is entirely reasonable. What 
is being proposed by Senator Cornyn is reasonable. He suggests going 
forward we should accurately reflect the reimbursement rate for 
hospitals and for providers--not doctors in this instance but for 
providers. It doesn't affect beneficiaries. But to call this a freeze 
or a cut is totally disingenuous because it is neither. Spending is 
going to increase dramatically in the entitlement accounts, especially 
in Medicare, by trillions of dollars. Only in the nomenclature of the 
Democratic side of the aisle is a trillion dollars of increase called a 
cut when it is reduced from trillions to trillions less .2 percent,

[[Page S3550]]

two-tenths--two-hundredths of 1 percent.
  That being said, it is not even a freeze or reduction from the 
concept of the way it is structured. What is being proposed in the 
Cornyn amendment, which is reflective of the President's original 
proposal, which is the reimbursement rate, which is now inflated by 1.5 
percent because of savings and technological advances, so the 
reimbursement rate is about 1.2 percent more than it should be to 
accurately reflect the fair reimbursement rate because the 
reimbursement rate is inflated by savings and benefits which providers 
get through cost savings and technological advantages--what is being 
proposed by the Cornyn amendment is we take half that inflated 
payment--just half of it--and put it back into making the system more 
solvent so our kids can afford the system and we will have a solvent 
system for our seniors.
  That is what this is about: taking half of that inflated payment, 
which is about a six-tenths of 1 percent adjustment. Yes, it translates 
into big dollars, but as a practical matter, it is a fair adjustment, 
and we save it so that our kids can benefit from it by having a more 
affordable system and our seniors can benefit from it.
  The President's program does not affect senior citizens. It affects 
providers. Only the wealthiest seniors citizens will be impacted by the 
President's program, and we will get to that amendment next, which will 
be the Part D premium and how that should be reimbursed by wealthy 
seniors.
  This is a reasonable amendment. It is regrettable it wasn't included 
in this budget. The Senator said this budget is only going to be passed 
by the other side. Quite honestly, if the Senator had accepted this 
amendment and the Ensign amendment which will be next, which would make 
the Part D premium properly reimbursed, and had taken the Kyl amendment 
yesterday, he would have a bipartisan budget. He would have a 
bipartisan budget. But he wants to stick to the tax-and-spend, do-
nothing-on-entitlements budget he brought to the floor. He doesn't have 
a bipartisan budget. We are trying to help him out. We are trying to 
make it bipartisan, more reasonable and, most importantly, helping out 
our kids and people who are going to retire by making the Medicare 
system more solvent.
  This amendment, if it is adopted, and the next one--if those two 
amendments are adopted, they will address the outyear insolvency of the 
Medicare trust fund, which is now about $32 billion, and will reduce 
that insolvency between 25 percent and 35 percent. That is huge and is 
good news. It would be very good news if we do it. We should do it. If 
we don't do it, in 10, 15 years, we will have to pay the piper. The 
system will melt down, our kids will be stuck with the bills, and their 
lifestyles will be impacted in a very negative way.
  Why don't we get a time agreement on this amendment so we can go to 
the next amendment and move on?
  Mr. CONRAD. Mr. President, I don't think we are quite prepared to do 
that because we have others who are going to want to speak. But I think 
we can deal with this pretty expeditiously and come pretty close to the 
tentative schedule to which we agreed.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, much of what the Senator has just said, 
frankly, I agree with. The truth is, we are on a completely 
unsustainable course. It must be dealt with. The question is how to 
best deal with it.
  With respect to the amendment of the Senator from Texas, I got a 
letter from 43 of our colleagues in the Senate, including 11 
Republicans, on this very subject. They said: Do not cut hospital 
reimbursement.
  In my part of the country, hospitals are dealing with negative 
margins. They are losing money. If this amendment were to go forward, 
unfortunately, it would be devastating to hospitals, to nursing homes, 
to hospice care, to ambulance services, especially in the rural parts 
of our country, and virtually every State has rural parts.
  The MedPAC statistics are very clear on this question. Yes, there are 
some hospitals that are enjoying positive margins. They tend to be 
urban hospitals that have much higher rates of reimbursement under 
Medicare than do rural hospitals. Let me give an example.
  In my State of North Dakota, at Mercy Hospital in Devils Lake, ND, if 
they are treating somebody who had a heart attack, they get one-half 
the reimbursement of Our Lady of Mercy Hospital in New York City--one-
half as much. Their costs aren't half as much, but their reimbursement 
is half as much. By the way, those hospitals, many of them in my 
State--I have over 40--are experiencing negative margins. They are 
losing money.

  The Senator says this doesn't represent a cut. He is right in one 
sense. It will be more money. But in relationship to the expense, it 
will be less. That is the way in which it represents a cut. He is 
absolutely correct it will be more dollars the next year than the year 
before, but in relationship to the expenses, which are going up more 
rapidly in health care, as we all know, than the underlying rate of 
inflation, guess what. It will be less. That is why I use the term ``a 
cut.''
  To say the budget before us doesn't do anything about these matters 
is not true.
  First of all, we have $15 billion of Medicare savings in the 
underlying budget resolution. That is No. 1.
  No. 2, we have a reserve fund called the Health Information 
Technology Reserve Fund. All of us know the expansion of information 
technology in health could lead to very significant savings. In 2005, 
only 15 to 20 percent of physicians' offices and 20 to 25 percent of 
hospitals had electronic medical records systems. According to 
estimates by a RAND study from 2005, our Nation's health care system 
could save more than $81 billion annually if we had widespread 
implementation of electronic medical records--$81 billion a year. That 
totally dwarfs the savings of the amendment of the Senator from Texas.
  Mr. President, I know the Senator from Ohio is here and wishes to 
respond. I yield 5 minutes to the Senator from Ohio.
  Mr. BROWN. Mr. President, I thank my friend, the Senator from North 
Dakota, for his terrific work on this budget, and I rise to oppose the 
Ensign amendment.
  Medicare is a social contract. Individuals pay into the program 
during their working years, and they receive health coverage when they 
retire. One good way to undermine universal support, to undermine 
support for the program is to arbitrarily make part of the Medicare 
population pay a significantly higher price for the same product. 
Ultimately, this will drive higher income individuals out of the 
program to purchase their own coverage. When that begins to occur, 
working individuals will begin to wonder why they are paying Medicare 
taxes when Medicare coverage may or may not be worth their while on 
retirement.
  Medicare, I repeat, is a social contract. Efforts to undermine it, 
such as this one, will fail.
  It is interesting that there are Members of this body who want to 
raise taxes on Medicare beneficiaries while at the same time cut taxes 
for Donald Trump. I repeat: Raise taxes for Medicare beneficiaries but 
cut taxes on some of the wealthiest individuals in our country. If you 
want to undermine Medicare, create winners and losers among its 
enrollees, then that is the way to do it.
  There is something else at work here, though. I came to the House of 
Representatives 14 years ago, and almost immediately, I saw the 
hostility many Members of this body and that body felt toward Medicare. 
In 1995, when the Republicans took control of the House of 
Representatives, one of the first things they did--it was their first 
opportunity to go after Medicare--they proposed tens of billions of 
dollars in cuts in Medicare in order to pay for their tax cuts for the 
wealthiest people. The same kind of thing here--cut Medicare to pay for 
tax cuts on the wealthiest people in our country. That is the kind of 
hostility they had. Every time they had a chance, once they were in the 
majority, they tried to do it.
  The Speaker of the House in those days said that under his plan, 
Medicare would wither on the vine. So they began attempts to privatize 
Medicare, to shift to fee-for-service. Traditional Medicare, which had 
served this country well--at that point for three decades, now for four 
decades--they wanted to take traditional Medicare and to

[[Page S3551]]

privatize it and push some Medicare beneficiaries out of traditional 
Medicare into Medicare managed care. The Government pays more for 
Medicare managed care, and beneficiaries and taxpayers get less for 
those dollars. But it is all part of their efforts to undermine 
Medicare.
  Maybe we should go back further than 10 years ago or 14 years ago and 
go back to 1965 when Medicare was created. In this body, overwhelming 
numbers of Republicans opposed Medicare, the creation of it. In this 
body and across the hall, in the House of Representatives, a huge, 
overwhelming majority of Republicans opposed the creation of Medicare 
then. They were hostile to the concept of universal coverage, of making 
sure every elderly person in this country had the opportunity to enroll 
in Medicare. They are hostile to it today, and they were hostile to it 
in 1995, when Speaker Gingrich said Medicare would wither on the vine. 
They began the attempts to cut Medicare on the one hand and to do 
further damage by privatizing it on the other.
  We are continuing to see this assault even now. They say they are for 
Medicare. They run television ads saying: We would never cut Medicare; 
we think it is a great program. But when they come to the floor of this 
body, of this Senate Chamber, over and over, from every different 
direction, they attack one of the single greatest programs that this 
Government has ever created and that our people have ever had.
  In 1965, half the elderly in this country had no health insurance. 
Today, after 41\1/2\ years of Medicare, almost everybody in our country 
is covered. If they had their way, they would begin to privatize, they 
would begin to cut, and Medicare would not be the universal program 
with the universal, overwhelming support of the people in this country.
  If the Senate wants to reflect what the people in this country think, 
we should overwhelmingly defeat the Ensign amendment because it 
undercuts what is best about our health care system. It undercuts the 
universal nature of Medicare, which works for everybody. If you want to 
preserve Medicare, there are things we can do to fix it, to make some 
small adjustments. But this amendment is not the way. We should defeat 
the Ensign amendment.
  Mr. GREGG. Mr. President, I have attempted not to respond to the 
Senator from Ohio because he appears to be stuck in the period of 1960, 
when, apparently, our position was defined by somebody who was here in 
1960. I wasn't here in 1960. I probably won't be here in 2025. In fact, 
I am absolutely sure I won't be. But that is going to be when this 
Medicare system goes broke.
  What I am concerned about is my children, America's children, and 
their children being able to afford this system when I retire and the 
rest of my generation retires and makes it basically unaffordable. The 
proposals the President has put forward are an attempt to make the 
system solvent, or at least more solvent. It doesn't bring it into 
solvency, and there are reasons for that.
  The Senator from North Dakota makes a good point: Rural hospitals are 
not reimbursed correctly under the formula. But that is not the issue 
which is being raised by the Cornyn amendment. That issue, actually, 
will be addressed by the Grassley amendment, which I understand is 
going to be offered to get the reimbursement straight.
  What is very obvious is that there is an inflated reimbursement rate 
occurring within Medicare of about 1.2 percent due to technology 
advancements and due to savings through efficiencies, which is inuring 
to the benefit of the system at the expense of the long-term life 
structure of the system. It is reasonable to take half that benefit--
half that benefit--and apply it to make sure the system has more 
solvency to it.


                           Amendment No. 472

  Mr. President, I send an amendment to the desk on behalf of Senator 
Ensign, and I ask that it be reported.
  The PRESIDING OFFICER (Mr. Obama). Without objection, the pending 
amendment is set aside, and the clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from New Hampshire [Mr. Gregg], for Mr. Ensign, 
     for himself, Mr. Gregg, and Mr. Graham, proposes an amendment 
     numbered 472.

  Mr. GREGG. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To require wealthy Medicare beneficiaries to pay a greater 
                share of their Medicare Part D premiums)

       On page 4, line 6, decrease the amount by $102,000,000.
       On page 4, line 7, decrease the amount by $312,000,000.
       On page 4, line 8, decrease the amount by $633,000,000.
       On page 4, line 9, decrease the amount by $868,000,000.
       On page 4, line 10, decrease the amount by $1,113,000,000.
       On page 4, line 15, decrease the amount by $102,000,000.
       On page 4, line 16, decrease the amount by $312,000,000.
       On page 4, line 17, decrease the amount by $633,000,000.
       On page 4, line 18, decrease the amount by $868,000,000.
       On page 4, line 19, decrease the amount by $1,113,000,000.
       On page 4, line 24, decrease the amount by $102,000,000.
       On page 4, line 25, decrease the amount by $312,000,000.
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       On page 5, line 11, decrease the amount by $3,029,000,000.
       On page 5, line 15, decrease the amount by $102,000,000.
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       On page 5, line 18, decrease the amount by $1,916,000,000.
       On page 5, line 19, decrease the amount by $3,029,000,000.
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       On page 19, line 16, decrease the amount by $300,000,000.
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       On page 20, line 3, decrease the amount by $1,000,000,000.
       On page 20, line 4, decrease the amount by $1,000,000,000.
       On page 25, line 12, decrease the amount by $2,000,000.
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       On page 25, line 16, decrease the amount by $12,000,000.
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       On page 25, line 20, decrease the amount by $33,000,000.
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       On page 25, line 24, decrease the amount by $68,000,000.
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       On page 26, line 3, decrease the amount by $113,000,000.
       On page 26, line 4, decrease the amount by $113,000,000.

  Mr. GREGG. Mr. President, the Ensign amendment addresses what the 
Senator from Ohio started speaking on. He anticipated, I guess, this 
amendment.
  To try to explain the way the Medicare system works today, Part A you 
pay for, theoretically, with your hospital insurance. Part B, which 
deals with doctors, you pay for, theoretically, with a premium, but the 
premium is subsidized to the tune of 75 percent of the cost of the 
premium. Part D, you don't pay for anything, for all intents and 
purposes, except for the insurance, to the extent you buy insurance. 
But the actual coverage that is federally supplied is not paid for. 
Part D is a drug benefit. This amendment says that high-income 
individuals, people with incomes over $80,000 individually and $160,000 
jointly, should have to pay a fair proportion of the premium of Part D 
that is now being subsidized by working Americans.
  Let me try to put it in context. There is a single woman working in a 
restaurant in downtown Des Moines or

[[Page S3552]]

there is a mother and father working on an assembly line in 
Poughkeepsie or there is a father working in a garage in New Hampshire. 
Those individuals, working for a living and trying to make ends meet, 
trying to do all the things you want to do to make your life better, 
are paying the cost of the drug insurance for retired Senators and for 
people who have extraordinary amounts of money--for example, Bill 
Gates' father. I don't mean to pick on Bill Gates' father, I am sure he 
is a nice man, but he has enough money to pay for his drug insurance 
under the Part D Program, as can retired Senators, in most instances. 
Yet those people are being subsidized by working Americans because we 
have this system which doesn't require people to pay any portion of the 
fair cost of their drug insurance. We do it under Part B, we do require 
high-income people to pay, but under Part D, we don't. Now, with Part 
B, we don't require them to pay enough, but we at least require them to 
pay something. Part D, we don't.
  So this amendment simply says that in the Part D Program, high-income 
people, people with incomes over $80,000 and $160,000, should have to 
pay some of their cost. I find it incredible that the Senator from Ohio 
opposes that on the grounds of fairness to working Americans. The 
working Americans are the ones having to pay that cost. It is just 
incomprehensible to me that the other side of the aisle, which 
consistently talks in terms of making sure high-income people pay a 
fair share of the burden of the Federal Government's costs, are not 
willing to ask those same high-income individuals pay the fair share of 
the cost of Medicare. And we are not even asking for a fair share, 
quite honestly.
  So that is what the Ensign amendment does. It is a very appropriate 
amendment, and it would save a significant amount of money over the 
long term for the Medicare trust fund. I think it is somewhere around 
$1 trillion. It would actually move the Medicare system toward solvency 
by $1 trillion over the actuarial life, which is 75 years. In the short 
term, it is obviously nowhere near that number. But it is a significant 
effort to try to put in place a good policy, a correct policy, which is 
that high-income individuals should pay a fairer cost of their drug 
benefit and at the same time use those funds to make the Medicare 
system more solvent for seniors who are going to be retiring in the 
future. It is very reasonable. It only affects 5 percent of seniors, 
which means 95 percent of seniors are not impacted at all and, thus, it 
should be done. It should be done now. We shouldn't wait to do it. We 
should do it now because now this problem is coming at us pretty fast. 
If we don't get started on it, it is like that old oil filter ad: You 
can pay me now or pay me later. If we wait until later, this will be 
extraordinarily expensive. This is one of the things we should do, 
along with the original Cornyn amendment. We should also do that.
  Mr. CONRAD. Mr. President, I actually enjoy listening to my 
colleague, Senator Gregg, because he is thoughtful and passionate on 
these matters, and in many ways we are in very close agreement. I know 
it may not appear that way to people listening, but there are many 
things the Senator says that are absolutely true, and so that part of 
his presentation I want to agree with.
  It is absolutely the case that we are headed on a course which is 
unsustainable. It is absolutely the case we cannot continue on the 
current path. It is absolutely the case that, in my judgment, a policy 
initiative along the lines of what the Ensign amendment provides is 
going to have to be part of an ultimate solution. In fact, I voted for 
such things with respect to Part B in the past. I have supported them 
publicly. I have campaigned on those things. But I must say, the 
reality here is this: We all know the budget resolution does certain 
things and does not do certain other things. The budget resolution, as 
much as we might want it to, does not determine policy outcomes such as 
those prescribed in the Ensign amendment or, for that matter, the 
Cornyn amendment. It simply doesn't have that power.

  The budget resolution will give an assignment to the Finance 
Committee of how much money to raise, of how much money to spend. It 
does not tell them how to do it. Both the Cornyn amendment and the 
Ensign amendment seek to do something the budget resolution cannot do. 
They seek to prescribe, to require the Finance Committee to come up 
with certain policy outcomes. The Budget Committee does not have that 
power, it does not have that authority, and it cannot be done through a 
budget resolution.
  Let's be square with people who are listening about what we can do 
and what we cannot do. The effect of these amendments, the true effect, 
will not be to do any of the policy prescriptions we talked about here. 
It will only be to reduce the amount of money for Medicare the Finance 
Committee has to meet the needs of the American people. That is what 
these amendments will do.
  On the specific policy of the Ensign amendment, I am sympathetic to 
the basic notion. The problem is the specifics. The devil is in the 
details. First, as a member of the Finance Committee as well as the 
Budget Committee--and the Finance Committee will decide this, not the 
Budget Committee--on the policy of this amendment raising Part D 
premiums for certain higher income enrollees, I have many questions. 
How would CMS go about charging some people higher premiums under Part 
D when the premiums are set by drug plans, by private drug plans, not 
by CMS? How is that going to work? How can CMS require higher premiums 
to be collected from private plans? As we all know, there are more than 
1,500 private drug plans, each with a separate premium they offer. How, 
conceivably, would this policy be implemented?
  Premiums are important price signals for beneficiaries in the 
Medicare Part D Program. Under this approach, would we be setting 
multiple premiums for a single Part D plan? Will this not add to the 
complexity of the program? This seems to dramatically complicate the 
market-based approach of Part D.
  When the administration came before the Finance Committee on this 
proposal, they had no answers when asked how their premium proposal 
would actually work and how it would affect the ability of 
beneficiaries to shop for plans. The administration simply had not 
thought through how this would all work in the real world. This is 
another reason why the Budget Committee in a budget resolution does not 
make these judgments. It simply does not because this is a policy 
determination that is in the authority of the Finance Committee.
  While I am very sympathetic to the basic notion of income-related 
premiums and Medicare--I think it is going to have to be part of the 
long-term solution--the Budget Committee doesn't make these 
determinations. The Budget Committee does not make this policy. To 
suggest it does is simply to mislead our colleagues and mislead those 
who are listening. The one thing that these two amendments, the Cornyn 
amendment and the Ensign amendment, would do is to cut funding, reduce 
funding that the Finance Committee would have to provide resources 
under Medicare. All the other things they have talked about here, the 
policy prescriptions they have outlined, are a nullity. They mean 
nothing because the Budget Committee and the budget resolution do not 
make those decisions.
  Let's go to the larger question of how are we going to get out of 
this very serious long-term entitlement crunch we face? As I have 
indicated, I believe the only way it is going to happen is either a 
working group or a commission that is bipartisan in nature, evenly 
divided between Republicans and Democrats, that is given the authority 
to come up with a plan and that they then come back to Congress on a 
fast-track basis for congressional approval. I believe it requires the 
involvement of the administration. I believe it requires the 
involvement of Democrats and Republicans in the Senate and the House. I 
believe it involves health information technology--which we have a 
reserve fund in this budget resolution to address, which the RAND 
Corporation has told us could save $80 billion a year.
  I believe it involves focusing on the chronically ill; that is the 5 
percent of Medicare beneficiaries who are using half of the money. We 
already know if we better coordinated their care, we could have 
substantial budget savings and get better health care outcomes. What a 
remarkable thing that would

[[Page S3553]]

be, to both save money and to get better health care outcomes. How 
could that be? Very simply: That 5 percent of Medicare beneficiaries 
who are using half of the budget, no one is managing their cases--or in 
most cases nobody is managing their cases. So what happens? They are 
seeing multiple specialists who are giving them multiple prescriptions. 
They are being subjected to multiple tests, none of it very well 
coordinated. As a result, a lot of money is wasted and in many cases 
they are made less healthy. How can that be?
  We did a study with some 20,000 patients. We put a case manager on 
every one of their cases. It was very interesting. The first thing they 
did was go into their households and get out all the prescription drugs 
they were taking. On average they found they were taking 16 
prescription drugs. After review of the cases, they found they could 
cut that in half, cut it down to eight prescription drugs. The result 
was, people were healthier.
  Let me give an example from my own life. I went into my father-in-
law's kitchen and got all the prescription drugs he was taking out on 
the table. Sure enough, he was taking 16 different prescription drugs. 
I got on the phone to the doctor, started going down the list. When I 
got to the third drug he said, My God, he should not be taking that. He 
should not have been taking that for the last 3 years.

  I go further down the list, two drugs he is taking, the doctor says 
to me, He should never be taking those two together, they work against 
each other.
  I said, Doctor, how does this happen?
  He said, It is very simple. Your father-in-law has three doctors: a 
heart doctor, a lung doctor, an orthopedic specialist; he has me as his 
family practice physician. They are all prescribing different drugs for 
him. None of them know what the other is doing. He is sick and 
confused, his wife is sick and confused--we have chaos.
  He said, I am the one who is supposed to know, but your father-in-law 
is getting prescriptions in the hospital pharmacy, the corner pharmacy, 
the pharmacy down at the beach, he is getting a mail order. As I say, 
he was sick and confused, his wife was sick and confused and nobody 
knew what was happening. He had three MRIs in the last 9 months of his 
life.
  That is what is happening in this medical system over and over. That 
is where the big money is. These amendments do not do anything about it 
and the fact is, no budget resolution can do anything about it because 
the budget resolution does not decide these policy matters. It is left 
to the committee of authorization. It is left to the committee that has 
jurisdiction, and the committee that has jurisdiction on these health 
policy issues is not the Budget Committee, as much as I might wish it 
were so. The committee of jurisdiction is the Finance Committee. They 
are the ones that will make these policy determinations.
  As well meaning as these amendments are, No. 1, they do not do what 
they say they are going to do and, No. 2, the thing they do accomplish 
is to cut funding for Medicare. And MedPAC, the nonpartisan-bipartisan 
professionals who make recommendations to us on Medicare policy, has 
said these cuts, these specific cuts would be counterproductive; that 
they would cut hospitals, they would cut nursing homes, they would cut 
hospice care, they would cut ambulance services. In rural areas where 
hospitals are already suffering negative margins, what these amendments 
might accomplish is to put those health care facilities right out of 
business. That is what would happen in my State, according to the 
hospital directors of the more than 40 hospitals in my State. They say: 
You pass these amendments and some of our hospitals are shutting their 
doors.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I appreciate the intensity of the Senator 
from North Dakota. I wish it would be followed up with legislative 
language. I have heard his talk before on Medicare and on his family 
situation, but he is going to be giving that same talk 10 years from 
now at the rate we are going around here. We are not getting anything 
done. These proposals would get things done.
  The concept that this is going to close a hospital, a .6 percent 
reduction in the reimbursement rate, which is going up? That is absurd 
on its face. No, what is being proposed here is a legitimate effort to 
try to get at the underlying problem, which is the trust fund has a $32 
trillion unfunded liability--trillion. That is almost the net worth of 
the entire country. That is almost as much in taxes as have been paid 
in since the country started. It is a huge problem. This budget does 
nothing about it, even though there has been significant rhetoric from 
the other side of the aisle about that. We are suggesting we do 
something about it.
  Sure, the budget doesn't do the nuts and bolts of policy, but the 
budget has a lot of policy in it. You cannot on one hand say we don't 
do nuts and bolts of policy and then have a budget which is laden with 
policy--assumptions and specific language--in SCHIP, in taxes, in war 
fighting. It is inconsistent.
  This is a reasoned approach, both of these amendments. Why shouldn't 
somebody making more than $160,000 a year pay some fair percentage of 
their drug costs so somebody who does not have that type of money can 
afford the drug costs down the road? Of course, they should. These two 
amendments are as close to apple pie as you can get if you are going to 
try to address the issue of Medicare. They are reasonable. If we can't 
do this, then we can't fix the Medicare system. That is the problem. If 
we do not fix the Medicare system on our watch--since we are the 
problem, the baby boom generation--then we have real issues. That is 
why we should proceed with these amendments.
  I see Senator Smith is here. I suggest we move on to his amendment so 
we can get on the time.
  Mr. CONRAD. We can do that after I yield 5 minutes to Senator 
Stabenow on these amendments, and then we can.
  Mr. GREGG. Why don't we agree by unanimous consent that after Senator 
Stabenow speaks for 5 minutes we go to Senator Smith?
  Mr. CONRAD. Fair enough.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Michigan is recognized.
  Ms. STABENOW. Mr. President, I thank the chairman and everyone for 
all the hard work they are doing on this very important budget. I am 
happy to talk about ways we can save dollars in Medicare without 
cutting access or quality under Medicare. These amendments do not do 
that. These amendments start from the premise that we are going to cut 
providers. Let's look at doctors or hospitals or home health or maybe 
hospice, maybe nursing homes. It says what we ought to be doing is 
cutting back on payments in this system, which will cut back on their 
ability to service people, the ability for people to get care they 
need.
  I find it so interesting on all of these amendments that folks--my 
friends on the other side of the aisle--go after those who are 
receiving health care. Medicare is a universal system. Everyone pays 
in. It involves choice. You can go to an HMO or your own doctor, you 
can sign up for Part B and get more coverage, pay a bigger premium, 
Part B--it is a system that has worked, but everyone has paid in.
  So this notion that somehow we are going to pick this apart on the 
floor of the Senate without going through the process of looking at the 
whole system and how we really achieve savings, really achieve savings 
without cutting services, is mind boggling to me.
  We saw a $400 billion Medicare prescription drug benefit pass the 
Senate, which now costs more--we do not know how much more but costs 
more--by the way, unpaid for, paid for on a credit card, I guess, that 
we know could be less than that.
  If we talk about savings in Medicare, let's negotiate prescription 
drug prices. That is a way to make sure that we lower the price of 
Medicare. Now, it would involve taking on folks who many of my friends 
on the other side of the aisle support, industries that benefitted from 
this Medicare bill. But rather than saying we are going to cut our 
doctors trying to service our seniors, or our hospitals trying to hold 
it together and treating people, or home health, rather than saying we 
are going to cut out services in some way, let's go to the real cost. I 
am happy to go to the real costs that we can address while increasing 
access and quality.

[[Page S3554]]

  One is to negotiate a better deal, negotiate a better deal for 
prescription drugs. I hope we are going to, in fact, do that as a 
Congress to be able to get a better deal.
  Another thing would be to take the 31 cents on every dollar in health 
care that is the administrative cost--most of this is generated by the 
Federal Government in some way--and address health information 
technology, which many of us have worked on, Senator Snowe and I have 
legislation on, Senator Kennedy, Senator Enzi. We have bipartisan 
interest. Let's tackle that, and that would increase quality and access 
and dramatically cut the cost.
  E-prescribing of prescription drugs alone, according to the Rand 
Corporation, would save $80 billion, just your pharmacy being able to 
talk to your doctor, talk to the hospital, and so on.
  I came from a meeting where people were talking about great things: 
the increase in quality and access, and cutting costs. So let's talk 
about health IT. Let's talk about generic drugs which, if we have more 
competition from generic drugs, we would dramatically bring down the 
costs of Medicare.
  So there is a lot we can do that does not involve going to the folks 
providing care and saying: We are going to cut you one more time. We 
are going to cut you one more time, or going to the universal nature of 
a health care system. This is not a low-income system. This is a 
universal system where everybody in America pays in, and it is stronger 
because of that.
  So I would say that we should reject the two amendments in front of 
us. But we should certainly get about the business of addressing health 
care costs in this country through Medicare and through other means. We 
spend almost twice as much of our GDP on health care than any other 
country, with 50 million people with no health insurance. That alone 
shows there is something wrong with that picture.
  We know we have had increases in Medicare, no question about it. But 
let's look at where they are coming from. Let's look at where they are 
coming from. Certainly, the area of lacking prescription drug 
competition is a big one. Administrative costs is a big one. Let's look 
at where we can save costs. I know it means taking on some pretty big 
special interests. There has been an unwillingness to do that because 
there are folks who make a lot of money off of Medicare, a lot of 
money.
  I would not suggest it is the doctors or the hospital or the hospices 
or home health nurses, but there are folks who make a lot of money. 
They do not want to see us deal with the real costs. So let's go back 
one more time after the providers. Let's go back one more time and try 
to dismantle what is a universal health care system called Medicare. It 
works.
  Frankly, I would like to see that kind of a universal system 
available, that is structurally available to every American, not just 
find ways to cut the one part of universal health care that we have in 
this country. I would hope that we would leave it to the Finance 
Committee to wrestle with all of those issues and let us figure out how 
to do this right.
  I would hope my colleagues would say no to these two amendments that 
take us backwards in providing health care for every American.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.


                           Amendment No. 510

  Mr. SMITH. Mr. President, I appreciate the efforts of the chairman 
and ranking member in setting forth a budget for the United States.
  I come to the floor today to speak briefly about two amendments that 
I have at the desk that focus on two issues relating to health care, 
which I think are very important. I hear a lot of support in the 
Chamber for the reauthorization of SCHIP. I, for one, not only want to 
reauthorize it but expand it.
  There are all kinds of ideas for how to fund such a thing. I am here 
today to speak substantially about how we actually get the real dollars 
to accomplish that.
  It is hard to do a townhall meeting in my State where the issue of 
health care does not come up. It should come up. Usually there is a 
story about a child with a health condition ranging from a cold to a 
broken leg, sometimes cancer, children who do not have access to health 
care. You see it in the papers nearly every day. Frankly, it is 
inexcusable in the United States of America.
  So I have come today to make a proposal on the budget that is unusual 
for me because it involves a tax increase. I am very proud of my record 
in the Oregon State Senate and the U.S. Senate of opposing new taxes 
and voting to reduce taxes. But when it is appropriate, I have in the 
past voted to increase taxes on tobacco products in order to provide 
money for health care because of the important nexus that exists 
between tobacco use and public health care costs.
  So today with my amendment I am proposing that Congress dedicate an 
increase in the tobacco products excise tax of up to 61 cents to SCHIP 
reauthorization.
  In my home State of Oregon, 117,000 children do not have access to 
health insurance. We know almost half of these children are currently 
eligible for either Medicaid or SCHIP but they simply are not enrolled. 
The challenge Oregon faces is that even if they allocate adequate State 
funding to cover these children, they do not have enough Federal money 
under the current SCHIP allotment to enroll them.
  Increasing the tobacco excise tax would allow Oregon to reach out, as 
in other States, to find those kids and get them enrolled so they have 
health care coverage. Oregon is one of many States that have a looming 
so-called shortfall. Starting in 2009 the State of Oregon will run out 
of money to simply cover the children who are currently enrolled, to 
say nothing of those who are eligible but unenrolled.
  Should that happen, the State would potentially cut off new 
enrollments and be forced to reduce eligibility levels. So increasing 
the tobacco excise tax will stop that from happening. While we do not 
yet have an official score from the Congressional Budget Office, we do 
know that based on their estimates a 50-cent increase would generate an 
additional $26.6 billion in new revenue.
  The tax now stands at 39 cents. I proposed in my amendment to 
increase that up to 61 cents for a total Federal tobacco tax of $1. 
That would be dedicated to reauthorize SCHIP. I believe if the Finance 
Committee chooses to utilize the full 61-cent increase, we would see at 
least $30 billion for SCHIP, if not the $35 billion.
  Therefore, I hope my colleagues will find it in their hearts and in 
their mouths to vote aye when this very important vote is cast because 
it literally means health care for children. Many groups have supported 
this amendment. To name a few prominent ones: the March of Dimes, 
Families USA, the American Hospital Association, the National Council 
of Community Behavioral Health Centers, America's Health Insurance 
Plans, and First Focus.


                           Amendment No. 509

  My second amendment relates to the battle against HIV/AIDS. This 
battle is being hindered because we are not focusing enough effort on 
providing early treatment to individuals who have been diagnosed with 
this disease. By targeting treatment earlier, we can help prevent the 
progression to full-blown AIDS. This is especially true for low-income 
individuals who may lack stable access to potential lifesaving 
pharmaceutical treatments and other health care services.
  While Medicaid is an important provider of health care to those 
living with HIV/AIDS, most States require that individuals become 
disabled before they can qualify for coverage. In a sense, they must 
become sicker before they get treatment. That is simply not right. 
Full-blown AIDS is an incredibly costly illness to treat. It has much 
more of an impact on an individual's quality of life than HIV.
  From a fiscal and moral standpoint it is essential that we focus more 
of our resources on providing early treatment to individuals with HIV. 
That is why I am filing an amendment to the budget resolution that 
would create a $500 million deficit-neutral reserve fund for 
demonstration projects that provide Medicaid coverage to low-income 
individuals diagnosed with HIV.
  It is similar to the bill that I filed last week along with 20 of my 
colleagues that extends to all States the option of providing Medicaid 
coverage to these individuals.

[[Page S3555]]

  That initiative, known as the Early Treatment for HIV Act, or ETHA, 
was modeled after the successful breast and cervical cancer benefit 
added to the Medicaid Program several years ago. The treatment 
authorized under my amendment would be provided in the same earlier-is-
better fashion, so that more HIV/AIDS cases are prevented from reaching 
the point of full-blown AIDS.
  My amendment would provide Congress and the Centers for Medicare and 
Medicaid Services the opportunity to learn more about the cost-saving 
benefits of treating HIV in its early stages. It is expected that in 
addition to Medicaid, other Federal programs such as SSI and Medicare 
will realize significant long-term savings by preventing individuals 
from being disabled by AIDS.
  With more and more States having financial difficulties with their 
AIDS drug assistance programs, it is important that we provide 
alternative methods of delivering treatment to those with HIV/AIDS who 
may be living in poverty. Most importantly, we will be able to help 
individuals with HIV lead healthier and longer lives. That way they can 
remain active participants in both the community and the workforce and 
improve their chances of living to one day see a cure for their 
illness.
  Mr. President, I ask my colleagues to support this amendment. It is a 
reasonable and responsible placeholder to add to the Senate's budget 
blueprint. I look forward to working with all of you in passing this 
legislation should we enact it in the budget. I think we can greatly 
improve Medicaid services in this way to those with low incomes who are 
afflicted with HIV.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Senator Ensign will now be recognized for 5 minutes. We 
will then go to Senator Wyden, Senator Lieberman, and Senator Dorgan.
  We appreciate very much Senator Ensign limiting his remarks to 5 
minutes.


                           Amendment No. 472

  Mr. ENSIGN. Mr. President, my amendment would impose an income test 
on the wealthiest seniors to ensure that they pay a greater share of 
their Medicare prescription drug coverage.
  A couple of years ago, we had a vote in the Senate that would income-
relate--in other words, means test Medicare Part B, which pays for 
medical services, like doctors' services. Medicare Part D is the part 
that pays for prescription drugs.
  Mr. President, we already means test Medicare Part B. In order to put 
the Medicare program on better financial footing, we should extend the 
existing Medicare Part B income test to the Medicare prescription drug 
program.
  It makes no sense for Bill Gates's father to have his prescription 
drugs paid for by a schoolteacher or a firefighter or a police officer 
or any other middle-income American. This amendment says that a single 
senior, with an annual adjusted gross income over $80,000 and couples 
with annual adjusted incomes of over $160,000 a year would be 
responsible for a greater share of their Medicare Part D premium.
  I have a chart that shows that the vast majority of Medicare 
beneficiaries would not be impacted by this proposal. Almost 96 percent 
of Medicare beneficiaries would not be affected by my amendment. This 
means that only the wealthiest 4.3 percent of seniors enrolled in 
Medicare Part D will pay higher premiums in 2008. Wealthy seniors have 
the means. We should not be burdening our children and grandchildren 
with even further debt by subsidizing wealthy seniors. That is what 
this amendment essentially does. It says that wealthy seniors should 
pay more for the Medicare prescription drug benefit.
  The other side of the aisle says that we should raise taxes on the 
wealthy. This isn't raising taxes. This is getting wealthy seniors to 
pay for a benefit they are receiving that they never paid for. In the 
past, AARP and others have said that we should not means test Medicare.
  In this instance, means testing is fair. Remember, that the Medicare 
prescription drug benefit is a new benefit. Today's seniors did not pay 
into the Medicare program, through payroll taxes, with the promise of a 
prescription drug benefit. What this amendment says is that if you can 
afford to pay higher prices for the Medicare Part D premium, then you 
should. That is, in essence, what this amendment is about. It is about 
fairness. Let's treat middle-income taxpayers of today and the future 
in a fair way by saying wealthy seniors--such as Bill Gates' father, 
such as my father, such as seniors who are in the upper-income 
brackets--pay their fair share instead of dumping this liability on 
future generations of taxpayers and making them pay higher taxes 
because we want to subsidize seniors to the current extent.
  The Medicare Part B program is already means tested. We should 
further means test the Medicare program by requiring Medicare 
beneficiaries who make over $80,000 a year as a single and $160,000 a 
year as a couple, responsible for a greater share of their Medicare 
prescription drug premium.
  To show a little support, the Washington Post, which is not exactly a 
conservative newspaper--and usually isn't in my corner--wrote:

       One worthy proposal, contained in the Bush budget, would 
     have imposed higher Medicare prescription premiums for 
     higher-income beneficiaries . . . Unfortunately an amendment 
     to that effect was defeated in the budget committee.

  That was my amendment.

       If Democrats are serious about dealing with health care 
     entitlement spending, isn't it time for them to demonstrate 
     that?

  I believe it is time to demonstrate that.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I begin by commending Senator Conrad and 
Senator Gregg for doing an exceptionally good job bringing 
extraordinary professionalism and thoughtfulness to this debate, 
particularly because Chairman Conrad and Senator Gregg have focused on 
what are the big issues for this country. Relating to the domestic side 
of the budget--we all know the big international issue is Iraq--the big 
issues are taxes and health care. One of the most attractive parts of 
the Conrad budget is that it lays the foundation for this country to 
look at big fixes to our tax system and to health care.
  If we listen to all the technical lingo that comes up over the course 
of this discussion--pay-go, firewalls, reserve funds; perhaps the staff 
director, who does such a terrific job, Mary Naylor, may know about 
some of the intricacies of these terms--it is a complicated world of 
``budgetese.'' What we do understand, however, are taxes and health 
care. The Bush tax cuts expire at the end of 2010. One of the reasons I 
support the Conrad budget is that it lays the foundation for meaningful 
tax reform. The Presiding Officer certainly hears this across the 
country: The tax system is broken. We now have three changes in the Tax 
Code for every working day. There have been more than 14,000 changes to 
the Tax Code since the last comprehensive tax reform. We are all 
getting ready to do our taxes again. Americans this spring will spend 
more money filling out tax forms than our Government spends on higher 
education. Senator Conrad has pointed out the problem of tax havens and 
tax scams. There is an opportunity, as a result of this budget, to come 
together in a bipartisan way and fix the tax system. We know what needs 
to be done.
  First, we to have clear out all the clutter, the thousands and 
thousands of loopholes that have been added since the last tax reform 
effort. Second, we have to simplify the system. I have brought to the 
Chamber a one-page 1040 form that is in my fair flat tax legislation 
that I will be reintroducing, and I have had a number of good 
conversations with our friend from New Hampshire about it. This is a 
chance for Senators to work together in a bipartisan way. The people at 
Money Magazine, the financial magazine, took my 1040 form and filled 
out their taxes in 15 minutes. It will bring about a dramatic change in 
American taxation. So we clean out the clutter, make the system 
simpler, and then keep progressivity.
  There is a model for the Senate to follow. Senator Gregg and I heard 
a bit about it in the Budget Committee. Senator Grassley and I heard a 
lot about it in the Finance Committee, when then-Chairman Grassley held 
hearings on tax reform during the last session. That is to take those 
principles I outlined--clear out the loopholes, hold

[[Page S3556]]

down the rates, simplify the system, and keep progressivity--and once 
again, because of this budget, fix American taxation in a bipartisan 
way.
  It is worth noting that every witness who came before the Senate 
Finance Committee during the last session to talk about taxation said 
building on the principles of the 1986 Tax Reform Act were the way to 
go. Witnesses came to the Budget Committee earlier this year. They all 
said this was the right direction, to build on the principles of 1986. 
I have indicated to Senator Gregg--and I am interested in working with 
him; he was part of the discussions that took place in the Budget 
Committee--it is worth wrapping this subject up by way of saying the 
budget that is before us now, the Conrad budget. It allows for the 
Senate to come together in a bipartisan way to fix the tax system. This 
is eminently doable.
  The President had a commission on taxation. My one-page 1040 form is 
30 lines long. The President's is 34 lines long. For purposes of 
Government work, the two are equivalent. Democrats and Republicans can 
come together on this, simplify the tax system, do what was done in 
1986 to clean out the clutter, hold down the rates, and keep 
progressivity so that everybody has a chance to get ahead.

  We have heard a lot of talk about class warfare. I am sure the 
Presiding Officer hears a great deal about this topic as he travels 
around the country. What Americans want is a system that gives 
everybody the opportunity to get ahead. That is what we ought to be 
working on. That is what this budget allows.
  In addition to taxes, this legislation allows for a bipartisan effort 
in this Congress to fix American health care, because of the reserve 
fund that is in the bill and constructive efforts that are going on in 
the Senate. In all deference to the Presiding Officer, the 
distinguished Senator from Illinois, and our other colleagues who are 
running for President of the United States, there is a feeling that 
this question of fixing American health care is something that will be 
dealt with in 2009. I am here to tell the Senate, I believe there is a 
good chance the Senate will come together in 2007. Five Democratic 
Senators and five Republican Senators sent a letter to the President, 
an important letter that involved both sides coming together. The 
Republicans who signed the letter said: If you are going to fix health 
care, you have to get everybody covered. If you don't get everybody 
covered, the costs for those who are uninsured get shifted to those who 
are insured. That is a statement about universal coverage. It is about 
100 percent coverage. Our colleague from South Carolina, Senator 
DeMint, and others, have some good ideas about how to accomplish that. 
Republicans moved in a way that is going to allow for a comprehensive 
bipartisan effort to fix health care. Democrats did as well because the 
Democrats who signed the letter said: We need to modernize the 
marketplace. We have a tax system for health care that made sense for 
the 1940s; it doesn't make sense for 2007. The Tax Code for health 
coverage disproportionately rewards the most wealthy and promotes 
inefficiency. That is how the Federal government is spending $250 
billion. The Democrats and Republicans came together and said: We want 
to work in a bipartisan way. Republican Senators such as Trent Lott and 
Mike Crapo and Bob Bennett and Jim DeMint and John Thune, Democrats 
such as Kent Conrad, Ken Salazar, Senator Cantwell, Senator Kohl, and 
myself said: With all due respect to our good friend from Illinois and 
our colleagues who are seeking the highest office in the land, we are 
going to do our best to fix health care in this Congress. We have an 
opportunity with our letter.
  The Presiding Officer knows I have introduced S. 334, the Healthy 
Americans Act. When I introduced that bill, the CEO of Safeway stood 
with me, Steve Burd, with more than 200,000 employees, as did Andy 
Stern, the president of the Service Employees International Union, with 
almost 2 million members. Back in 1993 and 1994, business and labor 
were fighting each other. Now they are coming together. What a 
remarkable transition. In 1993, the business community said: We can't 
afford health care reform. In 2007, the business community is saying: 
We can't afford not to fix health care.
  We have laid a bipartisan foundation in the Conrad budget for 
Democrats and Republicans to come together in this session to fix 
health care.
  An issue came up as we were going forward on the reserve fund that 
highlights that while I think a comprehensive fix of American health 
care can be done, there are going to be challenges along the way. One 
of them is how to deal with the CHIP program, the program that helps 
our youngsters. There is great support on both sides of the aisle for 
the CHIP program. But there have been some in the Senate who have said: 
We have to do CHIP and health reform together. We have to do both 
together, and that is the way to approach it. The universal coverage 
legislation isn't quite ready to go. I am hopeful it will be ready 
before too long and that it will be bipartisan. The Conrad budget makes 
it possible for Senators to come together through a reserve fund for 
universal coverage.
  I also want to make sure that the millions of youngsters who need 
health care now are not forced to wait. We should not deny those 
youngsters justice right now, when the need, as the distinguished 
Senator from Illinois knows, is so great.
  What we said in the budget is that after SCHIP is resolved--and I 
hope it will be very shortly--and we meet those urgent needs of 
millions of youngsters, then we proceed to the question of bipartisan 
efforts to ensure there is comprehensive health reform.
  Those are the two big issues of our time--tax reform and health 
care--that relate to the domestic side of the budget. The Conrad budget 
leaves space for Democrats and Republicans to come together and fix our 
tax system and fix American health care.
  (Mr. BROWN assumed the Chair.)
  Mr. WYDEN. Under the Conrad budget, and the fair flat tax I have 
introduced, we could have a one-page 1040 form. People in the State of 
Ohio--I advise the Presiding Officer, our colleague from Ohio, and we 
are thrilled to have him in the Senate--could be filling out their 
taxes on a one-page form, ensuring progressivity, getting rid of the 
clutter, and holding down rates for everybody. Money magazine, when 
they took that form, said they could do it in 15 minutes. So all of the 
people in the State of Ohio and elsewhere who are pulling together 
their shoe boxes and their receipts right now in order to fill out 
their taxes, they could have an alternative, something based on a 
system we know works because Democrats and Republicans came together in 
1986 in order to have such a tax system.
  The Conrad budget makes it possible for us to enact tax reform even 
before the Bush tax cuts of 2010 expire.
  On the health care side, the same bipartisan effort could occur: 
Democrats and Republicans could come together and fix health care. We 
establish a universal coverage fund, a health care reform fund, in this 
budget. It would allow, for example, for legislation, like the Healthy 
Americans Act which I introduced, that has brought together Andy Stern 
of the Service Employees International Union and Steve Burd, the CEO of 
Safeway, to say: This is where we ought to start. It would allow for 
the Democrats and the Republicans--who signed a letter to the President 
of the United States and said: We want to work with you, Mr. President, 
to fix health care--it would allow for that important effort.
  A number of my colleagues on the Republican side have been extremely 
constructive in working with me and others to get that legislation 
before the Congress--not in 2009, when the popular wisdom suggests we 
will talk about health care, but in this session. But before that 
happens, because of the efforts in the Budget Committee that are 
included in the Conrad budget, we will first protect and expand the 
program that ensures justice for children in health care--the CHIP 
program.
  The CHIP reauthorization will come first. Passing CHIP legislation, 
however, is not going to diminish our efforts to work in a bipartisan 
fashion on overall health reform.
  Both Senator Gregg and Senator Conrad are on the floor now. I just 
want to let both of them know, and our very talented staff director, 
Mary Naylor, that I believe they have brought extraordinary 
professionalism to this effort. They reflect great credit on the Senate 
in terms of how the two

[[Page S3557]]

of them and their staff work on this budget.
  I urge my colleagues to support the budget that is before us 
particularly because it lays the foundation for the Senate to tackle 
the two big domestic issues of our time, taxes and health care. There 
are a lot of issues that come before us. Certainly Iraq is the premier 
issue as it relates to the international front, but the big issues at 
home are taxes and health care. The Conrad budget allows for Democrats 
and Republicans to come together on taxes, as was done in 1986 for a 
system that gave everybody the chance to get ahead.
  I know the Presiding Officer, my friend from Ohio, has heard a lot 
about the whole topic of class warfare and the like. I think the 
Senator from Ohio hears the same thing I hear at home; that everybody 
ought to have the chance to get ahead. Everybody ought to have the 
chance to do it. We could do that with a tax reform program that is 
fair to all. This budget allows it, and it allows for Democrats and 
Republicans to come together on health care as well.
  I urge my colleagues to support the budget. I commend Senator Conrad 
and Senator Gregg.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.


                     Amendment No. 525, as Modified

  Mr. GREGG. Mr. President, I ask unanimous consent that the pending 
amendment, which I understand is the Ensign amendment--is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. GREGG. Be set aside so I can send up a modification that has been 
cleared by the other side relative to the Cornyn amendment, and I ask 
unanimous consent that the Cornyn amendment be modified.
  Mr. CONRAD. Mr. President, reserving the right to object, have we 
seen this modification? Let me just reserve on that until I have 
confirmation.
  Is this a Cornyn amendment which is being modified?
  Mr. GREGG. Cornyn amendment, as modified.
  Mr. CONRAD. That is fine.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 525), as modified, is as follows:

       At the appropriate place insert the following:
       On page 4, line 6, decrease the amount by $2,047,000,000.
       On page 4, line 7, decrease the amount by $4,291,000,000.
       On page 4, line 8, decrease the amount by $6,949,000,000.
       On page 4, line 9, decrease the amount by $9,936,000,000.
       On page 4, line 10, decrease the amount by $13,270,000,000.
       On page 4, line 15, decrease the amount by $2,047,000,000.
       On page 4, line 16, decrease the amount by $4,291,000,000..
       On page 4, line 17, decrease the amount by $6,949,000,000.
       On page 4, line 18, decrease the amount by $9,936,000,000.
       On page 4, line 19, decrease the amount by $13,270,000,000.
       On page 4, line 24, decrease the amount by $2,047,000,000.
       On page 4, line 25, decrease the amount by $4,291,000,000.
       On page 5, line 1, decrease the amount by $6,949,000,000.
       On page 5, line 2, decrease the amount by $9,936,000,000.
       On page 5, line 3, decrease the amount by $13,270,000,000.
       On page 5, line 7, decrease the amount by $2,047,000,000.
       On page 5, line 8, decrease the amount by $6,339,000,000.
       On page 5, line 9, decrease the amount by $13,288,000,000.
       On page 5, line 10, decrease the amount by $23,224,000,000.
       On page 5, line 11, decrease the amount by $36,494,000,000.
       On page 5, line 15, decrease the amount by $2,047,000,000.
       On page 5, line 16, decrease the amount by $6,339,000,000,
       On page 5, line 17, decrease the amount by $13,288,000,000.
       On page 5, line 18, decrease the amount by $23,224,000,000.
       On page 5, line 19, decrease the amount by $36,494,000,000.
       On page 19, line 12, decrease the amount by $2,000,000,000.
       On page 19, line 13, decrease the amount by $2,000,000,000.
       On page 19, line 16, decrease the amount by $4,100,000,000,
       On page 19, line 17, decrease the amount by $4,100,000,000.
       On page 19, line 20, decrease the amount by $6,500,000,000.
       On page 19, line 21, decrease the amount by $6,500,000,000.
       On page 19, line 24, decrease the amount by $9,100,000,000,
       On page 19, line 25, decrease the amount by $9,100,000,000.
       On page 20, line 3, decrease the amount by $11,900,000,000.
       On page 20, line 4, decrease the amount by $11,900,000,000.
       On page 25, line 12, decrease the amount by $47,000,000.
       On page 25, line 13, decrease the amount by $47,000,000.
       On page 25, line 16, decrease the amount by $191,000,000.
       On page 25, line 17, decrease the amount by $191,000,000.
       On page 25, line 20, decrease the amount by $449,000,000.
       On page 25, line 21, decrease the amount by $449,000,000.
       On page 25, line 24, decrease the amount by $836,000,000.
       On page 25, line 25, decrease the amount by $836,000,000.
       On page 26, line 3, decrease the amount by $1,370,000,000.
       On page 26, line 4, decrease the amount by $1,370,000,000.
       At the end of the bill, add the following:

                        TITLE IV--RECONCILIATION

     SEC. 401. SPENDING RECONCILIATION INSTRUCTIONS.

       In the Senate, by June 1, 2007, the Finance Committee shall 
     report to the Senate changes in laws within its jurisdiction 
     sufficient to reduce outlays by $2,000,000,000 in 2008 and 
     $33,800,000,000 for the period of fiscal years 2008 through 
     2012.

  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, Senator Ensign had talked about his 
amendment, and I did not have a chance to, once again, respond. I would 
like to take that opportunity now, while we are waiting for Senator 
Dorgan. Perhaps Senator Gregg would want to respond to what I might 
say. Before we do that, maybe we should enter into an agreement with 
respect to the votes that will occur at 11:30.
  So for that purpose, Mr. President, I ask unanimous consent that at 
11:30 a.m., the Senate proceed to vote with respect to the following 
amendments in the order listed; that there be 2 minutes for debate 
before each vote, equally divided, and that after the first vote, the 
time for the votes be limited to 10 minutes; that no amendments be in 
order to any of the amendments covered under this agreement: the DeMint 
amendment No. 489, the Allard amendment No. 491, the Baucus amendment 
No. 504, and the Cornyn amendment No. 511.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                           Amendment No. 472

  Mr. CONRAD. Mr. President, let me just take a moment now to respond 
to Senator Ensign with respect to the amendment he has offered that 
purports to affect Part D premiums and have higher premiums for those 
Part D Program participants.
  Let me just say, the basic concept, I am in sympathy with. The 
problem is, the budget resolution does not make these policy 
determinations. This is a determination which is made by the Finance 
Committee. That is the committee of jurisdiction. They are the ones who 
have the sole right to make these kinds of policy determinations. The 
Budget Committee, as much as I might want it to, does not have the 
authority to do that. Beyond that, the devil is in the details.
  The notion you can charge higher premiums--certainly there is a way 
to do that, but the Senator has given us no indication of how it might 
be done. When the CMS came before the Finance Committee on this very 
issue--because this is part of the President's budget--they were asked 
how they would go about charging higher premiums under Part D when the 
premiums are not set by the Government, they are set by private drug 
plans.
  As we all know, there are something like 1,500 Medicare drug plans. 
Those plans each have a separate premium they establish. So how is it 
that CMS is going to tell all these private drug plans they are to 
charge higher premiums to higher income people? Those private drug 
plans do not even know the income levels of the people who subscribe to 
their plans. So how is it, in a real-world situation, these plans would 
charge higher drug premiums?
  Again, the Government does not set these premiums. The companies that

[[Page S3558]]

do set them do not have the information upon which to charge higher 
premiums to higher income people because they do not know what the 
income is of the people who subscribe to their plans.
  Further, premiums are important price signals for beneficiaries in 
the Medicare Part D Program. So would we be setting multiple premiums 
for a single Part D plan? Wouldn't that add to the complexity of the 
program? This seems to dramatically complicate the market-based 
approach of Part D.
  I might add, when the administration came before the Finance 
Committee--which is the committee of jurisdiction, which is the 
committee that has the authority to make these kinds of policy 
determinations--they had no answers to any of these questions. They 
just simply had not thought it through. That is one of the reasons why 
we leave these kinds of determinations to the committee of 
jurisdiction, because they have the expertise to make these 
determinations and to weigh the issue. The Budget Committee does not 
and does not have the authority to make these determinations.
  Let me say my own belief is that the notion of income-relating 
Medicare benefits is going to have to be part of a longer term 
solution. But that is not going to be decided on any budget resolution. 
That is just a fact. All of the things Senator Ensign talked about will 
have zero effect on the Finance Committee. What will affect the Finance 
Committee is the number they are given of the resources that are 
available for Medicare.
  The effect of the Cornyn amendment--and the effect of the Ensign 
amendment--will be to reduce the resources that are available to the 
Finance Committee for Medicare. What is that likely to mean? Well, it 
is very clear what it is likely to mean: reductions in reimbursement 
for hospitals, for nursing homes, for hospice care, for ambulance 
services. That is the real-world effect of the Cornyn amendment and the 
Ensign amendment.
  I want to repeat that I got a letter from 43 Senators--11 of them 
Republicans--urging that the budget resolution not cut reimbursement to 
hospitals. I just remind them, if that is something they are serious 
about, then they are going to want to oppose the Cornyn amendment and 
the Ensign amendment because the real upshot of those amendments is to 
reduce funding to the Finance Committee for those very purposes.

  Mr. President, Senator Gregg may like to take the remaining minutes 
here.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Yes, Mr. President. I thank the Senator.
  Mr. President, if you are going to vote against the Ensign amendment, 
you are just simply saying millionaires in this country should not have 
to pay for their drug benefit under Medicare if they are retired and 
have Medicare eligibility; and all millionaires who are retired and 
over a certain age have Medicare eligibility for drug benefits. It is 
that simple.
  To say the Budget Committee should not address this issue has the 
practical effect of saying the Budget Committee should not address 
policy at the Federal level. The Budget Committee, of course, has a 
right to address this issue and should address it. In fact, it is the 
proper place to address it as the initial step. In fact, you could 
argue that if the Budget Committee does not address it, it will never 
get done because the protection that comes from reconciliation, which 
only the Budget Committee can give an authorizing committee--that is, 
the Finance Committee, the Armed Services Committee, or any other 
committee--derives from the Budget resolution, which is authored by the 
Budget Committee. You probably are not going to pass these types of 
changes without reconciliation protection. So that is a straw dog 
argument of the first order.
  This Ensign amendment specifically is an attempt to straighten out 
what was clearly an incorrect decision when Part D was put in place. 
The Medicare trust fund is $32 trillion out of whack. In other words, 
we know it is going to cost $32 trillion--that is with a ``t.''
  Try to understand what that means--$1 trillion. Nobody can understand 
$1 trillion, but it is an amount of money that is staggering. All the 
taxes paid in America since our country became a government, since our 
country was created, amount to something like $42 trillion. The entire 
net worth of America--all your cars, all your stocks, all the houses 
Americans own--represents something like $50 trillion, or maybe it is 
not even that high--$47 trillion.
  So we have a liability, which we have no idea how we are going to pay 
for, of $32 trillion. The interesting part--that is why I want to point 
this out again--is the drug benefit, when it was passed, aggravated the 
liability of the trust fund to the tune of $8 trillion. So of that $32 
trillion--although this chart could be used to explain this--of that 
$32 trillion, $8 trillion of that unfunded liability was generated by 
the drug benefit. It shouldn't have been that high. One way it should 
have been addressed was that we should have had wealthy seniors, 
millionaire seniors, which is what the Ensign amendment does, paying a 
fair amount of the cost of that drug benefit. The Senator from North 
Dakota says: Well, that can't be done. Of course, it can be done. Of 
course, it can be done. There are all sorts of reports that are filed 
on CMS on the cost of reimbursement and how they are structuring these 
insurance plans, and there is no question but it can be done. More 
importantly, it should be done, as a matter of fairness, for working 
Americans who are carrying the burden of seniors.

  I notice Senator Dorgan is here and he wants to talk, so I will 
reserve on that.
  The point is pretty important. If you want to vote for working 
Americans to not have to subsidize millionaire Americans who are 
retired, you are going to want to vote for the Ensign amendment.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. The Senator from North Dakota, Senator Dorgan, is now 
recognized until 11:30.
  Mr. DORGAN. Mr. President, some would believe, and perhaps should 
believe, that this budget issue is very complex, very difficult and is 
hard to resolve. I accept all that. But there ought to be some things 
all of us would agree are very easy to deal with. The slam-dunks, as it 
were; the issues that all of us ought to say: Enough, we are not going 
to put up with this on the revenue side.
  Let me tell my colleagues the taxes I believe we ought to be getting 
that we are not getting. Should we increase them? Absolutely. Those are 
the taxes that would have been paid under normal circumstances but now 
are not being paid because companies have decided they want to run 
their income through a tax-haven country. They want to produce in 
China, sell in America, and run their income through the Cayman 
Islands.
  What is the purpose of that? To avoid paying U.S. taxes. They want 
all the opportunities of being an American company but none of the 
responsibilities to pay the taxes to help this country run, to help 
this country do what it should do.
  So let me go through some of the examples. First, let me show a 
picture of the Ugland House. An enterprising reporter named ``David 
Evans'' did some research. This picture shows a five-story building on 
Church Street in the Cayman Islands that is home to 12,748 
corporations. Now, we have talked about that. I have spoken about it in 
previous months on the floor of the Senate. Why do I do that? Everyone 
understands that in this little building on a quiet street on the 
Cayman Islands, there aren't 12,748 companies. That is a legal fiction 
created by some lawyers to allow companies to use this address to avoid 
paying U.S. taxes. That is what is inside this white building: 
fictional addresses so companies can park income here and avoid paying 
taxes to the United States.
  Should we shut that down? You bet your life we ought to shut it 
down--just like that. It ought not be controversial. Do we not believe 
that everybody ought to pay their fair share of taxes as a part of 
living in this great country? So that is one issue. That, by the way, 
is a current tax scam that exists and is robust. I could go through the 
names of companies that have many subsidiaries in tax-haven countries. 
I mentioned Halliburton the other day. They have 17 subsidiaries in the 
Cayman Islands, a country that has never imposed a corporate income 
tax. They also have two subsidiaries in

[[Page S3559]]

Liechtenstein, for God's sake. But it is not just that company. I could 
go through a whole list of companies that have dozens and dozens of 
subsidiaries they have created in tax-haven countries to avoid paying 
taxes in this country.
  Let me give some other examples of what has been going on. This is 
Dortmund, Germany. This is a picture of a streetcar in Dortmund, 
Germany. It is interesting. Actually, an American company leased the 
streetcars in Dortmund, Germany. Why? Because an American company wants 
to run streetcars in Germany? No, not at all. These belong to city 
government in Germany. An American corporation leased them, and 
immediately leased them back to the German city, and then the company 
is able to claim large tax deductions that lower its tax burden in the 
United States. Here is what the city councilman, Manfred Jostes, said:

       It's absolutely unbelievable. I still to this day can't 
     believe that something like this works.

  A German city councilman trying to think through how is it we can 
lease our streetcars to an American company, they lease them back, we 
get a premium and never lose the opportunity to use them. The only 
thing that is valuable to the American company is they don't have to 
pay taxes because they can claim large deductions relating to this 
streetcar system in Germany.
  It is not just streetcars. How about American companies buying town 
halls? Here is a picture of a town hall in a German city that I can't 
even pronounce. That is a huge, old town hall owned by an American 
company. Why? Because they like town halls in Germany? No. Because they 
want to be able to claim large deductions in an abusive cross-border 
leasing transaction with a German city for the purpose of reducing 
their tax obligations in this country.

  Here is a railroad in Belgium owned by an American company. Because 
they like to run trains in Belgium? No, no. It is about reducing their 
taxes in our country.
  How about an American company buying a German sewer system. This 
one--Wachovia Bank has been pretty aggressive. They bought a German 
sewer system, and they reportedly get $175 million in U.S. tax savings 
by owning a foreign sewer system. The city in Germany--Bochum, Germany, 
doesn't lose the use of its sewer system. The American corporation 
didn't buy a German sewer system because they wanted to use the sewer; 
they bought it because they wanted to lease it back to the German city 
so the U.S. company can depreciate it and reduce its tax burden to the 
U.S. Government. Sale and leaseback. Pretty unbelievable.
  FleetBoston Financial and another investor bought Chicago's 911 
emergency call system. Think of that. Chicago sets up a 911 emergency 
call system, then sells it to two corporations. It is a city-owned 
system. The companies buy it, and lease it back to Chicago. Chicago 
still has it. It is a sale and leaseback transaction by which an 
American corporation can now own and lease back the 911 emergency call 
system in Chicago and be able to depreciate it to save money on their 
tax bill. It is unbelievable to me.
  When are we going to put a stop to this? Well, the Finance Committee 
took a look at these sale and leasebacks and owning foreign sewer 
systems and they said: We will stop it as of this date, but everything 
else is OK. It is not OK with me.
  It is not OK with me that we still have companies that decide they 
want to move their profits to a controlled offshore foreign subsidiary, 
despite the fact that the subsidiary doesn't do any real business 
there.
  It is not OK with me that we still provide large tax breaks to U.S. 
companies that close down a manufacturing plant in this country, fire 
its American workers and move those good-paying jobs to countries like 
China. When U.S. companies close down a U.S. manufacturing plant such 
as Huffy bicycles or Radio Flyer little red wagons, fires its American 
workers and moves those good-paying jobs overseas, U.S. tax law 
actually gives companies like these a large tax break. This is a slap 
in the face of domestic companies that do not get this break. It is a 
slap in the face to hardworking Americans whose jobs are cut and moved 
overseas.
  I have forced the U.S. Senate to vote to repeal this perverse tax 
break several times but it still remains in place. I will offer my 
proposal to eliminate this ill-advised tax subsidy again and again 
until it is gone.
  So I have legislation in three areas that will shut these things down 
and shut them down for good. All of that, I understand, is able to be 
accomplished and has a fit in this budget proposal. Senator Conrad, I 
believe, has in this budget proposal provided room for the three 
proposals I have offered, the kinds of proposals that will finally and 
irrevocably shut down this nonsense.
  Now, we are short of money. The fact is we are short of revenue, so 
how are we going to get it? Are we going to go ask some people who go 
to work all day and take showers at night. You know, they get dirty and 
work hard at a construction site, come home and have to take a shower 
after work rather than before work. We are going to go back to those 
folks and say: You know what. Our Government is short of money. We 
would like you to pay some more in taxes. Or are we going to go to 
these companies who have decided they want to own a sewer system in 
Germany? They want to have a ``fictional'' address on Church Street in 
the Cayman Islands or they want to engage in transfer pricing.
  Transfer pricing schemes, by the way, where companies have their own 
subsidiaries and buy and sell from them and charge things such as $50 
for a tractor tire or $18 for a toothbrush; dramatic overpricing on the 
one hand or underpricing on the other. They use this accounting scam to 
try to demonstrate they have earned no money in the United States and 
therefore owe no taxes in the United States when, in fact, they earned 
a lot of money and transfer-priced those profits out of our country. 
Another scheme. It is wholesale tax avoidance.
  The question for this Senate ought to be now: Are we going to get the 
revenue that is owed to us from some of the largest enterprises? I have 
not named a lot of them. I could name a lot of them, and they should 
have the opportunity to be named so that their shareholders know what 
they are doing.
  It wasn't long ago, by the way, when some of us came to the Senate 
floor and named the companies who decided they wanted to renounce their 
American citizenship. I was a part of that. The late Paul Wellstone was 
a part of that. Paul sat right over there at that desk at the end of 
that row and I remember it as if it were today, the speeches Paul would 
give about this issue.
  The companies have decided: You know what. We want all the benefits 
of being an American. We were chartered here. We exist here. We 
appreciate being here, but we don't want the responsibility of paying 
taxes. That is the origin and the roots of some of this tax avoidance. 
But then, it went even further. There was a time when companies said: 
You know what. We appreciate being an American, but we can save a great 
deal of money if we renounce our American citizenship and move our 
citizenship to, let's say, the Bahamas. My thought was: You want to 
move your corporate citizenship to the Bahamas for the purpose of not 
paying American taxes; then when you get in trouble, why don't you call 
in the Bahamian Navy. My understanding is they have a force of 20 
people. Perhaps I have understated it. But maybe then you ought to call 
the Bahamian military when you get in some trouble, when someone tries 
to expropriate your assets somewhere around the world.

  I come to the floor today because I am flat sick and tired of these 
schemes: The hood ornament on excess here is the schemes by which town 
halls are now for lease or for sale, sewer systems are now for sale. 
Yes, action has been taken to shut some of that down prospectively. 
Yes, that is good. But we still have circumstances under which American 
corporations are owning these assets, depreciating the assets that 
clearly are government assets for one single purpose, and that is to 
avoid paying the taxes that they would otherwise owe to the United 
States of America.
  So then who pays taxes? Well, there is the infamous woman who once 
said: Only the little people pay taxes. She

[[Page S3560]]

sort of sniffed: Only the little people pay taxes. Well, we know who 
does pay taxes. It is people who work, who get a W-2 form which says: 
Here is your income, here is your withholding, here is the obligation 
you have to the United States of America. No flexibility. You work, you 
earn an income, you pay taxes.
  The word ``tax'' is not a dirty word. It is part of the price of a 
civilized society. We build roads. We operate schools. We provide for 
the defense of this Nation. We have a Center for Disease Control. We 
have the National Institutes of Health. We run Bethesda Hospital and 
Walter Reed for the veterans. We do a lot of things that are pretty 
wonderful, and we have built a pretty spectacular country through 
private sector and public sector initiatives. But in order to do that, 
we need a revenue base. Some of the biggest interests in this country 
have decided: We want to be a part of everything America has to offer, 
but we don't want to be a part of the revenue base. We want to find 
ways to own a foreign sewer system or run our income through a 
fictional address in the Cayman Islands. We want a large tax break for 
shutting down a U.S. manufacturing plant and moving those jobs 
overseas. We want to find a way to transfer price so that we are 
pricing safety pins at 100 times their value, or underpricing pianos, 
selling pianos for $40. That sort of transfer pricing is unbelievable. 
That transfer pricing has allowed some corporations to scam the Federal 
Government and avoid paying the taxes they owe this country. So I came 
to the floor today only to say this: Part of the process of a budget is 
to make plans about spending. What is it we need to spend? What do we 
have to do to invest in our country's future to strengthen our country? 
Then also, what kind of revenue can we expect and who shall contribute 
that revenue? Who is responsible for paying taxes? It is not, as the 
socialite sniffed, ``the little people''; it is a responsibility for 
all of us in this country to pay taxes. I think when we see what has 
been going on with tax avoidance on a massive scale--and I see those 
who might criticize Senator Conrad for saying: Let's capture some of 
this in this budget, and they say: Well, that is not real--you bet your 
life it is real.
  You bet your life it is real. This tax avoidance is large, and it is 
growing. We have a responsibility to say to those interests: Pay up. Be 
a part of this country. Being a part of this country is to make money 
in this great economy of ours, but also the responsibility to pay some 
taxes to this country as well.
  As I indicated, I have three provisions that will be provided for as 
a result of the way this budget is structured. I intend to offer those 
as legislation in this coming year. I expect that ought to be a 
noncontroversial portion of the debate in this country. It ought to be 
the first baby step to do what is right.
  I yield the floor.


                           Amendment No. 489

  The PRESIDING OFFICER. Under the previous order, there is 2 minutes 
of debate prior to a vote on amendment No. 489.
  Who yields time?
  The Senator from South Carolina is recognized.
  Mr. DeMINT. Mr. President, it is seldom in this Chamber that we have 
a chance to do something that is truly significant. This amendment 
about Social Security would allow us to do that. Both sides of the 
aisle, Republican and Democrat, for years have been saying we should 
not be spending Social Security on other things, and we should be 
saving it. But we have never done anything about it.
  We have spent nearly $2 trillion in Social Security money on other 
things and have not saved one penny. My amendment allows for Congress 
to open the door and pave the way to stop spending Social Security 
funds and to save the money. Senator Conrad and others have talked 
about the importance of prefunding, or advance funding, our Social 
Security system. This amendment will open the door for us to do that. 
It does not prescribe how we will do it. It does not talk about how the 
funds will be invested. It says they will be taken off the table and 
saved.
  We are not talking about ownership here, private accounts or the 
stock market. This is all open for future discussion. The point of the 
amendment is to open the door and do what we have talked about for 
years: stop spending Social Security on other things and save it for 
the retirees.
  Mr. BYRD. Mr. President, I oppose Social Security privatization--
unequivocally and without question. The language in the DeMint 
amendment, which would encourage the Finance Committee to report 
legislation that would embrace private investment accounts within 
Social Security, is something that I cannot support. Therefore, I 
oppose the DeMint amendment.
  Mrs. FEINSTEIN. Mr. President, I oppose this amendment. There is no 
question that we must reform our entitlement programs and change the 
way our Nation's finances are managed.
  With this in mind, I support the premise behind this amendment: the 
Social Security trust fund should not be used to help reduce the 
Federal budget deficit.
  Hundreds of billions of dollars are being taken from Social Security 
each year just to help pay our bills. Last year, this figure approached 
$200 billion.
  However, this amendment has a fatal flaw. It leaves the door open for 
private Social Security accounts by providing participants with the 
option of ``pre-funding of at least some portion of future benefits.''
  In my view, this is unacceptable.
  This body has already closed the door on the President's ill-
conceived plan for private Social Security accounts.
  The opposition to privatization is well-known:
  Privatizing Social Security does nothing to extend the solvency of 
the program. Transition costs alone, over the first 20 years, would put 
our Nation in greater debt by as much as $4.9 trillion.
  Creating private accounts would mean benefit cuts for retirees, by as 
much as 40 percent.
  Half of all American workers today have no pension or retirement plan 
from their employers. That means Social Security is their only source 
of income.
  It is critical that we protect this safety net.
  We must hold the line on spending, but this has to be done in 
conjunction with a more responsible approach to tax policy.
  The President's tax cuts have already cost more than $1 trillion and 
those enacted will be more than $3 trillion over the next decade.
  When you combine the cost of the tax cuts with spending for the 
military operations in Afghanistan, Iraq, and the global war on 
terror--currently totaling $510 billion--the inevitable result is that 
our Federal budget is squeezed, while our crushing debt grows.
  As we debate this budget resolution, I urge my colleagues to be 
mindful of the long-term impact of our spending decisions.
  The looming crisis with our entitlement programs is clear. We must 
stop raiding the Social Security trust fund to pay our bills. But I 
cannot support this particular amendment which opens the door to 
privatizing Social Security.
  I am firmly committed to opposing any Social Security reform 
proposals which leave the possibility of private accounts on the table. 
And this amendment would do just that. So I must voice my opposition, 
and I ask that my colleagues join me in rejecting this proposal.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, the amendment sounds good. It is nice, 
bland language to provide participants with the benefits of savings and 
investment. But make no mistake about it, this is a stalking-horse for 
Social Security. That is what this is all about.
  The Senator offered virtually the same amendment last year, which had 
the same purpose, and it was defeated 46 to 53, I think. This is 
privatization of Social Security. The American people rejected that; 
they rejected private accounts. It would cause a huge increase in the 
Federal deficit, a massive transfer. This amendment is disguised but 
would do just that.
  It looks good on the surface, but this is an amendment to privatize 
Social Security, create private accounts for Social Security. Senators 
should not be fooled. Again, Senators rejected this

[[Page S3561]]

very same amendment last year by a large vote of 46 to 53. It should be 
rejected this time as well.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. BAUCUS. Thank you, Mr. President.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
489.
  Mr. GREGG. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senator is necessarily absent: the Senator 
from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 45, nays 52, as follows:

                      [Rollcall Vote No. 89 Leg.]

                                YEAS--45

     Alexander
     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCaskill
     McConnell
     Murkowski
     Roberts
     Sessions
     Shelby
     Specter
     Stevens
     Sununu
     Thomas
     Thune
     Vitter
     Warner

                                NAYS--52

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Biden
     Johnson
     McCain
  The amendment (No. 489) was rejected.
  Mrs. MURRAY. I move to reconsider the vote.
  Mr. DODD. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 491

  The PRESIDING OFFICER. Under the previous order, there is now 2 
minutes of debate prior to a vote on the Allard amendment No. 491.
  The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I yield the time to the Senator from 
Colorado.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. ALLARD. Mr. President, the budget spends $88 billion over 5 years 
on ineffective programs and raises taxes by $900 billion to do so. My 
amendment reduces spending by 25 percent on programs rated ineffective 
by OMB's program assessment rating tool. PART has evaluated almost 
1,000 programs accounting for 96 percent of all Federal spending. Only 
26 are rated ineffective in discretionary spending.
  Chairman Conrad will say the budget resolution cannot tell 
appropriators how to implement the savings. My amendment simply allows 
the appropriators, with a great deal of flexibility, to find those 
savings that are proven to exist. It also tells agencies we expect 
results from programs we fund.
  If my colleagues vote for this amendment, we will save the taxpayers 
$18 billion over 5 years and pay down the Federal debt by $18 billion. 
I believe if we cannot trim $4 billion out of a $2.9 trillion budget on 
ineffective programs, we cannot honestly tell taxpayers we are serious 
about fiscal responsibility.
  I urge my colleagues to support the amendment. I ask for the yeas and 
nays.
  The PRESIDING OFFICER. The Senator's time has expired.
  Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, first, the budget resolution does not make 
these individual policy determinations. The effect of this amendment 
will simply be to cut domestic discretionary spending $18 billion. 
Understand the programs that have been identified in the PART program 
are results not proven. If this did apply as the Senator suggests, here 
are programs affected: Border Patrol, Coast Guard search and rescue, 
high-intensity drug trafficking areas, LIHEAP, rural education, child 
abuse prevention, and treatment.
  If there is a problem in those programs, they ought to be fixed. We 
ought not to be cutting Border Patrol, Coast Guard search and rescue, 
high-intensity drug trafficking areas, LIHEAP, rural education, and the 
rest.
  I urge a ``no'' vote.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
491 offered by the Senator from Colorado, Mr. Allard.
  Mr. GREGG. Mr. President, I ask unanimous consent that this be a 10-
minute vote, and the following votes be 10-minute votes.
  The PRESIDING OFFICER. That order has been granted.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senator is necessarily absent: the Senator 
from Arizona (Mr. McCain).
  The PRESIDING OFFICER (Mr. Tester). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 33, nays 64, as follows:

                      [Rollcall Vote No. 90 Leg.]

                                YEAS--33

     Allard
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Sessions
     Shelby
     Sununu
     Thomas
     Thune
     Vitter

                                NAYS--64

     Akaka
     Alexander
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coleman
     Collins
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Tester
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Biden
     Johnson
     McCain
  The amendment (No. 491) was rejected.
  Mr. SPECTER. Mr. President. I voted against the Allard amendment 
because I am not prepared to accept the blanket assessment by OMB as to 
which programs are effective or not effective. In addition, I don't 
think it is sensible to eliminate only 25 percent of the ineffective 
programs. In my judgment, Congress should make the assessment as to 
which programs are effective or ineffective and then Congress should 
act to eliminate all of the ineffective programs.


                     Amendment No. 504, as Modified

  The PRESIDING OFFICER. Under the previous order, there are now 2 
minutes of debate prior to a vote in relation to the Baucus amendment, 
No. 504. Who yields time?
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, this request has been cleared with the two 
managers and the ranking members of the Finance Committee. I ask 
unanimous consent to modify my amendment No. 504 with the text I send 
to the desk.
  The PRESIDING OFFICER. The amendment is so modified.
  The amendment is as follows:

       On page 48, line 19, before ``The'' insert the following:
       (a) Priority.--The Senate establishes the following 
     priorities and makes the following findings:

[[Page S3562]]

       (1) The Senate shall make the enactment of legislation to 
     reauthorize the State Children's Health Insurance Program 
     (SCHIP) a top priority for the remainder of fiscal year 2007, 
     during the first session of the 110th Congress.
       (2) Extending health care coverage to the Nation's 
     vulnerable uninsured children is an urgent priority for the 
     Senate.
       (3) SCHIP has proven itself a successful program for 
     covering previously uninsured children.
       (4) More than 6 million children are enrolled in this 
     landmark program, which has enjoyed broad bipartisan support 
     in Congress, among our Nation's governors, and within state 
     and local governments.
       (5) SCHIP reduces the percentage of children with unmet 
     health care needs.
       (6) Since SCHIP was created, enormous progress has been 
     made in reducing disparities in children's coverage rates.
       (7) Uninsured children who gain coverage through SCHIP 
     receive more preventive care and their parents report better 
     access to providers and improved communications with their 
     children's doctors.
       (8) Congress has a responsibility to reauthorize SCHIP 
     before the expiration of its current authorization.
       (b) Reserve Fund.--

  Mr. BAUCUS. Mr. President, this amendment basically confirms our 
commitment to reauthorize the Children's Health Insurance Program by 
September 30. We have to get this authorized quickly. It is the 
statement of the Senate that we will do so; otherwise, we lose a large 
number of dollars. We lose about $25 billion from the budget baseline 
if we do not get this done. It will wreak financial havoc on States if 
we do not get this done.
  The program has reduced the rate of uninsured children by one-fifth. 
It is a great opportunity, frankly, for everyone in this body to say 
``yes'' to kids. Yes, we are going to make sure our kids are covered 
with insurance. We are going to expand the Children's Health Insurance 
Program. I urge all Senators to vote yes.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, we support the amendment on our side. We 
will be happy to do it by a voice vote if the Senator wants to, but I 
suspect we are going to have a rollcall vote?
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, we can voice vote this as far as I am 
concerned. There was a request on my side. I don't know if there is 
anymore. I don't see anybody waving his hand or her hand, so it is fine 
with me.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
as modified.
  The amendment (No. 504), as modified, was agreed to.
  Mr. DURBIN. Mr. President, I move to reconsider the vote.
  Mr. CRAIG. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. GRASSLEY. Mr. President, the Senate just voted on an amendment 
that makes a good first step to putting kids first in SCHIP. However, 
it is all well and good to say we are putting kids first. But the 
amendment we just voted on is not worth the paper it is printed on if 
the Senate does not take the next step and back up these words with 
policy.
  The Cornyn amendment represents actual kids-first policy. I ask 
Senators to support the needed next step to putting kids first. Support 
the Cornyn amendment.


                           Amendment No. 511

  Mr. GREGG. I understand the next amendment will be that of Senator 
Cornyn, dealing with the SCHIP issue. Is that correct?
  The PRESIDING OFFICER. That is correct, amendment No. 511. The 
Senator from Texas is recognized.
  Mr. CORNYN. Mr. President, my amendment establishes a deficit-neutral 
reserve fund and the finance committee to report a bill that 
reauthorizes SCHIP, a program that covers kids first. It emphasizes 
helping low-income kids, increases State flexibility, and eliminates 
waste, fraud, and abuse. This vote is the Senate's opportunity to make 
sure the original intent of the SCHIP program remains intact. This is 
about helping low-income kids first.
  I yield the floor.
  Mr. SPECTER. Mr. President, I seek recognition to outline my 
opposition to the Cornyn amendment, Senate amendment No. 511 to the 
fiscal year 2008 budget resolution. While I support reducing the cost 
of health care, I have concerns with reducing health care insurance 
coverage for children in low-income families.
  The Cornyn amendment sought to ensure that only children in families 
under 200 percent of Federal poverty level--$27,380 for a single parent 
or $41,300 for a family of four--should receive State Children's Health 
Insurance Program, SCHIP, health coverage. This would have decreased 
the recent SCHIP change to Pennsylvania's Cover All Children program. 
The Pennsylvania Cover All Children program, which was approved by the 
Centers for Medicare and Medicaid Services, allows SCHIP funds to be 
used to provide insurance to children in families below 300 percent of 
the Federal poverty level--$41,070 for a single parent or $61,950 for a 
family of four.
  The authorization for SCHIP is scheduled to expire this year. I look 
forward to working with my colleagues to reauthorize and improve this 
important program.
  Mr. WHITEHOUSE. Mr. President, I wish to speak in support of the 
SCHIP amendment offered by my colleagues, Senators Baucus and 
Rockefeller, and to respectfully oppose the amendment of my colleague 
Senator Cornyn. I also want to praise my senior Senator, Jack Reed, and 
thank him for his tireless commitment to providing vital health care 
coverage to the children of Rhode Island for so many years.
  Our State of Rhode Island has one of the lowest rates of uninsured 
adults and children in the Nation. This fact is both encouraging and 
troubling. It is encouraging because insured children are more likely 
to receive medical care for common conditions like asthma and ear 
infections. It is encouraging because insured children have higher 
school attendance rates and higher academic achievement. It is 
encouraging because insured individuals are more likely to receive 
preventive care like mammograms and other cancer screenings.
  But Rhode Island's uninsured rates trouble me because, even as one of 
the most well-insured States in the Nation, my State is still home to 
nearly 120,000 uninsured Americans. And 20,000 of those are children. 
Even as a leader in insuring children and adults in this Nation, we are 
still far from where we need to be, and we are going in the wrong 
direction. Rhode Island witnessed a 4.2-percent increase in the number 
of uninsured from 2000 to 2004, coupled with a 7.3-percent drop in 
those covered by employer-sponsored plans.
  Senator Cornyn's amendment proposes to limit the SCHIP program to 
children under 200 percent of the Federal poverty line. In Rhode 
Island, that would have meant that almost 2,700 children would not have 
been able to access health insurance using SCHIP funds during fiscal 
year 2006. And this number does not even include children under the age 
of 8 because Rhode Island has covered those children through its 
Medicaid Program up to 250 percent of poverty.
  For my colleagues from larger States, 2,700 might not sound like that 
many children. But the Cornyn amendment would potentially result in a 
7.5-percent increase in the uninsured rate for children in our State. 
This is unacceptable. And it is particularly unacceptable in light of 
the fact that 10.1 percent of Rhode Island children under 250 percent 
of poverty are eligible but not enrolled in Medicaid or SCHIP.
  I also oppose the Cornyn amendment because I do not believe that we 
should use SCHIP reauthorization as a vehicle to limit coverage of 
parents. First, covering parents is one of the most effective ways to 
cover children. When States cover parents, children participate in the 
Medicaid Program at higher rates, they have more contact with medical 
professionals, and receive more preventive care. Second, kicking 
parents off SCHIP only increases the number of uninsured individuals in 
our States, and forces those individuals to seek coverage in more 
expensive settings like hospital emergency rooms. Lastly, the Bush 
administration has repeatedly approved waivers to expand insurance to 
parents of children covered under State Medicaid and SCHIP programs. 
Covering parents is a value shared on both sides of the aisle.
  As we move forward with this budget, and move forward with the 
ongoing health care debate, we should not be looking for ways to limit 
the coverage that States can offer their residents,

[[Page S3563]]

but ways to expand coverage to new and wider populations. For savings, 
we should be looking at reforms that improve quality and reduce cost, 
not throwing kids off health care programs. SCHIP was created in an 
effort to provide health insurance coverage to vulnerable children. In 
the spirit of this program, reauthorization should provide us with an 
opportunity to expand the tools States can use to cover the uninsured, 
not as an opportunity to hurt those Americans who need help the most.
  I want to make a particular point to thank Chairman Conrad and his 
staff for their superb work throughout this budget process, and for the 
chairman's continued support of children's health insurance programs.
  The PRESIDING OFFICER. Who yields time? The Senator from Montana.
  Mr. BAUCUS. Mr. President, we voted to affirm our commitment to the 
program. The amendment offered by the Senator from Texas undermines the 
current program. Many Senators want to expand the Children's Health 
Insurance Program. This undermines it. It reduces the current program 
and wreaks havoc with the States. They will lose their flexibility that 
they currently have in administering the program. It puts a huge 
financial burden also on States that otherwise want to provide 
resources for the kids in their States.
  I urge strongly we do not adopt the Cornyn amendment because it 
undermines the current program. It is a step backward, not forward.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Mr. CONRAD. Mr. President, I ask for the yeas and nays
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The clerk will call the roll.
  The assistant journal clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. the following Senator is necessarily absent: the Senator 
from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 38, nays 59, as follows:

                      [Rollcall Vote No. 91 Leg.]

                                YEAS--38

     Alexander
     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Roberts
     Sessions
     Shelby
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--59

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coleman
     Collins
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Biden
     Johnson
     McCain
  The amendment (No. 511) was rejected.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I move to reconsider the vote and to lay 
that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. REID. Mr. President, there has been some confusion as to how many 
votes we are going to have during this period of time. There will be 
one more recorded vote. I think in fairness to some people on both 
sides of the aisle, we will make it a 15-minute vote rather than a 10-
minute vote, because some people left thinking that was the last vote.


                     Amendment No. 525, As Modified

  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. CORNYN. Mr. President, as the Budget chairman has said 
repeatedly, this does not direct the Finance Committee how to do this 
or to consider specific proposals. But I do believe the reforms the 
President has put on the table would be a good place to start looking. 
We know a fiscal tsunami is coming. We all talk about the wall of debt, 
but now is the time to act by passing this amendment. I urge my 
colleagues to support this amendment.
  The PRESIDING OFFICER. Without objection, amendment 525 will be the 
pending question.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, this amendment should be opposed very 
simply because the savings, the $34 billion the Senator from Texas 
prescribes, could not be used as offsets to help accommodate other 
programs. Let's take SCHIP, for example. Because the way the Senator's 
amendment is written, as reconciliation instructions, the $34 billion 
could not be offset. That would be straight deficit reduction.
  We are going to need, frankly, some wiggle room in Medicare programs 
to find revenue to pay for CHIP and for other Medicare adjustments. It 
makes no sense to straight cut $34 billion out of Medicare alone, in 
itself a deep cut, without some way of shoring up some of the needs we 
are going to have, especially SCHIP. I strongly oppose this amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
525, as modified. The yeas and nays are ordered.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senator is necessarily absent: the Senator 
from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 23, nays 74, as follows:

                      [Rollcall Vote No. 92 Leg.]

                                YEAS--23

     Alexander
     Allard
     Bond
     Bunning
     Burr
     Coburn
     Cochran
     Corker
     Cornyn
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Gregg
     Hagel
     Hatch
     Inhofe
     Lott
     Martinez
     McConnell
     Sununu
     Vitter

                                NAYS--74

     Akaka
     Baucus
     Bayh
     Bennett
     Bingaman
     Boxer
     Brown
     Brownback
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Coleman
     Collins
     Conrad
     Craig
     Crapo
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Harkin
     Hutchison
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Tester
     Thomas
     Thune
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Biden
     Johnson
     McCain
  The amendment (No. 525), as modified, was rejected.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, did we move to reconsider?
  The PRESIDING OFFICER. We did not.
  Mr. CONRAD. Mr. President, I move to reconsider the vote, and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. CONRAD. Mr. President, have we reconsidered and moved to lay on 
the table all of the votes this morning?
  The PRESIDING OFFICER. There is one----
  Mr. CONRAD. Let's have a blanket move to reconsider and move to lay 
on the table of the votes for this morning.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S3564]]

  Mr. CONRAD. Mr. President, I ask unanimous consent that the Sanders 
amendment be considered from now until 1:30; that then Senator Enzi be 
recognized for an amendment until 2 o'clock; that Senator Carper be 
recognized at 2 o'clock; that at 2:15, Senator Coleman be recognized--
--
  Mr. GREGG. For an amendment.
  Mr. CONRAD. For an amendment; that at 2:45, Senator Lincoln be 
recognized for an amendment; and that at 3:15, Senator Kyl be 
recognized for an hour equally divided on his amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. CONRAD. Further, as part of that unanimous consent, I ask 
unanimous consent that the Kyl amendment be voted on before 11 o'clock 
tomorrow, at a time to be determined by the two leaders; that there be, 
before the Kyl amendment, 6 minutes evenly divided; that there be a 
side-by-side amendment reserved on the Democratic side with the Kyl 
amendment, and that the same rule pertain that there be 6 minutes 
equally divided.
  Mr. GREGG. Further, if the Senator will yield?
  Mr. CONRAD. I am happy to yield to my colleague.
  Mr. GREGG. That there be side-by-sides reserved for all amendments 
that are offered in this group, and that the initial amendment be the 
first amendment voted on.
  Mr. CONRAD. Let me just understand that final point.
  Mr. GREGG. So the offered amendment would be the first amendment 
voted on in the side-by-sides.
  Mr. CONRAD. That the Sanders amendment would be the first amendment; 
is that what the Senator is saying?
  Mr. GREGG. No. If there is a side-by-side, it would be the 
understanding that the initial amendment, the underlying amendment, 
would be the first one voted on.
  Mr. CONRAD. No, that would not be typically the order.
  Mr. GREGG. It would be an amendment like a second degree.
  Mr. CONRAD. The second degree would be voted on first. So our 
amendment would be, in effect, the second degree, and so in the regular 
order it would be voted on first.
  Mr. GREGG. OK. But side-by-sides reserved for all the amendments.
  Mr. CONRAD. Yes, side-by-sides reserved for all the amendments. And 
votes would be on or in relationship to the subjects that we have 
identified here.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from North Dakota.


                           Amendment No. 502

  Mr. CONRAD. Mr. President, I would like to now take up Grassley 
amendment No. 502 in regard to the Smithsonian. We have agreement from 
Senator Grassley and others to take that amendment on a voice vote.
  The PRESIDING OFFICER. Is there objection?
  Without objection, the amendment is the pending question.
  Is there further debate on the amendment?
  If not, the question is on agreeing to the amendment.
  The amendment (No. 502) was agreed to.
  Mr. CONRAD. Mr. President, I thank the Chair.
  Mr. President, if the Presiding Officer could read back to me the 
final timing for the unanimous consent agreement we have just entered 
into--the GOP amendment, which is the Kyl amendment, would be offered 
at 3:15 this afternoon, and that would be an hour equally divided, and 
that would leave us at 4:15?
  The PRESIDING OFFICER. That is correct.
  Mr. CONRAD. Mr. President, I ask my colleague if we could then agree 
for 10 minutes equally divided on the Bayh amendment.
  Mr. GREGG. Mr. President, we have not seen the Bayh amendment.
  Mr. CONRAD. We will get a copy, and perhaps we can work that out.
  Mr. President, I yield to Senator Sanders.
  The PRESIDING OFFICER. The Senator from Vermont.


                           Amendment No. 545

  Mr. SANDERS. Mr. President, I send an amendment to the desk which has 
been shared with the other side.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Vermont [Mr. Sanders], for himself, and 
     Ms. Mikulski, proposes an amendment numbered 545.

  The amendment is as follows:

 (Purpose: To restore the top marginal tax rate to pre-2001 levels on 
taxable income in excess of $1 million and use the increased revenue to 
 increase funding for the Individuals with Disabilities Education Act)

       On page 3, line 11, increase the amount by $10,300,000,000.
       On page 3, line 12, increase the amount by $14,600,000,000.
       On page 3, line 13, increase the amount by $14,800,000,000.
       On page 3, line 14, increase the amount by $4,500,000,000.
       On page 3, line 20, increase the amount by $10,300,000,000.
       On page 3, line 21, increase the amount by $14,600,000,000.
       On page 3, line 22, increase the amount by $14,800,000,000.
       On page 3, line 23, increase the amount by $4,500,000,000.
       On page 4, line 6, increase the amount by $10,300,000,000.
       On page 4, line 7, increase the amount by $14,600,000,000.
       On page 4, line 8, increase the amount by $14,800,000,000.
       On page 4, line 9, increase the amount by $4,500,000,000.
       On page 4, line 15, increase the amount by $10,300,000,000.
       On page 4, line 16, increase the amount by $14,600,000,000.
       On page 4, line 17, increase the amount by $14,800,000,000.
       On page 4, line 18, increase the amount by $4,500,000,000.
       On page 10, line 9, increase the amount by $10,300,000,000.
       On page 10, line 10, increase the amount by 
     $10,300,000,000.
       On page 10, line 13, increase the amount by 
     $14,600,000,000.
       On page 10, line 14, increase the amount by 
     $14,600,000,000.
       On page 10, line 17, increase the amount by 
     $14,800,000,000.
       On page 10, line 18, increase the amount by 
     $14,800,000,000.
       On page 10, line 21, increase the amount by $4,500,000,000.
       On page 10, line 22, increase the amount by $4,500,000,000.

  Mr. SANDERS. Mr. President, this amendment is being cosponsored by 
Senator Mikulski of Maryland. This amendment is about keeping the 
promises the Federal Government made to the people of our country 32 
years ago. It is about keeping our word to the children of this 
country, especially those with disabilities. It is about keeping our 
word to the property tax payers of this country, whose property taxes 
in Vermont and throughout this country are going up and up and up.
  When Congress passed the Individuals with Disabilities Act in 1975, 
under the leadership of Senator Tom Harkin, that legislation said the 
Government would provide up to 40 percent--40 percent--of the national 
average per-pupil expenditure for special education. Unfortunately, 
however, the Federal Government has not kept its word. Today, its 
contribution stands at barely 17 percent. The promise was 40 percent; 
the reality is 17 percent.
  In other words, the Federal Government passed legislation doing the 
right thing with regard to our children in 1975, but it has not 
followed through in terms of the kind of funding it promised, and 
school districts all over this country and children all over this 
country are suffering from that lack of action.
  When Members of Congress on both sides of the aisle talk about 
unfunded mandates, the inadequate funding for special education is the 
poster child of that problem. We told school districts we would fund 
special education at 40 percent, and we are funding it at 17 percent. 
That is wrong. That speaks poorly of Congress.
  In Vermont, and I suspect all over this country, school districts are 
demanding we rectify that problem, that we keep the promise made so 
many years ago.
  When the Federal Government does not keep its word, school districts 
in my State, school districts in the Presiding Officer's State and 
throughout this country are forced to do one of two things: either they 
do not provide the quality of special education care the special needs 
kids require--and that is wrong--or else their limited budgets require 
them to cut back on other educational programs in order to fund the 
expensive needs of special eduction

[[Page S3565]]

kids. So what ends up happening is we take money from second languages, 
we take money from athletics, we take money from arts, and we put it 
into special education, and all of the children suffer as a result of 
that.
  The third option facing school districts--which certainly is taking 
place in Vermont, and I expect all over this country--is that school 
districts are forced to ask for higher and higher property taxes. Those 
property taxes are becoming so high in areas of this country that 
people who have lived in their homes for their entire lives are now 
being forced to leave their homes.
  The property tax is a regressive form of taxation. It hits working 
families very hard and unfairly. It hits senior citizens unfairly. More 
and more communities around this country are forced to raise property 
taxes, which is putting an increased burden on middle-class families.
  The amendment I am offering, which is cosponsored by Senator Mikulski 
of Maryland, is a simple and straightforward amendment. At a time when 
the wealthiest people in this country are becoming wealthier, at a time 
when the wealthiest 1 percent have not had it so good since the 1920s, 
at a time when property taxes on the middle class are soaring all over 
this country, at a time when school districts are being forced to spend 
more and more on special education, this amendment increases funding 
for special education by $44.2 billion over the next 5 years.
  It finally begins to do what this Congress should have done years and 
years ago. It adequately funds special education. It begins to move 
away from the unfunded mandate that so many communities around our 
country are suffering from.
  This amendment raises the $44.2 billion by rescinding the 2001 income 
tax cuts that were given to millionaires. In other words, it would 
restore the top income tax rate to 39.6 percent on taxable income 
exceeding $1 million per year.
  This amendment would only apply to millionaires. Those are the only 
people who would be asked to pay more because we would be rescinding 
the 2001 income tax reductions that President Bush and the Congress 
gave to them.
  While we ask the wealthiest people in this country to pay a little 
bit more, what we would be doing is lowering property taxes for the 
middle class all over this country and improving the quality of 
education that our children receive.
  By using this revenue for special education, as this amendment does, 
the Federal Government could begin to live up to its 40 percent 
commitment in fiscal year 2009. Not only would we be providing a much 
needed boost for children with disabilities, we would also be providing 
property tax relief to so many families throughout this country who are 
in desperate need of that relief.
  The bottom line of this amendment is pretty simple. It has a lot to 
do about which side we consider ourselves to be on. We hear a lot of 
rhetoric in the Congress about the importance of education. The 
Presiding Officer understands the importance of education. I understand 
the importance of education. I suspect every Member of the Senate 
understands the need to improve the quality of education in this 
country. This is an amendment about improving education for all of our 
children.
  We hear a lot of discussion in the Senate and the Congress about the 
growth of special education needs among our kids--whether it is autism, 
ADD, or other disorders. This is an amendment which addresses in a very 
serious way the needs of special education.

  We hear a lot about unfunded mandates and the burden of higher and 
higher property taxes on working families all over this country. This 
amendment, if passed, takes a giant step forward in rectifying this 
unfunded mandate and lowering property taxes. Mostly, though, this 
amendment is about Congress keeping its word, keeping the promise it 
made so many years ago. We made a promise to school districts all over 
this country that if they mainstreamed kids into public schools, 
Congress would provide 40 percent of the cost. We have not kept that 
promise. We have given hundreds of billions of dollars in tax breaks to 
millionaires and billionaires, but we have not reached out to school 
districts to help them with the cost of special education, the result 
being higher and higher property taxes. The time is long overdue for 
the Congress to keep the promises it made with regard to special 
education, and this amendment does just that.
  Mr. President, I yield the floor.
  Mr. GREGG. Mr. President, what is the time situation?
  The PRESIDING OFFICER. The Senator from New Hampshire has 12 minutes. 
The Senator from Vermont has 2 minutes.
  Mr. GREGG. Mr. President, the amendment of the Senator from Vermont, 
the Senator from across the river, as we say in New Hampshire, a 
Senator from the State where all our bad weather comes from, actually--
the sunshine comes from New Hampshire--this amendment raises taxes by 
something like $44 billion. The purpose of it is to spend that money on 
special education.
  Special education is an important program. In fact, it is so 
important that if you look at the priorities this administration has 
put in place in the education accounts since it came into office, it 
has increased special education funding by I think a factor that is 
three times greater--I believe that is the number--than the Clinton 
administration increased special education funding. This 
administration, in the first year in office, jumped special education 
by $1 billion. The next year, it jumped special education funding by 
another $1 billion, and so on and so on. The increase in special 
education funding under this administration has been the largest 
increase of any administration, both percentage-wise and in dollars, 
over its term.
  But to raise taxes $44 billion is a pretty big tax increase. You can 
throw out the word ``millionaire.'' What we are talking about here are 
small businesspeople. Eighty-three percent of the people who would be 
hit by the top rate are small businesspeople. It is all rates.
  He is talking about repealing the President's tax cuts that have 
generated so much economic activity around this country and have 
created a revenue stream into this Government which exceeds the 
historical norm. In other words, even though it is counterintuitive to 
some folks, and especially to some of our editorial boards, such as The 
New York Times, we have actually seen an increase, a very significant 
increase in revenues by reducing the tax rates in this country so they 
are fair, so that people are willing to go out and take risks with 
their dollars, be entrepreneurial and, as a result, create jobs and 
economic activity, which is translated into income for the Federal 
Government.
  In fact, in the last 3 years, we have received more income, larger 
increases in income in Federal revenue than at any time in our history, 
huge jumps in income, and we are now receiving more income as a Federal 
Government than is the historic norm--18.5 percent of gross national 
product in income to the Federal Government. The norm is usually 18.2 
percent.
  In addition, these tax rates which were put in place which are 
repealed under this proposal have created a more aggressive tax system. 
During the Clinton years, the top 20 percent of wage-earners--of income 
tax payers in this country paid about 81 percent of the Federal taxes. 
Today, that same top 20 percent--they are not the same people, because 
the genius of our society is that people go in and out of that group 
depending on how capable they are. Some people make money and get in; 
some people lose money and go out. But that same group, that top 20 
percent, is paying almost 85 percent of the total income tax burden. So 
it is more progressive at the top end than it was during the Clinton 
years.
  Even though the tax rates may be lower, the generation of income 
tax--people who are paying it--is more progressive, and at the lower 
end, the bottom 40 percent of the people who pay income taxes or who 
are subject to income tax in this country--they don't actually pay the 
money; they get money back from the earned-income tax credit--that 
group of individuals, the 40 percent there, is getting twice as much 
back under the earned-income tax credit as they did in the Clinton 
years. So at the top, you have people paying more. At the bottom, you 
have people getting more back. That is

[[Page S3566]]

called progressivity. So we are getting more revenue. We are getting 
historic highs in revenue. We are beyond the traditional amount we get 
in revenue, and we have a more progressive tax system.
  What is the Senator from Vermont suggesting? Increase taxes by $44 
billion.
  Well, I have referred to this budget from the other side of the aisle 
as tax-and-spend. Very simply, it is a tax-and-spend budget. It adds 
new spending. It adds $900 billion in new taxes. It increases the debt 
by $2.2 trillion. It does nothing to control spending, either on the 
discretionary side or on the mandatory side.
  If you pass this amendment, I suppose you just supersized it in the 
tax size. You can go into McDonald's and you can get a regular Coke. 
This is sort of a ``regular'' Democratic tax-and-spend bill. There are 
a lot of new taxes--$900 billion--but that is sort of out of the 
mainstream of the party. But the Senator from Vermont has decided we 
are going to ``supersize'' this tax increase to $44 billion. So, 
obviously, we oppose the amendment.

  This concept of expanding funding to IDEA is a good concept, but it 
should come within the ordering of priorities. It shouldn't come by a 
dramatic tax increase. In fact, this President has shown he is going to 
reorder priorities to accomplish that during his term in office.
  Mr. President, I reserve the remainder of our time at this point.
  Mr. SANDERS. Mr. President, I always enjoy dialoguing with my 
neighbor from New Hampshire. Let me make just a few points. I think he 
understands, because if my son who lives in Claremont, NH, is accurate, 
what he is telling me is what Vermonters are telling me--that property 
taxes in New Hampshire and in Vermont and all over this country are 
soaring.
  My friend from New Hampshire says the President and Congress are 
addressing special education needs, more money is going into it. But 
the reality is that for the last 3 years, the percentage of Federal 
contributions for special education has gone down. They were at a high 
of 18 percent. They are moving downward. They are now at 17 percent.
  My friend can talk about raising taxes, and let me concede that he is 
right. We are raising taxes on the upper three-tenths of 1 percent 
because 99.7 percent of the American people would not see any increase 
in Federal taxes as a result of this amendment. Tens of millions of 
American families would see a reduction in their property taxes.
  I believe that at a time when the wealthiest 1 percent have never had 
it so good, when we are seeing that, according to Forbes magazine, the 
collective net worth of the wealthiest 400 Americans--400--increased by 
$120 billion last year to $1.25 trillion, it is time for this Congress 
to start worrying about middle-class families that can't afford higher 
and higher property taxes, about kids with disabilities who deserve 
quality education, about all of our children who deserve an education, 
and not worry about the upper three-tenths of 1 percent.
  If my friend from New Hampshire says I am raising taxes on the upper 
three-tenths of 1 percent, people who are millionaires and 
billionaires, I concede that point. I am. That is the right thing to 
do.
  The PRESIDING OFFICER. Who yields time?
  Mr. GREGG. Mr. President, at this point, I believe Senator Enzi is 
ready to go with his amendment. Rather than tie him up and since he was 
also the chairman of the HELP Committee, he may have some thoughts on 
this issue of how we are doing on special education. But in any event, 
so he can get started, I yield the remaining time so Senator Enzi can 
go forward.
  Mr. CONRAD. Mr. President, before the Senator departs, I wish to 
again thank him for his unfailing courtesy as we work through this 
budget resolution. I appreciate very much all of the constructive help 
he has provided as we have tried to get this done. I thank him very 
much.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.


                           Amendment No. 497

  Mr. ENZI. Mr. President, I call up Senate amendment No. 497.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wyoming [Mr. Enzi] proposes an amendment 
     numbered 497.

  Mr. ENZI. I ask unanimous consent that the reading of the amendment 
be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To establish a 60 vote point of order for legislation that 
         creates unfunded mandates on small business concerns)

       At the end of title II, insert the following:

     SEC. 2__. RESTRICTIONS ON PRIVATE SECTOR MANDATES.

       (a) Point of Order.--It shall not be in order in the Senate 
     to consider any bill, joint resolution, motion, amendment, or 
     conference report that would increase the direct costs of 
     private sector mandates on small business concerns (as that 
     term is defined in section 3 of the Small Business Act (15 
     U.S.C. 632)) by an amount that exceeds the threshold provided 
     in section 424(b)(1) of the Congressional Budget Act of 1974 
     (2 U.S.C. 658c(b)(1)).
       (b) Waiver and Appeal.--Subsection (a) may be waived or 
     suspended in the Senate only by an affirmative vote of three-
     fifths of the Members, duly chosen and sworn. An affirmative 
     vote of three-fifths of the Members of the Senate, duly 
     chosen and sworn, shall be required to sustain an appeal of 
     the ruling of the Chair on a point of order raised under 
     subsection (a).

  Mr. ENZI. Mr. President, my amendment is very simple. It establishes 
a 60-vote threshold for legislation that imposes unfunded mandates on 
small businesses as determined by the Small Business Administration, 
when it is in excess of $131 million, which is established in the 
Unfunded Mandates Reform Act. As my colleagues may know, small 
businesses make up 99\7/10\ percent of all U.S. employers and employs 
50 percent of the Nation's nonfarm private sector workers. That is 
according to the Small Business Administration. Congress has an 
obligation to make sure laws written in Washington don't unfairly 
burden Main Street.
  The Unfunded Mandates Reform Act already requires the CBO to estimate 
whether Congress imposes mandates on the private sector. Right now 
there is a 60-vote point of order against legislation if the Federal 
mandates estimate has not been printed in the committee report or the 
Congressional Record. The fiscal year 2006 budget resolution conference 
agreement included a 60-vote point of order for imposing unfunded 
mandates on State and local governments. That is State and local 
governments, but it doesn't say anything about the engine of the 
economy: small businesses.
  My colleagues will notice that I have left out big business. Big 
business can usually take care of itself, but small business doesn't 
have the people or the clout to be able to come here and point out to 
us the gross burdens we are putting on them. So I think the Senate 
should have a new 60-vote point of order that applies to legislation 
that creates unfunded, private sector mandates. It is time for Congress 
to remember that our actions here in Washington have very real monetary 
consequences on the small business owners in Buffalo, WY, or Conway, 
NH, or Main Street, Anywhere.
  I came to Washington from Wyoming as a firm believer in what I call 
the 80/20 rule. I have found you can reach agreement on 80 percent of 
all the issues. I also know we are probably never going to reach 
agreement on the other 20 percent. But any unfunded mandates Congress 
imposes on the private sector should fall into--no, not the 80-percent 
category; I am just asking for a 60-percent category and receive strong 
support on both sides of the aisle that way.
  This 80/20 rule was the guiding principle for my chairmanship of the 
HELP Committee during the 109th Congress. Senator Kennedy and I abided 
by that. We avoided the highly partisan issues. We worked on the 
nonpartisan or the bipartisan issues. It turned out to be, instead of 
the most contentious committee, one of the more agreeable committees. 
We accomplished a tremendous amount of work. In fact, President Bush 
signed 27 committee bills into law. Most of those went through by 
unanimous consent. That is far above the 60-vote threshold I am asking 
for with this amendment.
  We in Washington have to stop thinking our good ideas can be paid for 
by the wave of a wand. To that end, the Senate needs a procedural tool 
to remind ourselves that the policies we pass in Washington often 
translate to

[[Page S3567]]

the direct cost increases on the businesses on Main Street.
  This is a commonsense proposal. I urge my colleagues to support the 
amendment. I am sure there are small business supporters on both sides 
of the aisle who can see the benefit. I will mention that, right now, 
there is a 60-vote point of order in the Senate on everything. It is a 
filibuster. With a filibuster, 60 people have to agree before you can 
move on. That is often a 5-day waste of time. It would be much more 
convenient if we could get a vote and see that there are 60 people in 
support and know that even a filibuster isn't going to work against it. 
That would allow things to move forward faster.
  I am not trying to slow the process. I am trying to provide a 
mechanism that protects small business and allows us to get on with the 
business of the Senate. It seems to me to be a win-win situation for 
us. We do protect cities, towns, counties, States, all of their small 
governments and even some big governments, but we don't protect the 
small businessman. The small businessman is what keeps this economy 
moving, keeps us going. I am sure there isn't any issue that falls into 
that 80 percent that we all can agree on, that we cannot get 60 percent 
approval to move forward on. It will encourage more bipartisanship, and 
I think in the last election that was the main message delivered to all 
of us. It wasn't the base of either party that provided the impetus for 
any changes.
  It was the independents and the folks who said: Come on, guys, get 
along and get something done in Washington. That is what we are trying 
to do with this particular measure--move things along at a faster rate 
and to assure that small businesses can thrive in this country and that 
we get agreement from 60 percent of the people in this body to move 
forward. This will provide needed protection to small businesses.
  I ask unanimous consent that a letter from the NFIB be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   March 21, 2007.
     Hon. Michael Enzi,
     U.S. Senate,
     Washington, DC.
       Dear Senator Enzi: On behalf of the National Federation of 
     Independent Business (NFIB), the nation's leading small-
     business advocacy group, I strongly support your amendment to 
     the FY 2008 Budget Resolution that would raise the private 
     sector unfunded mandate point of order from a 50 to a 60 vote 
     threshold.
       Congress needs a 60 vote threshold to force itself to think 
     twice before adding additional unfunded mandates for several 
     reasons. One, the regulatory burden that small businesses 
     face is already too high. According to recent studies 
     commissioned by the Small Business Administration the 
     regulatory burden in 2004 was estimated to be $7,647 per 
     employee in small businesses with fewer than 20 employees. 
     And small firms spend 45 percent more than their larger 
     counterparts to comply with federal regulations.
       Second, this Congress has either considered or likely will 
     consider mandates that will add to this burden. Among the 
     proposals under consideration include legislation to increase 
     the minimum wage, require small employers to provide paid 
     sick leave, offer family and medical leave, and provide wage 
     insurance.
       The critical role that small business plays in our economy 
     is another reason Congress should think before imposing new 
     unfunded mandates. Small business produces roughly half of 
     the private Gross Domestic Product and between 60 and 80 
     percent of net new jobs. Legislators should be working to 
     strengthen small business's ability to create new jobs and 
     grow their businesses, not working to impede their progress.
       Thank you for introducing this important amendment and your 
     continued support of small business.
           Sincerely,

                                                   Dan Danner,

                                         Executive Vice President,
                                      Public Policy and Political.

  Mr. ENZI. Mr. President, I hope my colleagues will support this 
amendment. I will be happy to address any concerns. We have looked at a 
number of issues, historically, to see what the effect would be. We 
think the effect would be good legislation for small business and for 
the economy of this country.
  I yield the floor and reserve the remainder of my time.
  The PRESIDING OFFICER (Mr. Salazar). Who yields time?
  Mr. ENZI. Mr. President, I suggest the absence of a quorum and ask 
that the time be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, I yield 5 minutes to the Senator from 
Maryland, Senator Cardin.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. CARDIN. Mr. President, I thank Senator Conrad for yielding me 
this time. I take this time to rise in support of the budget resolution 
and the work of Senator Conrad and the Budget Committee. It has been 
said frequently it is the most difficult job here to try to put 
together a budget, when you are trying to deal with all the different 
priorities. Senator Conrad has done an excellent job in moving the 
agenda of this Nation.
  This budget resolution changes the fiscal priorities of America. 
First, it provides for fiscal discipline. The pay-go rules are real. 
There are difficult choices our committees will have to make. But we 
have made it a priority to get our budget back into balance and say 
that we have to make tough choices.
  Secondly, there are important priority areas. I compliment the 
committee for making health care truly a priority, to change the 
direction of America. It is a national disgrace that we have 46 million 
people without health insurance in America. We need to do something 
about it. We need universal health coverage in this country. This 
budget moves us in that direction by making SCHIP a priority. It gives 
the committee the ability to expand a very successful program. SCHIP 
works. It provides health insurance for our children.
  Over the last 10 years, we have seen improved health care outcomes as 
a result of the SCHIP program. We know that if a person is covered by 
SCHIP, they are much more likely to receive primary care and dental 
care. They are much less likely to use the emergency rooms and much 
more likely to be immunized and have preventive health care and access 
to prescription drugs. Those enrolled in the SCHIP program are going to 
be better off. This budget allows us to move that issue forward. We 
often talk about it.
  There was a hearing before the Senate Finance Committee and a family 
from Maryland was there. I will quote from Mrs. Bedford. She has five 
children in the SCHIP program. What she said is:

       Perhaps the greatest impact MCHIP, the Maryland Children's 
     Health Insurance Program, has had on our families medically 
     is that we no longer have to make impossible health choices 
     based on a financial prospective. We no longer have to decide 
     whether a child is ``really sick enough'' to warrant a 
     doctor's visit. We no longer have to decide whether a child 
     ``really needs'' a certain medication prescribed by his 
     pediatrician. The face of CHIP is families such as ours, 
     families who work hard and play by the rules, trying to live 
     the American dream.

  This budget will allow more families to be able to be in the health 
program and to live the American dream. Another family in Maryland is 
the Diver family, where Diamonte Diver died as a result of not getting 
access to preventive dental care. The toothache became abscessed and 
spread into his brain. He had emergency surgery costing over a quarter 
of a million dollars. If he would have had access to preventive oral 
care, dental care, for $80 he could have had a tooth extraction and 
that would have saved money in our health care system.
  By expanding the SCHIP program, more children will be covered by 
dental care. There are so many reasons why this budget will allow us to 
move forward regarding our health care priorities. In the 109th 
Congress, we prevented 17 States from running out of money late in the 
session. This budget versus the President's budget is a clear choice. 
The President's budget moves in the wrong direction on health care and 
the SCHIP program. This allows us to make it truly a national priority.
  There are other parts of the budget in health care that I support, 
such as the long-term care reserve fund, so that we can develop a more 
cost-effective way to take care of long-term care needs, so families 
can get assisted living help or home health care, and they

[[Page S3568]]

don't have to spend as much money in nursing care. I could go through 
many priorities, whether it is veterans health care, education, or 
whether it is transportation. All these are important priorities that 
this budget allows us to move forward on in a fiscally responsible way.
  I know we have had budgets that try to pull back from the pay-go 
requirements. I am glad we have stood up for the pay-go requirements. 
We have to balance the budget, but we need to change the priorities of 
America and move forward with health care and education, and we need to 
move forward with veterans and transportation. This budget allows us to 
do it.
  I urge my colleagues to be cautious on all these amendments that are 
being offered. They may sound well intended, but they could jeopardize 
the thrust of the budget. I urge my colleagues to support the 
underlying resolution.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, I thank Senator Cardin, the Senator from 
Maryland, an extremely valuable member of the Budget Committee. He came 
to this Chamber after an extremely well-respected career in the House 
of Representatives, where he served in the most powerful committee in 
the House of Representatives, the Ways and Means Committee. Senator 
Cardin is known as a Congressman's Congressman. He is somebody who does 
his homework. We have already seen that on the Budget Committee. He is 
already an extraordinarily valuable member there. I rely on him 
heavily. I cannot tell you how pleased I am to have Senator Cardin on 
the Budget Committee. He has a wealth of knowledge, which has been put 
to good use as we have crafted this budget resolution. So I commend him 
and thank him publicly for the contribution he has made. This is the 
kind of serious-minded person this Senate needs and the Congress of the 
United States needs. We are delighted he is on the Budget Committee.
  I would like to speak for a minute on the Enzi amendment. Senator 
Enzi, on the other side of the aisle, is somebody I not only like but I 
respect. Senator Enzi was an accountant in his private life. He brings 
those skills and that discipline to his job. He is well regarded on 
both sides of the aisle because he is serious about the job. I wish to 
start by saying I do like and admire the Senator from Wyoming, Mr. 
Enzi.
  On his amendment, let me give my reactions. I think it is entirely 
well intended. What I worry about are the unintended consequences with 
this amendment. Let me say why. Currently, there is a 60-vote point of 
order against legislation that would impose unfunded mandates against 
State, local, and tribal governments above a certain threshold. That 
threshold right now is $66 million in any 1 year. In addition to that 
point of order, there is a 50-vote point of order against legislation 
that would have an unfunded private sector mandate above a certain 
threshold. That, currently, as I recall, is $131 million in a year. But 
that is not a 60-vote point of order; it is not a supermajority. It is 
a simple majority. The amendment that Senator Enzi has presented would 
make the private sector unfunded mandate point of order a 60-vote one, 
a supermajority.
  I think the Senator would acknowledge that. He has altered it 
somewhat from what he offered in committee. It applies to the extent 
that the mandate affects small businesses. So this amendment could 
result in a budget point of order against legislation that has no 
Federal, State, local or tribal budget impact; but it would have an 
effect if a mandate affects small businesses and it has an effect of 
over $131 million in any year.
  So far, so good. The difficulty I see with the amendment is, first, 
once again, the Budget Committee does not have the authority to make 
this kind of policy determination. We don't. I would like to. Many 
times as the Budget Committee chairman, I wish we had this kind of 
authority, but we simply don't.
  If legislation such as this were adopted--and again, it can't be 
adopted in a budget resolution--but if it were adopted separately, my 
staff informs me it could affect legislation in the following areas: It 
could actually create a 60-vote point of order against the mental 
health parity legislation of Senator Domenici--legislation, by the way, 
of which Senator Enzi is a cosponsor. It could create a 60-vote point 
of order against the 2007 Defense authorization bill. It could create a 
60-vote point of order, a supermajority hurdle, against minimum wage 
legislation, bankruptcy reform, pension reform, and a host of other 
bills.
  That is the concern I have about this amendment in terms of a policy. 
We have not had a hearing. It requires further exploration before we 
would go forward with this particular amendment.
  Again, the desire the Senator has to have unfunded mandates points of 
order on issues that would affect small business is entirely 
reasonable, but I am very concerned about the unintended consequences. 
I am very concerned about creating a 60-vote hurdle, a supermajority 
vote, that could affect issues such as the mental health parity 
legislation of Senator Domenici, such as the 2007 Defense authorization 
bill, such as the minimum wage bill, such as the bankruptcy reform 
legislation, such as pension reform.
  I sense there is danger here, and I urge my colleagues to think about 
it carefully before they vote for the amendment.
  I understand we are getting to the end of the time. Does Senator Enzi 
have time remaining?
  The PRESIDING OFFICER. Senator Enzi has 8\1/2\ minutes remaining.
  Mr. CONRAD. Perhaps Senator Enzi wishes to use his time at this 
point.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I appreciate the comments of the Senator 
from North Dakota. He and I do have a lot in common. My grandparents 
homesteaded in North Dakota, and he and I both have a degree from the 
same college. We share a respect for the process of the Senate. I 
certainly respect him for the way he handles the budget and the 
fairness with which he has done so.
  I hope he and others on the other side of the aisle will take another 
look at this amendment and not feel any fear. I hate to have people 
vote on a sense that there might be something sinister. If one looks at 
my record in the Senate, they will find I do not do things that are 
sinister, but I do things that protect small business.
  As I have pointed out before, a point of order can be waived. If 
there are 60 votes, that point of order falls, and the issue moves 
forward. The Senator mentioned mental health parity. Yes, I am a 
cosponsor of mental health parity legislation. I have helped to bring 
people together, to find a third way of doing it, to get it into the 
80-percent category, and move it forward for the first time. I know 
Senator Domenici has been working on this issue for over 6 years, close 
to 10 years, to get it to the point where it is now. I certainly 
wouldn't do anything that would put that bill in jeopardy. It could be 
in jeopardy because there is already a 60-vote point of order against 
it we will have to waive in order to go forward.
  On a lot of these small business issues, there would be a 60-vote 
point of order already available on it. As I mentioned before, there is 
already another 60-vote possibility because anybody in the Senate can 
filibuster an issue which can cause it to fall into a category of 
needing a cloture motion. When you file a cloture motion, if you were 
to file it today, we couldn't vote on it until Saturday, and we would 
be debating the qualities of that amendment until Saturday. Saturday, 
when we had the 60 votes to pass it, then there would be another 30 
hours of debate before the actual vote on that amendment, if everybody 
wanted to press the time. That would take up 5 days, maybe 6 days.
  Waiving a point of order takes a few moments, and we can see if there 
is the strength to move the issue forward and discourage filibusters.
  There is some real merit to having this point of order, both to show 
we have a concern for small business and recognize they are the engine 
that drives the economy of this country and that we do need to watch 
out for them, protect them, and keep from putting them out of business.
  I hope my colleagues will take a careful look at this amendment and 
see the merit in it instead of sensing that

[[Page S3569]]

there could be implications. I do not have any ulterior motives, other 
than my normal concern for small business and the feeling we need to 
watch out for them. It doesn't hurt to have a searching for answers, 
sometimes a third way, to get done what we want to do to allow small 
business to succeed and for us to do what we wish to do.
  I hope my colleagues will take a look at this amendment and vote for 
it. I sense there are some who are going to vote for it anyway. I hope 
they follow through and vote for it.
  I yield the floor and yield back the remainder of my time.
  Mr. CONRAD. Mr. President, we are now awaiting the arrival of Senator 
Carper. I ask the staff to call the Senator's office because we are 
ready to go to Senator Carper's amendment.
  Mr. President, could you give us an update on the time situation?
  The PRESIDING OFFICER. At the present time, there is 4 minutes 
remaining to the Senator from Wyoming and 3 minutes remaining to the 
Senator from North Dakota on the Enzi amendment.
  Mr. CONRAD. We are prepared to yield back all time on both sides of 
the Enzi amendment.
  I see Senator Coleman is here. Will Senator Coleman be available to 
go forward with his amendment? Senator Carper is not in the Chamber.
  Mr. COLEMAN. Mr. President, I am ready to go forward.
  Mr. CONRAD. Mr. President, I ask the manager on the other side if 
that is acceptable with him.
  Mr. GREGG. Yes.
  Mr. CONRAD. Why don't we do that. We thank Senator Coleman very much. 
We will go to Senator Carper after Senator Coleman has completed.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Minnesota.


                           Amendment No. 577

  Mr. COLEMAN. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside so that I may send an amendment to the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Minnesota [Mr. Coleman], for himself, Ms. 
     Snowe, Ms. Collins, and Mr. Roberts, proposes an amendment 
     numbered 577.

  Mr. COLEMAN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To provide budget levels to extend through 2012 the 
     production tax credit for electricity produced from renewable 
resources; the Clean Renewable Energy Bonds; and energy tax provisions 
            for energy efficient buildings and power plants)

       On page 3, line 12, decrease the amount by $277,000,000.
       On page 3, line 13, decrease the amount by $634,000,000.
       On page 3, line 14, decrease the amount by $939,000,000.
       On page 3, line 15, decrease the amount by $1,307,000,000.
       On page 3, line 21, decrease the amount by $277,000,000.
       On page 3, line 22, decrease the amount by $634,000,000.
       On page 3, line 23, decrease the amount by $939,000,000.
       On page 4, line 1, decrease the amount by $1,307,000,000.
       On page 4, line 7, decrease the amount by $277,000,000.
       On page 4, line 8, decrease the amount by $634,000,000.
       On page 4, line 9, decrease the amount by $939,000,000.
       On page 4, line 10, decrease the amount by $1,307,000,000.
       On page 4, line 16, decrease the amount by $277,000,000.
       On page 4, line 17, decrease the amount by $634,000,000.
       On page 4, line 18, decrease the amount by $939,000,000.
       On page 4, line 19, decrease the amount by $1,307,000,000.
       On page 26, line 16, decrease the amount by $277,000,000.
       On page 26, line 17, decrease the amount by $277,000,000.
       On page 26, line 20, decrease the amount by $634,000,000.
       On page 26, line 21, decrease the amount by $634,000,000.
       On page 26, line 24, decrease the amount by $939,000,000.
       On page 26, line 25, decrease the amount by $939,000,000.
       On page 27, line 3, decrease the amount by $1,307,000,000.
       On page 27, line 4, decrease the amount by $1,307,000,000.

  Mr. COLEMAN. Mr. President, as we all know, budgets are about setting 
priorities for the Nation. As we continue to work on the resolution 
today, I offer an amendment to address a key priority for our Nation: 
providing for our Nation's energy future.
  We all know America's energy needs are growing rapidly. We need clean 
energy, and high energy prices threaten our national security. This is 
now a national security issue. A few years ago, when I was talking 
about ethanol, I would get some patronizing pats on the back for taking 
care of some Midwest corn growers. That has changed today.
  Clearly, this is a national security issue. High energy prices 
threaten our economic security. It is imperative then that Congress 
work to promote energy technology that will offer clean energy 
solutions and, if anything, Congress's budget should provide for new 
opportunities to address these issues.
  Yet in addition to seeking new legislative opportunities, we must 
address the oncoming expiration of current energy tax incentives that 
promote renewable energy and energy efficiency.
  At the end of 2008, tax incentives for wind, biomass, geothermal, 
hydropower, solar, and other clean energy technologies will expire, as 
well as tax provisions for energy-efficient residential and commercial 
buildings.
  In my home State of Minnesota, we take a lot of pride in our 
leadership on renewable energy issues from biomass to wind. It has been 
said southwest Minnesota is the Saudi Arabia of wind. Our State has 
made a massive investment in renewables and it is paying off. Renewable 
energy allows Minnesota to diversify and expand. It has reduced 
Minnesota's carbon footprint, and has also created jobs and put our 
State on the leading edge of renewable technology. At one point, I 
believe Minnesota had half the E85 pumps.
  We have had success I would like to see continue in my State and 
replicated across the Nation. The United States should be a leader of 
renewable energy in this world. But much of the success would not have 
been possible without a little assistance. The production tax credit, 
for example, has enabled the wind industry to explode over the last 
several years. I talked with so many folks involved in the wind energy 
business, farmers who farm wind today, small-town mayors who are 
depending on wind energy to help them. We are at the point now where 
there is a waiting list for wind turbines. This is a great success 
story that would not have been possible without the production tax 
credit which is set to expire at the end of 2008.
  Another renewable energy incentive that is new but has generated a 
lot of interest is the CREBs, clean renewable energy bonds. These are 
enabling local governments and rural electric co-ops to make a 
contribution to the need for renewable energy. I know there is a case 
in Minnesota where several school districts actually combined to use 
these bonds to put up a wind turbine project. There are great renewable 
success stories waiting to happen, but this wind energy tool, set to 
expire in 2008, will be short lived if not extended.
  A lot of times, we focus on the production side of the energy issue, 
when, in reality, promoting energy efficiency can do more than anything 
to lower energy prices and protect the environment in the short term. 
In fact, the American Council for Energy-Efficient Economy has found if 
a massive energy efficiency effort were undertaken, we could reduce 
natural gas use by 1 percent and cut prices by well over 30 percent--in 
fact, they said a 37-percent potential cut in prices. Energy efficiency 
is the quickest, cheapest, and cleanest way to bring down energy costs 
for consumers. Meanwhile, as consumers save money, they also reduce 
greenhouse gas emissions.
  Although we should always look for additional policies that promote 
energy efficiency, Congress has passed tax provisions for energy-
efficient homes and commercial buildings that have made a real impact. 
One such provision is a deduction for energy-efficient commercial 
buildings that reduce annual energy and power consumption by 50 
percent, while another tax provision provides a credit to eligible 
contracts for construction of a qualified new energy-efficient home. 
Unfortunately, these, too, will expire in 2008.

[[Page S3570]]

  At a time when Congress should be sending clear signals to the 
marketplace to move forward with renewable energy and energy 
efficiency, the very tax incentives targeted to these endeavors will 
expire shortly. Meanwhile, how is business supposed to make long-term, 
responsible decisions with such little certainty about the existence of 
these provisions?
  That is the point. If you talk to farmers, talk to groups of farmers 
who are coming together, they can't get the investment, they can't pool 
investment, work with banks and others unless they know there is a 
long-term tax incentive in place. That 1 percent per kilowatt is 
absolutely critical, and it is set to expire in 2008.
  The tremendous advantage we are making--and the Senator from North 
Dakota understands well--is important to our part of the country. There 
is the possibility of cutting the legs out from under them, and we 
simply should not let that happen.
  From my State, there is a very clear example. My State of Minnesota 
has adopted--and is setting the standard--a 30 by 20, 25 requirement. 
In other words, cut emissions by 30 percent.
  Yesterday I sat in on a conversation with the head of Xcel Energy, 
one of the largest energy providers in the State of Minnesota, and I 
said: How are you going to get to 30 percent? His answer was wind 
energy. Wind energy will play an important part.
  It used to be a boutique form of energy, just a couple of wind 
farmers, but today it is an important part of the whole package, the 
whole piece we need to have in place in order to meet the standards 
that have been set that will provide for a cleaner environment and that 
will cut our dependence on foreign oil.
  Without incorporating these extensions into its fiscal blueprint, I 
do not believe this budget is setting a responsible course for our 
Nation's energy policy. As we look for additional ways to promote 
renewable energy and energy efficiency, I urge my colleagues to 
recognize the need to ensure that we do not take a step back. If these 
tax incentives expire, we will be taking a terrible step back. We need 
to extend these energy tax provisions, and I urge support for my budget 
amendment.
  Mr. CONRAD. Mr. President, the Senator from Minnesota offers an 
amendment with which I am entirely sympathetic. In fact, these are many 
things that I strongly support.
  I would inquire of the Senator if he would be open to a different 
pay-for. Let me express why I am concerned about it. The pay-for the 
Senator has offered is section 920, and section 920 is about, at this 
point, fully subscribed. We are between $7 billion and $7.5 billion a 
year on section 920 already, I would say to the Senator. That is about 
as much as we can do realistically. The President, in his package, had 
$7.5 billion. The appropriators, in this last bill for the last year, 
did $6 billion.
  So the concern I have is that we wind up with a circumstance that 
will not accomplish what the Senator and I very much want to have 
happen. I would offer for his consideration that we will not be voting 
on his amendment right now, in any event, so there is some time for us 
to consider an alternative. If I could quickly offer as an alternative 
a reserve fund, which would give total flexibility to the committees of 
jurisdiction as to how to fund them, would the Senator be open to an 
alternative?
  Mr. COLEMAN. I would note, Mr. President, that I think the underlying 
budget provides about $36.4 billion in section 920 funding. I think 
that is the figure. I know, as the Senator from North Dakota knows, 
that there have been a number of other proposals. I think Senator 
Bingaman's amendment uses section 920. I do think this is a priority 
that should have been in the underlying budget. I think it is that 
essential. I believe the Senator from North Dakota understands and 
knows the importance of the extension of these tax credits.
  This will not be voted on now for a couple of hours, but I will 
certainly go back and explore and look at some of the possibilities. In 
the end, I believe this needs to be part of this budget. It is 
important for our Nation's energy security. It is important, certainly, 
from an economic perspective. And it is a win-win for everyone. So let 
me explore other alternatives, but I do hope my colleagues support this 
amendment, either with the 920 section we are looking at or we will 
explore whether there is another potential.
  Mr. CONRAD. I thank the Senator very much.
  Mr. President, the Senator is exactly right. I think in section 920, 
we are at about $38 billion. That is over 5 years. The $7 billion I was 
referencing is for 1 year. The comparison I was making is that the 
President had given us similar offsets of about $7.5 billion for 1 
year. The appropriators, in the last major bill for last year, did $6 
billion for the year. So what I am trying to communicate is that I 
think we are pretty close to fully subscribed there.
  There is an alternative that would be a deficit-neutral reserve fund 
that leaves open to the committees of jurisdiction--it actually gives 
them more flexibility, I would say to the Senator. I would 
enthusiastically support that, if the Senator would consider a 
modification.
  Mr. COLEMAN. Mr. President, I will certainly work with the Senator 
from North Dakota and see if we can figure out a way to get this done.
  Mr. CONRAD. Mr. President, we are now ready to go to Senator Carper.
  We very much appreciate the patience Senator Carper has shown in 
getting time on the Senate floor. We thank him for his valuable 
contributions as we work these many amendments we have already 
considered. Senator Carper has been an especially constructive member, 
and we want to recognize him and thank him for that.
  Mr. CARPER. Mr. President, I want to convey my gratitude to Senator 
Conrad, our chairman, and also Senator Gregg, our former chairman, and 
say how much I respect and admire the way they have worked together, 
whether Democrats were in the majority or the Republicans were in the 
majority. I think they set an example for the rest of us to follow in 
the way we deal with each other: with mutual respect, always focusing 
on the issues, sometimes disagreeing, but doing so in an agreeable way, 
much the way the Presiding Officer handles himself in these matters.


                           Amendment No. 538

  Mr. President, I ask unanimous consent that the pending amendment be 
set aside and that it be in order for me to call up one amendment at 
the desk, and that is amendment No. 538; that once it is reported by 
number, it be set aside and that I be recognized to speak with respect 
to this amendment, as already previously provided for.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Carper], for himself and Mr. 
     Coburn, proposes an amendment numbered 538.

  Mr. CARPER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To reduce the deficit by recovering improper payments)

       At the appropriate place, insert the following:

     SEC. __. DEFICIT-REDUCTION RESERVE FUND FOR REDUCTION OF 
                   IMPROPER PAYMENTS.

       The Chairman of the Senate Committee on the Budget may 
     revise the aggregates, allocations, functional totals, and 
     other appropriate levels and limits in this resolution upon 
     enactment of legislation that achieves savings by eliminating 
     or reducing improper payments made by agencies reporting 
     improper payments estimates under the Improper Payments 
     Information Act of 2002 and uses such savings to reduce the 
     deficit, provided that the legislation would not increase the 
     deficit over the total of fiscal years 2007 through 2012.

  Mr. CARPER. I have three amendments, Mr. President, that I will be 
talking about which I offered with Senator Coburn. Before I talk about 
the amendments, though, let me take a moment to say, as a lot of my 
colleagues do, I have a great deal of interest in the budget, the 
budget itself and also the budget process.
  Part of my interest goes back to my former role as Governor of my 
State, where we drafted, prepared, proposed, and implemented those 
budgets for 8 years. During those 8 years, we balanced our budget every 
year. We even put money, I think almost every year, in a rainy day fund 
to deal with challenges that might confront my successors someday down 
the line. We were

[[Page S3571]]

able to balance the budget during those years in part because we were 
guided by a simple, basic principle, and that is if something is worth 
doing, it is worth paying for.
  Balancing the budget doesn't mean sitting on our hands and doing 
nothing. In Delaware, while I was privileged to serve as its chief 
executive, we cut taxes in 7 out of 8 years, both individual personal 
income taxes and business taxes. We also invested in our schools to 
raise student achievement. We sought to improve health coverage for our 
children. We put in place a prescription drug assistance program. We 
helped make welfare pay less than work so that people would be 
incentivized to go to work. We enhanced our transportation 
infrastructure and paid down some of our debt.
  It wasn't just the Governor, it was the legislature, with Democrats 
and Republicans working together, sort of our tradition in my little 
State. We set priorities, we saved money where we could, and when 
something was worth doing, we paid for it. We paid as we went. We 
balanced the budget, and we did so year after year.
  When I was elected to the Senate in 2000, the Federal budget was 
balanced as well. In fact, our country was enjoying budget surpluses. 
When I came to the Senate, we were actually on track to pay off our 
national debt. We were on track to be debt free, as hard as that is to 
imagine today. I spent most of my first term in the Senate in the 
minority. It was a very different experience from being Governor of my 
State. Over the course of my first term in the Senate, I watched the 
majority pass budget resolution after budget resolution that ultimately 
dug us further into debt.
  In 2000, the Federal budget was on course to run, I think, a $5.5 
trillion surplus. The size of the national debt had been falling at 
that point for a couple of years. Over the last 6 years, we have gone, 
unfortunately, in the opposite direction. We have run record budget 
deficits and added some $1.5 trillion to our Nation's debt.
  Last year, the American people said enough. This budget resolution 
responds to the desire of the American people to return to what I call 
a commonsense approach. There is an old saying--I think it is from 
Denis Healey, Chancellor of the Exchequer in Great Britain. He had a 
theory on holes. ``When you find yourself in a hole, stop digging.'' 
With this budget resolution, we stop digging.
  This budget resolution does, once again, what budget resolutions are 
supposed to do. It not only charts the course to a balanced budget, it 
also includes enforcement mechanisms to keep Congress's feet to the 
fire and, I might also add, the executive branch's feet to the fire. A 
plan on paper to balance the budget is great, but it does no good if we 
throw that plan out the window as soon as we start passing spending and 
tax cut bills later in the year.
  This budget resolution requires that new proposals to increase 
spending or decrease revenues be fully offset with counterbalancing 
cuts in spending or increases in revenue. This pay-as-you-go 
requirement is something that I have been advocating, along with a 
number of my colleagues, certainly Senator Conrad and others, for 
years. I am very pleased it will soon be adopted, I hope, by the 
Senate.
  This budget resolution takes something called budget reconciliation 
and restores it to its original purpose. Reconciliation is a special 
procedure that was created to make it easier to pass legislation that 
made tough choices to reduce budget deficits. However, reconciliation 
has been abused in some of these recent years. It has been used to 
speed the passage of legislation that, far from balancing the budget, 
actually turned around and busted the budget. It is a little like 
adding grease to a pig. It makes it exceedingly difficult to get a 
handle on our out-of-control budget problems.
  I offered an amendment a couple of years ago to prohibit the use of 
reconciliation to expedite passage of measures that do bust the budget. 
I don't know if that amendment was adopted, but I am glad the Senate 
will soon take this important step to restore fiscal order.
  This budget also includes a new long-term budget point of order. This 
is vitally important because our short-term budget challenges pale in 
comparison to our long-term budget challenges. We ought to be taking 
steps now to prepare for the retirement of the baby boom generation--
that is my generation and maybe the generation of several of us on the 
Senate floor today--preparing for our retirement and preparing for the 
strain those retirements are going to place on programs such as Social 
Security, Medicare, and, I might add, Medicaid. The last thing we ought 
to do is take steps now that will make matters worse in the future.

  The new budget point of order created by this resolution requires 60 
votes for legislation that would make our long-term budget challenges 
substantially worse. This forces the Congress to look beyond the 
present, even past the next election--something we don't always do--to 
the future we are leaving to our children and to our grandchildren.
  I commend the chairman of the Budget Committee, Senator Conrad. He 
has inherited a difficult set of circumstances. He has inherited a 
budget pretty much out of balance. He has inherited a Tax Code that has 
middle-class tax increases built in, in the form of a rapidly expanding 
alternative minimum tax. Nonetheless, under his leadership, the Budget 
Committee has managed to craft what I think is a very sensible 
resolution. They have provided for our troops in the field. They have 
provided for investments at home in education, health care for our 
children, and they have done this in the context of a plan that holds 
the line on taxes and charts a course to a balanced budget over the 
next 5 years.
  I particularly thank Senator Conrad for managing to provide, 
consistent with a plan to balance the budget, vital support for 
passenger rail service in this country of ours. It is becoming 
increasingly evident every day that passenger rail is a good 
investment, and one I think that is getting better. It is critical to 
economic growth and mobility. It is necessary to address traffic 
congestion and to protect air quality, and it is an essential part of 
reducing our dependence upon foreign oil.
  I will just share what I think is a pretty good ``gee whiz'' factor. 
We are in Washington, DC, today talking about how rail, passenger rail 
and freight rail, can help in terms of reducing our dependence on 
foreign oil. We can take a ton of freight, move it from Washington, DC, 
to the Northeast corridor, to Boston, MA, with 1 gallon of diesel fuel. 
Think about that. With 1 gallon of diesel fuel you can move a ton of 
freight by rail from Washington, DC, to Boston, MA.
  There are real economies to be gained, real progress in terms of 
reducing our dependence on foreign oil. That is about as graphic an 
example as I can think of.
  Mr. CONRAD. Mr. President, will the Senator yield for a question?
  Mr. CARPER. I will be happy to yield.
  Mr. CONRAD. The Senator shared that statistic with me the other day, 
and I would like the Senator to repeat it because I think it is very 
easily overlooked. Would the Senator repeat that statistic?
  Mr. CARPER. With pleasure. It is possible to move 1 ton of freight by 
rail from Washington, DC to Boston, MA, for about a gallon of diesel 
fuel. That is it. There are similar kinds of efficiencies we could 
realize by moving people, not just tons of freight by rail but people 
by rail, especially in densely populated corridors. I am not one who 
argues--I used to be on the Amtrak board, but I am not one who argues 
we should run trains in places people don't want to ride them or that 
we should run them in sparsely populated areas. I don't know that 
always makes sense. But we have 75 percent of people in this country 
who live within 50 miles of one of our coastlines. What that does, from 
the Northeast, the mid-Atlantic, Southeast, gulf coast, west coast, is 
create a lot of densely populated corridors. They lend themselves to 
passenger rail, especially for trips of maybe 300 or 400 miles or less.
  With respect to Amtrak funding, we need to appropriate levels of 
capital. That is going to be more important as we consider a 
comprehensive reauthorization bill for Amtrak, which I hope is going to 
happen later this year.
  I also thank Senator Conrad and the committee for addressing the tax 
gap in this bill. That is the difference between the amount of tax that 
is legally

[[Page S3572]]

owed and the amount that is actually being paid on a timely basis. The 
tax gap is estimated to be some $345 billion in 2001. The chairman of 
the Budget Committee has estimated it will amount to as much as $2 
trillion over the course of the 5 years covered by this budget 
resolution. If we completely closed this tax gap, we would largely 
eliminate the Federal budget deficit. We are never going to completely 
close it, but we need to do more to narrow it. It is a matter of basic 
fairness to the great majority of Americans who do the right thing and 
pay their taxes they owe on a timely basis.
  Together with Senator Coburn, who is the ranking member of the 
Financial Management Subcommittee I chair, I am offering three 
amendments to the budget resolution that I believe complement the 
initiatives in the budget resolution to address the tax gap. Our 
amendments deal with the spending side of the equation. Based on our 
work in the subcommittee, our amendments point to ways in which we can 
and should reduce the deficit by promoting better financial management. 
I think actually the administration probably agrees with what we are 
trying to do here.
  Our first amendment deals with improper payments. Agencies across the 
Federal Government spend literally tens of billions of dollars every 
year on avoidable payment errors.
  The most recent Governmentwide estimates from OMB report that 
agencies made about $41 billion in improper payments in fiscal year 
2006, most of them overpayments. This total is likely only the tip of 
the iceberg, since many agencies are not in full compliance with the 
law that requires them to report on their payment errors--the Improper 
Payments Information Act.
  OMB has plans in place to improve agencies' compliance with the 
Improper Payments Information Act. In keeping with our oversight role, 
our subcommittee is working with OMB to ensure that agencies comply 
with these plans and make consistent progress toward OMB's goal of 
eliminating up to $20 billion--that's about half the improper 
payments--in reported improper payments between now and 2011.
  The first amendment Senator Coburn and I have submitted would apply 
such savings as we are able to realize through the elimination of 
improper payments to deficit-reduction.
  The second amendment Senator Coburn and I have submitted touches on 
recovery audits, a tool at least some agencies use to recover payment 
errors they make.
  Under current law, agencies with at least $500 million in contracts 
outstanding must regularly go through their books to find overpayments, 
double payments, and other errors they may have made in paying their 
contractors.
  According to data released by OMB in January, just 2 months ago, 
agencies used recovery auditing to identify and collect millions of 
dollars in payment errors made to contractors. Frankly, We would like 
to see more of this kind of auditing work done.
  I intend to work with Senator Coburn, OMB, and others to increase the 
amount of recovery auditing that occurs at the Federal level. The 
amendment Senator Coburn and I have submitted today would dedicate the 
savings we achieve by doing that through these efforts to deficit 
reduction.
  Our third amendment touches on the management of Federal property. 
Senator Coburn and I have learned through several hearings in our 
subcommittee that agencies are spending a significant amount of money 
each year maintaining unneeded property--including buildings that are 
completely vacant.
  Part of this problem comes from the fact that agencies still don't 
really know what property they own, in some cases, despite some 
admirable efforts undertaken by the administration. Agencies also 
aren't given the appropriate incentives under current law to dispose of 
property they no longer need.
  Senator Coburn and I have been working on legislation that would give 
agencies additional tools and incentives that will encourage them to 
dispose of unneeded and vacant property. In so doing, it will enable 
the Federal Government and the taxpayers of this country to save the 
substantial costs that are incurred when we fail to dispose of these 
excess properties.
  OMB has said that the legislation Senator Coburn and I hope to bring 
forward this year would help agencies unload some $11 billion in 
property by 2011. The amendment Senator Coburn and I have submitted 
today would devote this savings to deficit-reduction.
  Again, I commend the Chairman of the Budget Committee and the Full 
Committee for a job well done. I urge my colleagues to support this 
budget resolution. And I urge my colleagues to join Senator Coburn and 
me in our efforts, I hope later today, to reduce the deficit through 
better financial management, by supporting these 3 amendments.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I see now that Senator Lincoln has come to 
the floor. We are running a little bit ahead of schedule, which is very 
helpful to us. While the Senator prepares, I say this to my colleagues: 
It is very important for colleagues to get this message because we have 
agreed between the managers of the bill to the following: In addition 
to the outline of amendments we have between now and when we start 
voting, we are then going to stop voting at 6 o'clock tonight. We will 
then have a period this evening where Senators will be able to speak. 
They will not be able to offer amendments. They can speak about 
amendments, but they will not be able to offer the amendments. We will 
have blocks of 30 minutes. From 6 to 6:30, the time will be under the 
control of the minority. From 6:30 to 7, it will be under the control 
of the majority. It will alternate back and forth in that way.
  So from 6 to 6:30, the minority will control a 30-minute block. From 
6:30 to 7, the majority will control a 30-minute block, and so on. From 
7 to 7:30, back to the minority. From 7:30 to 8, the majority. Senators 
and their staffs need to be aware that time will be available for 
speaking. You can talk on the amendments. You can talk on the budget 
resolution. You will not be able to offer an amendment, but you can 
talk about the amendment you will be offering tomorrow.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. To clarify further from our side of the aisle, in those 
time slots we have already had requests for 10 speakers. We are 
basically allocating 15 minutes per speaker so we are well into 2\1/2\ 
hours of our time we will be using on our side of the aisle. If other 
people wish to speak, it will be after those first 10 who have already 
gotten in touch with us and told us they need time. Please get in touch 
with us if people want to say something. At that time it will be a 
convenient time for people who have an amendment to talk about the 
amendment so they can get a little more on the record about the 
amendment because tomorrow on the vote-arama they will be limited to 1 
minute to explain their amendments.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I thank the Senator. I wish to send the word out to 
Senators on our side that time will be designated on a first come, 
first served basis. So Senators need to call the cloakroom or call the 
Budget Committee to get that time allocated.
  Now we have time reserved for the Senator from Arkansas, Mrs. 
Lincoln.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.


                           Amendment No. 542

  Mrs. LINCOLN. Mr. President, I ask unanimous consent to call up 
amendment 542.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. LINCOLN. I also ask unanimous consent to add Senator McCaskill 
as a cosponsor of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Kentucky [Mrs. Lincoln], for herself, Ms. 
     Snowe, and Mrs. McCaskill, proposes an amendment numbered 
     542.

  Mrs. LINCOLN. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

[[Page S3573]]

    (Purpose: To provide the Veterans Benefits Administration with 
     additional resources and staff to more effectively meet their 
   increasing workload and to address the unacceptably large claims 
backlog that continues to cause undue hardships for veterans and their 
                      families across the country)

       On page 22, line 12, increase the amount by $70,000,000.
       On page 22, line 13, increase the amount by $62,000,000.
       On page 22, line 17, increase the amount by $8,000,000.
       On page 26, line 12, decrease the amount by $70,000,000.
       On page 26, line 13, decrease the amount by $62,000,000.
       On page 26, line 17, decrease the amount by $8,000,000.

  Mrs. LINCOLN. Mr. President, I have a special thanks to our chairman 
and ranking member, who have been enormously diligent on this budget 
issue. Chairman Conrad has done a phenomenal job in bringing together a 
budget that reflects values for this country and for the American 
people. We are grateful to him for spending so much time, along with 
the members of the Budget Committee, in doing that.
  I rise today to offer this amendment with my friend and colleague 
from Maine, Senator Snowe. It is an amendment to the budget resolution 
that would provide an additional $70 million for the Veterans Benefits 
Administration. It is not a huge amount, but it is a necessary amount. 
This very much needed funding would provide the Veterans Benefits 
Administration with additional resources and staff to more effectively 
meet its increasing workload and its growing backlog of pending claims.
  We have seen a tremendous pressure put on our Veterans' 
Administration over the last several years. The veterans of this 
country, who have given so selflessly to this country in their service, 
in return deserve the services they have been promised. It is so 
important that the Veterans' Administration is able to process those 
requests.
  Chairman Akaka and Senator Murray have certainly shown tremendous 
leadership on behalf of our veterans. I thank them from the bottom of 
my heart. I thank them for all they have done. I also commend my 
colleague Chairman Conrad for this budget resolution which does so much 
in reflecting our Nation's commitment to our veterans. We know the 
chairman has put in here much needed resources for the VA. Those of us 
who believe so strongly in our veterans appreciate that.
  I am here today to build off of that great work these individuals 
have done. Delivering timely and accurate benefits to the brave men and 
women who have served our Nation in uniform should be a priority for 
each of us. The current backlog of pending disability and compensation 
claims has been listed as one of the VA's highest management priorities 
over the past several years. Yet the backlog that exists there is 
growing each and every day. The number of veterans who are contacting 
our office, our congressional office in Arkansas, who need help in 
navigating the disability claims arena at the VA, is so huge. 
Unfortunately, the time that begins to lag becomes years--not weeks or 
days but years--that our veterans are not getting the services they 
need because of this claims process.
  With an aging veteran population and more and more service men and 
women who are returning from overseas, the numbers of these claims will 
continue to increase, and the problem also becomes that our older 
veterans who have claims and have had claims existing for a long time, 
unfortunately, with newer veterans who are returning from Iraq and 
Afghanistan, they get pushed to the front of the line oftentimes. It is 
an unreasonable situation for the VA to be in.
  The complexity of these claims has also increased as the health of 
our aging veterans has worsened and we are seeing a growing number of 
complex new claims that are resulting from complex combat-related 
injuries, such as PTSD and traumatic brain injuries.
  Unfortunately, the increase in the growing complexity of these 
claims, coupled with the lack of resources by the VA, has contributed 
to an unacceptably large claims backlog that continues to cause undue 
hardship for our veterans and their families all across this country.
  We all agree the claims process should be more timely and more 
accurate. While there are a number of fundamental changes that need to 
be made, the least we can do is better provide the VA with the 
resources and the staff they so desperately need.
  Last year the backlog of pending compensation and pension claims was 
nearly 586,000. As of last week, the backlog had grown to over 647,000.
  The most time-consuming and labor-intensive claims to process are the 
disability claims which require rating decisions. Last year the backlog 
of disability claims was nearly 372,000. Today it has grown to 405,000. 
This amendment would address the growing backlog of pending disability 
claims by providing $65 million to hire an additional 600 disability 
claims processors.
  As the VA receives and adjudicates more claims, it results in a 
larger number of appeals. That backlog of claims also continues to 
grow, and that is why this amendment would provide $4 million for the 
Board of Veterans' Appeals to hire 32 additional full-time staff.
  Additional funds are also necessary to increase training for current 
employees as well as any new employees to ensure consistency of claims 
processing and to lower error rates. That is why this amendment would 
provide the 1-year cost for increased training resources and quality 
measures with $400,000 for training and performance support systems and 
$400,000 for skill certification.
  I was taught at an early age about the sacrifices our troops and 
their families have made to keep our Nation free. My father and 
grandfathers both served in uniform; my father in Korea as an 
infantryman, I had both grandfathers who served the Nation in World War 
I. That is why I am here today.
  These veterans have given so much. They have given so much, as have 
their families. But to sit in waiting for years to get an answer from 
the VA is absolutely unacceptable, simply because we are not willing to 
put the staff there that needs to be there to deal with the volume of 
people who are coming.
  I urge my colleagues to support this amendment, which would simply 
allow the VA to better process and award the benefits to which they are 
entitled by law. This does not create any new benefits. It simply gives 
them access to the benefits they already need and deserve.
  I would ask my colleagues to check with your staff and check with 
your offices to see the disability claims you are dealing with for 
veterans in your State and see how many of them have such a lengthy 
time that you would love to be able to erase.
  The lessons ingrained in me since my childhood have taught me that 
after a person has served in the military, we should make every effort, 
absolutely every effort, to care for them and for their families and to 
honor the benefits they have earned. It is the least we can do for 
those to whom we owe so much. It is the least we can do to reassure 
future generations that a grateful nation will not forget them when 
their military service is complete.
  I urge my colleagues to support us on this amendment. We know that, 
as I said, the Budget Committee has done a good job in putting forth a 
responsible budget but one that truly recognizes the needs of our 
veterans. This is one small measure where we can assure the resources 
will be there to hire the staff, to ensure the backlog in these claims 
can be taken care of.
  I appreciate, again, the chairman and the ranking member of the 
Budget Committee. I thank them for the incredible job they have done. I 
encourage my colleagues to support this amendment on behalf of the many 
veterans, with whom each and every one of us in our offices works, to 
ensure we can get them a timely response on their claims with the VA.
  Ms. SNOWE. Mr. President, I rise today in strong support of an 
amendment that my friend and colleague from Arkansas, Senator Lincoln, 
and myself have offered to the budget resolution, which will help to 
ensure that our Nation's courageous veterans receive the benefits and 
compensation that they have earned in a timely and efficient manner 
from the Department of Veterans Affairs (VA).
  Every year, hundreds of thousands of America's finest look to the 
Veterans

[[Page S3574]]

Benefits Administration (VBA) to process their claims for disability 
compensation, pensions and other entitlements due them as a result of 
their unselfish and steadfast service to our Nation. However, according 
to a VBA Workload Report in 2006, the total number of pending 
compensation and pension claims increased nearly 17 percent over 2006, 
from 517,574 to 604,308 cases--and as of last week, the backlog had 
grown to 647,405 cases. On top of this, our country's aging veterans' 
population and influx of service men and women who will enter the VA 
system after returning from Iraq and Afghanistan will inexorably lead 
to an increase in the VBA's workload.
  The lengthy delay that many veterans endure to receive their benefits 
from the VA is simply unacceptable. Therefore, I believe it is vital 
for the Department of Veterans Affairs to have the resources necessary 
to promptly deliver benefits to veterans by adjudicating and processing 
their claims in a timely and accurate fashion. Given the critical 
financial importance of disability payments for veterans and their 
families, the VA has an undeniable responsibility to maintain an 
effective delivery system and to take decisive and appropriate action 
to correct deficiencies as soon as they become evident.
  On March 7, 2007, the Senate Committee on Veterans' Affairs received 
testimony from Rick Surratt, the Deputy National Legislative Director 
of the Disabled America Veterans, who highlighted the staffing 
shortages that have hindered the VA's ability to process claims. 
Surratt stated:

       Past Reductions in staffing levels degraded VA's ability to 
     process and decide disability claims in a correct and timely 
     manner. After falling behind, it never fully recovered. With 
     continued growth in the volume and complexity of claims for 
     disability benefits, VA has not requested the resources 
     necessary to overcome the existing backlog and stay abreast 
     of that growth. . . .

  On December 4, 2006, Senator Lincoln and I joined with 33 of our 
colleagues to send a letter to the President, respectfully requesting 
that his fiscal year 2008 budget submission to Congress includes 
adequate funding for additional staff and resources necessary to 
address the growing backlog of pending claims at the VBA. According to 
the President's fiscal year 2008 budget, the average length of time to 
process a veteran's disability claim has dropped to 177 days, and the 
President's new budget will lower that processing time to 145 days. 
Although Senator Lincoln and I applaud the President's recent efforts 
to improve the veterans' claims process, we still feel that our 
Nation's veterans deserve much better.
  Therefore, our amendment will directly address the staff and resource 
shortages at the VBA by providing $64.5 million in order to hire an 
additional 600 disability claims processors. Additionally, the Board of 
Veterans Appeals, whose workload has increased by 82.5 percent since 
2001--to an estimated 40,000 cases by the end of 2007--has seen 
decreases in staff levels during the same period. As a result, a GAO 
report found that it took an average of 657 days to resolve these 
appeals. Our amendment will provide the Board of Veterans Appeals with 
$4.1 million to hire an additional 32 processors in order to expedite 
the adjudication process to acceptable levels.
  I also believe that comprehensive training and skill certification 
programs must be implemented in order to reduce the claims backlog and 
ensure that processing personnel make accurate decisions. The 
prevalence of new and complex disability claims resulting from 
posttraumatic stress disorder, PTSD, and traumatic brain injury, TBI, 
provide further evidence of the VA's need for a larger and more 
advanced processing staff. Thus, our amendment will provide a 1-year 
cost for increased training resources and quality measures with 
$400,000 for training and performance support systems and $400,000 for 
skills certification.
  I have nothing but the utmost respect for those brave Americans who 
served in uniform with honor, courage, and distinction. The obligation 
our Nation holds for its veterans is enormous, and it is an obligation 
that must be fulfilled every day. At a time when over 600,000 
courageous men and women have returned from combat in both Iraq and 
Afghanistan, and over 24,000 servicemembers have been wounded since the 
onset of Operation Enduring Freedom and Operation Iraqi Freedom, 
Congress must now do everything in its power to answer our veterans' 
call, to ensure that they receive the benefits that they rightly earned 
and rightly deserve. I strongly urge my colleagues to support this 
amendment. Our veterans deserve nothing less.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I wish to thank Senator Lincoln for this amendment. We 
all know there is a claim backlog that is absolutely unacceptable. 
According to the General Accounting Office, between fiscal years 2003 
and 2006, the backlog of veterans waiting on ratings claims grew by 
almost 50 percent, including those filed by veterans of the Iraq and 
Afghanistan conflicts.
  Similar problems have been cited at the Department of Defense. That 
is an unacceptable backlog. I wish to thank the Senator for offering 
this amendment, which I might add is paid for. I especially thank the 
Senator for that.
  We now have the Senator from Wyoming.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I would suggest that we settle up the post-6 o'clock 
period, if the chairman is agreeable with that at this time, with a 
unanimous consent request along the lines of what the chairman earlier 
outlined.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I ask unanimous consent that we next go to the Senator 
from Wyoming, Mr. Thomas, for 10 minutes. Is that acceptable to the 
Senator? We then go back on the previous schedule. At 4 o'clock, we 
recognize Senator Bayh for 10 minutes.
  Mr. GREGG. The previous schedule assumed Senator Kyl.
  Mr. CONRAD. We would stay with the schedule we had, but at 4 o'clock 
we would go to Senator Bayh for 10 minutes. Then after the votes are 
completed, that we have the first half hour dedicated to the minority, 
for people with the right to speak on amendments for up to 15 minutes 
each. That from 6 to 6:30, the time is under the control of the 
minority; from 6:30 to 7, the time is under the control of the 
majority; from 7 to 7:30, the time is under the control of the 
minority, back and forth in those half-hour blocks of time. Senators 
would be permitted to speak. They would be able to speak on amendments 
but not to offer amendments during that period.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, also I would note, for the edification of 
our side of the aisle, our first group of speakers will be in this 
order: Senators Domenici, Specter--they will go 15 minutes each--
starting at 6; Senator Grassley and Senator Hatch, second half hour; 
Senator Voinovich and Senator Brownback, the third half hour; Senator 
Chambliss, Senator Thomas, the fourth half hour; Senator Graham, 
Senator Burr, the fifth half hour.
  If there are Members, additional Republican Members, who wish to get 
time in this post-6 o'clock period, I wish they would get in touch with 
us.
  If any of these Members whom I just listed who had gotten in touch 
with us--we basically listed them in the order they got in touch with 
us--wish to adjust their time, we will try to work with them. But that 
is the game plan at the moment, so everyone is on notice.
  Mr. CONRAD. I say to the Senator, we may want to think about 
interspersing Senators because it would be unfortunate if Senators did 
not appear and there was a large block of time where people were 
waiting. We are probably going to want to work out some mechanism where 
Senators, if they are here, we allow them to go forward.
  The PRESIDING OFFICER. The Senator from Iowa.


                      Amendment No. 464 Withdrawn

  Mr. GRASSLEY. Mr. President, I ask unanimous consent to withdraw my 
amendment dealing with payment limitations on farm programs.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I thank the Senator very much. He has, as always, been 
very courteous and very helpful in allowing the budget resolution to 
proceed.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.

[[Page S3575]]

  Mr. THOMAS. Mr. President, I ask unanimous consent that the pending 
amendment be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 498

                 (Purpose: To strike the reserve funds)

  Mr. THOMAS. Mr. President, I have an amendment numbered 498 at the 
desk, and I ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Wyoming [Mr. Thomas] proposes an amendment 
     numbered 498.

       On page 48, beginning with line 17, strike all through page 
     62, line 7.

  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. The reason we are here, of course, is to deal with the 
budget. I think that is a very important part of what we do in this 
Congress. It has to do with funding programs, but it has also to do 
with determining what our spending is going to be in the year.
  Frankly, for many of us, having some idea, some control over spending 
is one of the key issues we face. The amendment I am offering would 
bring some transparency, restraint, and I hope discipline to this 
budgeting process. The budget resolution is supposed to provide the 
blueprint for Government spending and allocate dollars for 
appropriators in the future. That is what it is for. That is why we do 
it in the budget, so that for this year we will have a budget that 
says: Here are the programs, here are the dollars, this is what we do.
  To be sure, it is a difficult task. It is always difficult, and there 
are limited resources and always unlimited demands and infinite 
requests. It is a tough job putting together a budget. However, it 
requires hard choices. I understand that. It is a time when we make 
choices among the competing priorities, and that is what budgeting is 
for. That is, in fact, the purpose of the budget.
  I am concerned, in this budget, about the reserve funds that are 
placed there. This budget abdicates responsibility in a number of areas 
and fails to even set a cap on overall spending. The primary mechanism 
by which this happens is because of the so-called reserve funds.
  This budget contains 22 separate funds, the purpose of which is to 
allow spending beyond the limits specified in the budget decision. In a 
vast majority of cases, the additional spending authority is totally 
unchecked. Not only is spending unchecked, there is actually no money 
in any of these reserve funds.
  Of course, each of them is specified to be deficit neutral. What does 
that mean? What it means is that, in a budget that includes not a 
single penny of net spending restraint, taxes can be raised to pay for 
any reserve fund spending. This could be an additional $1 trillion in 
tax increases already assumed in the budget.
  So that is the opportunity that is provided because of this reserve 
provision. Now, I know we have designated reserve funds in the past for 
various things, but the practice is not one we should encourage or 
continue or proliferate.
  The American people sent a message last November. They want fiscal 
discipline. I could not agree more. And no more ``business as usual'' 
when it comes to spending. So we have a budget but then we have a way 
to say: I want to expand the budget. And we pay for it by increasing 
taxes. So we really say: We do not have a budget at all until we are 
through with the year. I cannot understand that. So I hear the folks 
who are saying we need to control spending.
  Perhaps my friends on the other side of the aisle are not quite as 
conscious of that as we are. Even if we do make a miscalculation in the 
budget resolution, we need to move funds from one area to another, and 
that should be spending neutral. In other words, we should make hard 
choices, decrease spending in one area if we have to increase it in 
another.
  As it is currently constructed, these reserve funds are the 
equivalent of a blank check signed by the American taxpayer. So these 
tax-and-spend funds need to be eliminated. I urge my colleagues to join 
me in support for this amendment.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CONRAD. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, it is a quarter to 3. Next up is Senator 
Kyl, to be recognized for an hour, equally divided, on an estate tax 
amendment. Then we will have Senator Bayh at 4 o'clock. Those are 
pending matters.
  These are the votes which are now in order, I advise my colleagues: 
the Hutchison sales tax amendment, the Ensign means testing Part D, the 
Sanders amendment to provide additional funding for education, the Enzi 
amendment that involves small business, the Coleman amendment on 
energy, the Carper amendment, and the Lincoln amendment on veterans. 
Those are amendments which have already been offered. At 3 o'clock, we 
will be going to the Kyl amendment for an hour, equally divided.
  Let me again say to colleagues and staffs who might be listening, we 
will be going to votes at roughly 4:15. We will then be voting until 6 
o'clock. We would like to get as many of these votes concluded as we 
can this evening because that will reduce vote-arama tomorrow. Again, 
colleagues should be aware, starting at 6 o'clock, in half-hour blocks 
of time, there will be opportunities for colleagues to talk about their 
amendments they may offer tomorrow or to talk about the budget 
resolution itself. We will go fairly late tonight with Senators having 
an opportunity to speak. When we are done today, all but a half hour 
will be yielded back. Senator Gregg and I will have that time to wrap 
up. Then we will be going into vote-arama tomorrow. I believe that 
starts at 9:30 tomorrow morning.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Does the debate start at 9:30 on the half hour that is 
reserved?
  Mr. CONRAD. We should start at 9 o'clock.
  Mr. GREGG. That is fine.
  Mr. CONRAD. I think we would want to start at 9 o'clock with our half 
hour to be equally divided between the two of us and then go right to 
the voting starting at 9:30. It is our intention to try to conclude by 
4 o'clock. It is very important that Senators give notice to the 
managers about amendments they seek to have considered during vote-
arama.
  Let me break this down. From 9:30 to 4--that is 6\1/2\ hours--we can 
do about three votes an hour. We would be talking about 19 votes. We 
could probably get in 19, perhaps 20 votes in that time. That is 
realistic. That is hard, but it can be done.
  It is going to be incredibly important, for us to finish this budget 
resolution tomorrow, that colleagues show restraint with amendments 
they insist on considering. We have already considered many amendments. 
Senators have had a full opportunity for debate and discussion. 
Goodness knows, we took dozens of Senators' suggestions in drafting 
this budget resolution. I am asking--I am speaking to my side of the 
aisle--Senators to show real restraint in terms of the amendments they 
insist on because we must conclude our business by 4 o'clock tomorrow. 
If we do not, it is going to go on into some other time, either on into 
tomorrow tonight or on into Saturday. Maybe we could stay here all 
Friday night. Wouldn't that be fun? Please, this is the time to show 
discipline.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I have agreement with Senator Thomas that 
his amendment will be voted on on Friday. That is not a part of the 
next tranche of votes. It will be in order on Friday to be voted on. He 
therefore no longer wishes to speak this evening. He made his points 
just now.
  I would advise Senator Graham and Senator Burr that they have both 
moved up on the list. It looks to me that we will have seven votes, 
maybe eight or nine potentially in order starting at 4:15.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S3576]]

  The bill clerk proceeded to call the roll.
  Mr. CONRAD. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                      Amendments Nos. 538 and 542

  Mr. CONRAD. Mr. President, I ask unanimous consent to agree to the 
Carper amendment No. 538 and the Lincoln amendment No. 542.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 538 and 542) were agreed to.
  Mr. CONRAD. I thank the Chair and my colleagues. That helps us make 
progress. It reduces the number of votes that will have to be 
considered when we get to votes in the 4:15 time range.
  This may be a good time to again alert colleagues that we are looking 
to a series of votes starting at roughly 4:15. Votes will end at 6 
o'clock. There will then be half-hour blocks of time available to the 
minority and the majority in alternating half hours for people to speak 
on their amendments or on the budget resolution.
  We now are awaiting Senator Kyl for his amendment. At the end of that 
hour, which will be evenly divided between the sides, we will have 
Senator Bayh recognized for 10 minutes.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Klobuchar). Without objection, it is so 
ordered.
  Mr. GRASSLEY. Madam President, lately we have heard a lot about the 
alternative minimum tax. It is a problem around here we have talked 
about and not done much about over a long period of time, whether 
Republicans have controlled this body or Democrats have controlled this 
body. Most often, we talk about the difficulties of really fixing the 
alternative minimum tax. Obviously, then, it is not a new problem. It 
has been with us for several decades.
  The individual minimum tax, the precursor to the alternative minimum 
tax, as we call it now, dates from 1969. Congress then discovered, 
somehow, 155 taxpayers with incomes greater than $200,000 a year were 
not paying any taxes because they could legally avoid those taxes. So 
it was calculated that everybody ought to be paying a little minimum 
tax, and that is where the alternative minimum tax comes from. At that 
particular time, it was affecting about one taxpayer in half a million. 
Now, clearly, the situation has changed in the last 38 years.
  Although not its only flaw, the alternative minimum tax's most 
significant defect is it is not indexed for inflation. This failure to 
index the exemption and rate brackets--the parameters of the 
alternative minimum tax system--is also a bipartisan problem. Though 
$200,000 was not an incredible amount of money in 1969, the situation 
is different today. I am not saying $200,000 is not a lot of money 
today, because it is, but $200,000 today will not buy what it would buy 
in 1969.
  In 2004--the most recent year for which the Internal Revenue Service 
has complete tax data--instead of having 155 people paying this tax, 
more than 3 million families and individuals were hit by the 
alternative minimum tax. This chart I have in the Chamber has the 
numbers for every State in the Union. I am not going to go down those 
numbers now because we do not have time. But you can see, State by 
State by State, there are tens of thousands of people paying the 
alternative minimum tax who were never intended to pay it, even though 
we have taken some action in recent years so yet more people are not 
paying the alternative minimum tax.
  This does not even begin to hint at what will happen if we do not 
continue to protect taxpayers from the alternative minimum tax. Barring 
an extension of the hold harmless contained in the 2006 tax bill, the 
alternative minimum tax exemptions will return to their pre-2001 
levels. At the end of 2006, provisions allowing nonrefundable personal 
tax credits to offset AMT tax liability expired. If further action is 
not taken, it is estimated the alternative minimum tax will claim 35 
million families and individuals by the end of this decade.
  Now, think of that: A tax originally conceived to counter the actions 
of just 155 taxpayers could hit 35 million filers in just a few years, 
and I am talking about just around the corner. Some analyses show that 
in the next decade, it may be less costly to repeal the regular income 
tax than it would be to repeal the alternative minimum tax.
  The AMT is a problem that has been developing for almost 40 years. On 
numerous occasions, Congress has made adjustments to the exemptions and 
the rates, though not as part of a sustained effort to keep the AMT 
from further absorbing our Nation's middle class until 2001. We did 
repeal it in 1998, but President Clinton vetoed it. We never, then, 
were able to get it repealed. So I am arguing for repeal.
  Despite the temporary measures we have taken, the alternative minimum 
tax is still a very real threat to millions of taxpayers who were never 
supposed to be subject to the minimum tax. That the AMT has grown 
grossly beyond its original purpose, which was to ensure the wealthy 
were not exempt from an income tax, is indisputable, and that the AMT 
is inherently flawed would seem to be common sense.
  Despite widespread agreement that something needs to be done about 
the AMT, agreement on what exactly to do is not very widespread. A 
major factor in the disagreement relates to the massive amount of money 
the AMT is supposed to be bringing into the Federal Government over the 
next few years--but remember, supposed to be bringing in from taxpayers 
who were never supposed to pay it in the first place. In 2004, AMT 
filers paid more than $12.8 billion into the Treasury.
  If we do not extend the most recent AMT hold-harmless provisions that 
expired at the end of 2006, that number is projected to balloon to a 
much greater amount, and long-term budget forecasts currently show this 
greater amount coming into the Treasury.
  When forecasters put their projections together, they are working 
under the assumption that the hold harmless which was extended in last 
year's tax bill will not be extended, that we will not take care of 
this problem. So they are guessing there is a whole bunch of revenue 
coming in from people who were never intended to pay it in the first 
place. Because of this, budget planners make the assumption that 
revenues will be much higher than everyone who is frustrated with the 
AMT thinks they ought to be. The reason for this is that the AMT 
``balloons'' the revenue base, as it is projected to increase revenues 
as a percentage of gross national product. There is a great deal of 
evidence to support this.

  Now, the nonpartisan Congressional Budget Office has consistently 
forecast the ballooning of AMT revenues year after year. This chart I 
have in the Chamber shows that with the red line. It takes into 
consideration that we are going to bring revenue in from people who 
were never supposed to pay it in the first place.
  I just want to note that although the Tax Increase Prevention and 
Reconciliation Act of 2005 was signed into law after this analysis was 
published, the 2006 tax bill extended the AMT hold harmless only 
through December 31 of last year, and this chart shows Federal revenues 
all the way to the year 2050. It is important to note the long-term 
effects of the AMT on the revenue base because that is what is at 
issue: the basic idea that we are going to receive a lot of revenue 
from middle-income taxpayers who were never intended to pay it--which 
is part of that red line we have to get rid of because why tax people 
if they were not supposed to be taxed? The law is corrected from time 
to time to keep it from happening.
  There may be some doubters who hesitate to attribute this ballooning 
of revenues to the AMT. But this next chart illustrates the drastic 
expansion of the AMT under current law over the next 43 years.
  The Congressional Budget Office's report also states:

       [B]y 2050, roughly 15 percent of individual income tax 
     liability would be generated by the AMT, compared with about 
     2 percent today.

  This is what will happen if we do not do anything.
  The problem with all of the projections showing the AMT ballooning 
revenues is that these projections are used

[[Page S3577]]

to put together the budget we have before us. Now, this is not a 
Senator Conrad problem. This is not a Democratic problem. This is a 
bipartisan problem. Republican and Democratic budgeteers rely on the 
same source of revenue--or I should say a source of revenue the 
Congressional Budget Office says is going to come in from people who 
were never intended to pay it.
  This means the central problem in dealing with the alternative 
minimum tax is money. There are some people who say we can only solve 
the AMT if we offset the revenue and it can be found elsewhere to 
replace the money the AMT is currently forecast to collect. But we 
never intended to collect it from the people who we suppose are going 
to pay it. Anyone who says this sees the forecasts showing revenues 
being pushed up as a percentage of gross domestic product and wants big 
government to keep them up there.
  These arguments are especially ridiculous when one considers that the 
alternative minimum tax was never meant to collect so much revenue. It 
is a failed policy in many ways.
  The alternative minimum tax has even failed in its objective to 
ensure no citizen, no matter how wealthy, was able to completely avoid 
the Federal income tax, because in 2004, the Commissioner of IRS, Mr. 
Everson, informed the Finance Committee that the same number of 
taxpayers, as a percentage of the tax-filing population at large, 
continues to pay no Federal income tax. It boils down to the fact that 
the class of 155 people the law was set up for in the first place, in 
1969, is even finding ways out of getting hit by the alternative 
minimum tax, and doing it legally because we have 2,366 taxpayers with 
incomes of $200,000 or more who do not use the medical and dental 
deduction had no income tax and no alternative minimum tax. The AMT has 
failed in every way except the ability to make Government bigger, or at 
least make it look bigger, and for those who think you ought to have an 
offset, to keep it big. The AMT has failed. While it may be hard for 
some to turn down taxpayers' money, whether we are supposed to collect 
it or not, no one has trouble spending the money--even the blue smoke 
money that is in that red line there.

  It is simply unfair to expect taxpayers to pay a tax they were never 
intended to pay, and it is even more unfair to expect them to continue 
to pay for that tax once we get rid of it. The reform or repeal of the 
AMT should not be offset because it is money we were never supposed to 
collect in the first place.
  The way to solve this problem is to look on the other side of the 
ledger, to the spending side. Budget planners need to take off their 
rose-colored glasses, because that never materializes, and if it does, 
you are going to ruin the middle class. So take off your rose-colored 
glasses when looking at long-term revenue projections and read the fine 
print.
  In general, it is a good idea to spend money within your means, and 
this is true in this case for the Government as well. If we start 
trying to spend revenues we expect to collect in the future because of 
the alternative minimum tax, we are living beyond our means. We need to 
stop assuming record levels of revenue are available to be spent and 
recognize the alternative minimum tax is a phony revenue source.
  As we consider how to deal with the alternative minimum tax, we must 
first remember we do not have the option of not dealing with it. The 
problems will only get worse every year and make any solution even more 
difficult. We must also be clear the revenue the AMT would not collect 
as a result of repeal or reform should not be offset as a condition of 
a repeal or reform. We shouldn't call it lost revenue because it is 
revenue we never had to begin with.
  A few weeks ago I presented to this body a joint tax estimate of how 
various proposed fixes to the AMT will impact revenues expected to be 
collected under current law. I noted at that time that full repeal 
aside, each of these proposals will still allow the alternative minimum 
tax to bring in hundreds of billions of dollars into the Treasury. If 
you consider any proposal aside from full repeal, you are saying 
hundreds of thousands, if not millions, of taxpayers out there deserve 
to bear the burden of the AMT. In other words, the middle class that is 
so talked about on this floor of this Senate to protect, the only way 
they are going to be protected is the extent to which we do away with 
this tax.
  Suppose we are able to continue enacting 1- or 2-year temporary 
patches, as we have done. First, this strategy assumes Congress will 
have the time and the inclination to spend time dealing with the 
alternative minimum tax every year or two. This means whatever the 
issue of the day might be--Iraq, unemployment, natural disasters--
Congress will have to stop dealing with those other problems and return 
to a problem we should never have had to deal with in the first place. 
Is the alternative minimum tax an issue that we as a legislative body 
want to revisit every year? Wouldn't it be better to solve it once and 
for all, particularly since it is phantom revenue, taxing middle-class 
Americans who were never supposed to pay it in the first place? 
Remember, only 155 taxpayers were targeted with this tax in 1969.
  Second, every time Congress attempts to enact or extend a temporary 
fix, the same revenue issues are going to come up. Budget projections 
create the illusion of forgone revenues given up because of an 
alternative minimum tax hold harmless. Every time a patch is 
considered, there is another chance for taxpayers to be subject to this 
stealth tax increase.
  Clearly, there is only one way to fix the AMT so no taxpayer is 
subjected to what has become a complete policy failure. We must 
completely repeal the individual AMT. There is a bipartisan consensus 
that only complete repeal is an adequate solution to this problem. 
Chairman Baucus, along with this Senator, Senator Crapo, Senator Kyl, 
Senator Roberts, Senator Schumer of New York, and Senator Smith last 
month introduced the Individual Alternative Minimum Tax Repeal Act.
  We must repeal the AMT and we must do it without offsetting any 
revenue the AMT is expected to collect in the future. I have made this 
point before, but it is important. The alternative minimum tax was 
never intended to be a significant source of revenue. It was only meant 
to hit a few people who could legally avoid paying the tax with the 
idea that everybody living in America ought to pay a little bit of 
income tax for the privilege of benefiting from this great economy we 
have. Despite this, the alternative minimum tax will balloon revenues 
to historically high levels if something isn't done, as my colleagues 
can see right there on the chart.
  If we consider the AMT to be a fundamentally unfair tax, any tax that 
would replace it would be equally unfair. Anyone who wants equity to be 
a fundamental value represented in our Tax Code and who wants fair 
treatment for this country's middle-class taxpayers must support my 
amendment for complete repeal of the individual income tax.
  I filed an amendment that repeals the AMT. I am going to push this 
body to speak on this proposal for these reasons: We need to get 
Members who say they support AMT repeal to show their support for the 
record; second, to eliminate the mythical budgeting that results from 
assuming current levels of AMT revenues; third, to show the American 
people we will walk the walk on the AMT repeal and not just talk the 
talk.
  I know some who oppose my amendment will argue two points: that there 
is $180 billion in the budget for tax relief; and secondly, we can't 
afford the repeal of AMT.
  As to the first point, the purpose of the Baucus amendment, which I 
supported yesterday, was to deal with less than half of the tax relief 
that expires in the year 2010. In a sense, Members have indicated where 
they want that money to go, and that revenue loss is built into the 
post-2010 period.
  As to the second point, we can afford to repeal the AMT because 
revenues remain at or above record levels in the outyears with the AMT 
gone. Honest budgeting would recognize it as fictional in any event.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.


                           Amendment No. 583

  Mr. KYL. Madam President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:


[[Page S3578]]


       The Senator from Arizona [Mr. Kyl] proposes an amendment 
     numbered 583.

  Mr. KYL. I ask that further reading of the amendment be dispensed 
with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:


                           amendment no. 583

   (Purpose: To reform the death tax by setting the exemption at $5 
 million per estate, indexed for inflation, and the top death tax rate 
at no more than 35% beginning in 2010; to avoid subjecting an estimated 
119,200 families, family businesses, and family farms to the death tax 
   each and every year; to promote continued economic growth and job 
    creation; and to make the enhanced teacher deduction permanent)

       On page 3, line 11, decrease the amount by $20,000,000.
       On page 3, line 12, decrease the amount by $388,000,000.
       On page 3, line 13, decrease the amount by $886,000,000.
       On page 3, line 14, decrease the amount by $17,390,000,000.
       On page 3, line 15, decrease the amount by $14,602,000,000.
       On page 3, line 20, decrease the amount by $20,000,000.
       On page 3, line 21, decrease the amount by $388,000,000.
       On page 3, line 22, decrease the amount by $886,000,000.
       On page 3, line 23, decrease the amount by $17,390,000,000.
       On page 4, line 1, decrease the amount by $14,602,000,000.
       On page 4, line 7, increase the amount by $10,000,000.
       On page 4, line 8, increase the amount by $40,000,000.
       On page 4, line 9, increase the amount by $472,000,000.
       On page 4, line 10, increase the amount by $1,246,000,000.
       On page 4, line 16, increase the amount by $10,000,000.
       On page 4, line 17, increase the amount by $40,000,000.
       On page 4, line 18, increase the amount by $472,000,000.
       On page 4, line 19, increase the amount by $1,246,000,000.
       On page 4, line 24, increase the amount by $20,000,000.
       On page 4, line 25, increase the amount by $398,000,000.
       On page 5, line 1, increase the amount by $926,000,000.
       On page 5, line 2, increase the amount by $17,862,000,000.
       On page 5, line 3, increase the amount by $15,848,000,000.
       On page 5, line 7, increase the amount by $20,000,000.
       On page 5, line 8, increase the amount by $418,000,000.
       On page 5, line 9, increase the amount by $1,345,000,000.
       On page 5, line 10, increase the amount by $19,207,000,000.
       On page 5, line 11, increase the amount by $35,054,000,000.
       On page 5, line 15, increase the amount by $20,000,000.
       On page 5, line 16, increase the amount by $418,000,000.
       On page 5, line 17, increase the amount by $1,345,000,000.
       On page 5, line 18, increase the amount by $19,207,000,000.
       On page 5, line 19, increase the amount by $35,054,000,000.
       On page 25, line 16, increase the amount by $10,000,000.
       On page 25, line 17, increase the amount by $10,000,000.
       On page 25, line 20, increase the amount by $40,000,000.
       On page 25, line 21, increase the amount by $40,000,000.
       On page 25, line 24, increase the amount by $472,000,000.
       On page 25, line 25, increase the amount by $472,000,000.
       On page 26, line 3, increase the amount by $1,246,000,000.
       On page 26, line 4, increase the amount by $1,246,000,000.

  Mr. KYL. Madam President, let me discuss this amendment briefly. It 
is cosponsored by Senator Thune from South Dakota. It is called the 
Kyl-Thune death tax reform amendment.
  Yesterday we had a vote on an amendment that included several items, 
including death tax reform, and I believe some people might have voted 
against that because items in the bill included a continuation of the 
current rates for the capital gains tax and the tax on dividends. 
Because of that fact, we decided to make this basically a clean vote.
  The only thing this bill deals with other than death tax reform is 
the continuation for teachers of the teacher tax deduction which we 
make permanent. This is the deduction that allows a teacher, when she 
pays or he pays for some items that are then taken to school to help 
the kids with their lessons, when they pay for those out of their own 
pocket--we think there should be a $250 deduction to help defray the 
cost of those items. That is all that is in this amendment now.
  This Kyl-Thune amendment provides room in the budget resolution to 
enact meaningful tax reform. Obviously, I still believe repeal of the 
death tax is the best option. We have been trying to find agreement on 
a permanent reform, because planning for death tax now is a nightmare 
for families, and it is a nightmare right now because of the way this 
law is being phased out and then comes back with a vengeance to its 
previous form. It is a bonanza for the insurance companies, to be sure, 
and they are leading the opposition to the death tax reform. But they 
are wrong.
  As a matter of fact, when the lobbyists for the insurance industry 
came to my office to argue this, I said: Before you make your argument, 
let me ask you to assume for a moment we have found a way to eliminate 
death. Now, you represent the undertakers; go ahead and make your case. 
That is the case with the insurance companies. They are making a lot of 
money on the backs of people who have to spend money to plan against 
the death of the person in their family who runs the farm or has the 
small business.
  There is a far better way to use all of that money that is spent each 
year on avoiding the tax or preparing to pay for it. As a matter of 
fact, what we have found is there is almost an equal amount of money 
that is spent complying with the avoidance costs as there is in 
collection for the Government. Alicia Munnell, who was a member of 
President Clinton's Council of Economic Advisers, estimated the costs 
of complying with the estate tax laws are roughly the same as the 
revenue raised. The estate tax is expected to raise about $28 billion 
in fiscal year 2006. If the estate tax generates a dollar in compliance 
costs for every dollar in revenue, then obviously the aggregate cost of 
the tax is about $56 billion. The point is, for every dollar of revenue 
raised by the estate tax, another dollar is simply wasted to comply 
with or avoid the tax. Maybe I shouldn't say ``wasted.'' It does go to 
the insurance companies. So let me strike ``wasted.''
  But the bottom line is we can do better. What this amendment does is 
to allow the budget to accommodate estate tax reform. I didn't pick my 
bill, even though I happen to think it is the best reform bill; I took 
a bill that has been provided by the senior Senator from Louisiana and 
has been supported by people on the other side of the aisle such as the 
junior Senator from Arkansas. What the budget would do is accommodate 
that particular death tax reform. It could accommodate other death tax 
reform as well, so long as it was within the amount of money we have 
provided here. The amount of money in this amendment is a total of 
about $32 billion over 5 years, and that needs to be added to the 
amount the Baucus amendment already provides for estate tax reform 
which would be a total of about $61.7 billion over a 5-year period.
  The bill that was provided or written by the senior Senator from 
Louisiana provides a $5 million exemption indexed for inflation, which 
I think is a perfectly appropriate amount, a family business carve-out, 
which is very difficult to do legally, and a 35-percent top rate. That 
is where I differ, because 35 percent is still a very high top rate. It 
also recaptures the benefit of the $5 million exemption for estates 
valued over $100 million. The revenue provided for the death tax reform 
in the 5-year budget window is about $31.7 billion, as I said. The 
teacher deduction is about another $400 million, for a total of about 
$32 billion.
  As I said, the amendment is structured so when it is combined with 
the Baucus amendment approved yesterday, the total amount of revenue 
would be sufficient to accommodate the Landrieu reform bill. If you 
take both amendments together, the Baucus amendment and Kyl-Thune, as I 
said, the total amount is about $61.7 billion, not offset with 
additional revenues. As a matter of fact, I don't believe existing law 
extensions--and, indeed, this is precisely what we would be talking 
about here--should have to be offset, particularly where they are 
actually provisions that enhance economic activity, just as extensions 
of existing mandatory spending need not be offset.
  The amendment approved yesterday included an estate tax provision 
that

[[Page S3579]]

frankly I very strongly disagree with. In fact, some would say it is an 
insult to every family business or every family farm that is seeking 
relief. Not surprisingly, it is strongly endorsed by the insurance 
industry, because it provides for a 45-percent rate. Now, if you have a 
45-percent rate, you are going to want to plan against that. You do not 
want to have to pay that rate on the estate that is left after your 
death. As a result, since the Government has taken about half your 
property above the exempt amount, you are going to want to plan against 
that. That is why I think we can do better than that, and this proposal 
does that.
  Remember, the budget that has been proposed here allows increases on 
taxes on almost every single taxpayer, a total of about $736 billion 
over 5 years, which is, I believe, about 3 times larger than the 
biggest tax increase ever enacted in our history. The amount adopted 
yesterday by the chairman of the Finance Committee took the budget out 
of balance. It created a deficit, in other words, of about $6 billion 
in the year 2012. We believe the spending restraint we are capable of, 
combined with a very strong economy, will enable us to balance the 
budget by 2012 without increasing taxes.
  Now, it is true the budget before us makes it impossible, because of 
the amount of spending in it, to balance the budget without a record 
level of tax increase. Unfortunately, that includes a confiscatory tax 
on thousands of American families. The budget resolutions don't dictate 
policy to the Finance Committee, but it would certainly be our 
intention to work with Senator Landrieu, Senator Pryor, and Senator 
Lincoln, who has been very much a leader in this area, and others to 
craft an estate tax reform proposal that would provide an exemption of 
at least $5 million indexed for inflation and provide workable relief 
for the smallest estates and farms, and a top rate that is no higher 
than 35 percent--hopefully lower.
  We believe that this can be accomplished and that, as a result, my 
colleagues who might have opposed this amendment yesterday because it 
included the capital gains and dividend tax rates should be in a 
position to support the resolution that will be voted on today because 
of the fact that it accommodates a proposal supported by Members of 
both the majority and minority. It will be voted on tomorrow; I 
misspoke. I would like to have it voted on today.
  A couple of other items, and I see my colleague, the Senator from 
South Dakota is here. I want him to speak to this. There are a couple 
of misconceptions I wish to address. According to the Joint Tax 
Committee, the total number of estate tax returns projected for 2011 
alone is 131,000. By 2015, about 177,000 estates will file tax returns 
in that year alone. These are the numbers for each year. Some people 
had the idea that these were the numbers over 5 or 10 years; no, this 
is for each year.
  The first misconception is that it doesn't apply to that many people. 
An awful lot of people need to file these returns. Secondly, the death 
tax, similar to other taxes, is very sensitive with respect to economic 
growth. When businesses can put this money back into their business and 
create jobs, rather than pay the estate planning to insurance 
companies, it helps our economy as well as helping the business grow. 
An entrepreneur or an investor will have a very big disincentive to 
grow their business, regardless of the amount of the exemption, above 
that exempted amount if the tax rate imposed on new growth over and 
above the exemption is too high.
  We can argue about what the tax rate ought to be. But I think almost 
everybody would agree the tax rate of 45 percent is confiscatory. What 
incentive does somebody have to grow his business beyond the exempt 
amount if the Government will take nearly half of everything over that 
exempt amount?
  A couple of other points. We have historical evidence that the estate 
tax reduces capital stock in the U.S. economy. This is part of the 
reason we have grown so well in recent years, because of the downward 
projection on the estate tax and the hope that it will be eventually 
eliminated.
  In a report by the Joint Economic Committee, they projected the 
estate tax reduced the stock of capital in the economy by approximately 
$847 billion, or 3.8 percent, over the last 60 years. That is a ton of 
money. By comparison, it has raised, during that same period, less than 
that--only $761 billion. So it has taken far more out of the private 
sector and hasn't added that much to the Government sector. This is 
money that could have been put to productive use.
  I mentioned the fact that the avoidance costs are about equal to the 
take for the Government as well. That is another reason for this 
reform.
  I will close with this point: Americans understand the rates now are 
confiscatory, that it is unfair; and even people who understand that 
they will never be subject to the estate tax appreciate its effect on 
others and understand it is an unfair tax. In a Gallup Poll from an 
April 2006, 58 percent of respondents said--and they called it the 
``inheritance tax'' and didn't use the words ``death tax.'' They said 
the inheritance tax is unfair, and this confirms results of polls taken 
in both previous years. It is always called ``the most unfair tax'' 
when you list it among all the other taxes.
  What is interesting about the Gallup Poll is that even though it was 
taken in April while Americans were filing their taxes, the death tax 
was called unfair--or the ``inheritance tax''--by more people than the 
despised alternative minimum tax that was discussed by the ranking 
member of the Finance Committee. Only 42 percent of respondents said 
the AMT was unfair. Yet it is affecting a lot more people than the 
estate tax. One reason people say it is unfair is because of the 
confiscatory rate, which is 46 percent this year. In the 2005 poll, 
when the rate was 47 percent, 81 percent of respondents said the estate 
tax is ``an extreme form of taxation'' and that the rate was unfair.
  Finally, I note--and this was interesting to me as somebody who has 
studied politics a little bit--after the last election in the exit 
polls, voters were asked whether they thought the death tax was 
somewhat unfair or very unfair. They were broken into Kerry voters and 
Bush voters. Not unsurprisingly, 89 percent of Bush voters believed the 
death tax is somewhat unfair or very unfair. But 71 percent of Kerry 
voters also found the death tax at least somewhat unfair or very 
unfair.
  So this is a view shared by most Americans of all political stripes, 
and it is time for us to reform the death tax, if not repeal it.
  What we have done with this amendment--the Kyl-Thune amendment--is 
accommodate that reform in the budget. I hope my colleagues, when we 
have an opportunity to vote on it, will support it. I want the Senator 
from South Dakota to speak, but I would like a minute at the conclusion 
to talk about the support also coming not just from other small 
business organizations but from minority business organizations and 
others, to demonstrate the breadth of support around the country for 
reform of this very unfair tax.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Through no fault of the Senator from Arizona, we are 
actually into my time on his amendment. As I said to the Senator from 
Arizona, I am prepared to yield some of my time so that some of his 
other speakers have a chance. Also, I don't want to completely give 
away my time because I need to respond. Maybe we can work out an 
agreement so that those people who are here can speak, and I would like 
to have 10 minutes. I was supposed to have a half hour, but I would 
like to retain at least 10 minutes.
  Senator Grassley indicated he would like a minute. He is not here at 
the moment, so perhaps we can go to Senator Thune. We have 22 minutes. 
If I am to retain 10, that leaves 12 minutes. I don't know how the 
Senator wants to divvy up that time.
  Mr. KYL. I appreciate the courtesy of the chairman of the committee. 
If Senator Grassley takes a minute, and we have three other Senators 
who take 4 minutes, that gives me a minute to say thank you and that 
would do it. I propose that as a unanimous consent request.
  Mr. CONRAD. Can we identify the Senators? Senator Grassley for a 
minute, Senator Thune for 4 minutes, Senator DeMint for 4 minutes, and 
Senator Graham for 4 minutes, and a minute to Senator Kyl. That would 
leave me 8 minutes. That is fair enough.

[[Page S3580]]

  Mr. KYL. I thank the Senator.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from South Dakota is recognized.
  Mr. THUNE. Madam President, I thank the Senator from North Dakota for 
accommodating us. I thank the Senator from Arizona for his leadership 
on this issue. I have supported his efforts for some time to get rid of 
the death tax. I have supported getting rid of this unfair tax going 
back to my days as a Member of the House of Representatives.
  Last year, I came down to the Senate floor and gave examples of real-
life family farms that are facing the effects of the death tax. I 
wanted to remind Senators of two of those family farms. I think 
sometimes it gets lost. We think we are dealing with these concepts in 
the abstract, but they affect real people. These stories are real, and 
the effect of the tax is real as well.
  The first example is a 3,000-acre family farm operation in central 
South Dakota. In my State, that is a medium-sized operation. A death 
occurred in this family and, as a result, $750,000 will likely be paid 
in taxes. This is a huge amount of money for a farm operation in my 
State, where land values can make an operation look a lot more valuable 
on paper than they are in reality.
  In other words, farmers such as this can often be described as ``land 
rich'' but ``cash poor.'' All their value is in the land. When a 
massive death tax bill comes due, the only option is often to sell the 
land to pay the unfair and unjust tax. Thus, a family legacy comes to 
an end.
  The second example is a 10,000-acre operation in north central South 
Dakota. Similar to so many farms and ranches in my State, the parents 
who have run the place for decades are getting older. Their kids would 
like to continue in the business, but the death tax on that farm would 
likely be $1.5 million. That would make it virtually impossible for the 
kids to stay on the farm and keep that family farm operation going. I 
find it extremely disturbing that our Federal Tax Code could influence 
a family's ability to keep their family farm from being broken up and 
sold off.
  The budget resolution is more than a list of numbers. It is a 
statement of our priorities. These priorities are going to impact real 
people. I believe our budget should show we are prioritizing family 
farms, family ranches, and small businesses. We can show that these 
family small businesses are a priority by making room in the budget for 
permanent, meaningful death tax reform.
  The death tax is a completely unfair tax because Americans pay their 
fair share of taxes throughout their life on what they earn, what they 
own, what they buy, only to see the IRS take one last bite when they 
die.
  It is also unfair because the Donald Trumps and Paris Hiltons of the 
world have teams of lawyers and accountants to make sure they pay 
little or no death tax. But the family-owned operations and small 
businesses I talked about are the ones that end up paying.
  It is for these reasons that Congress acted a few years ago to repeal 
the death tax, but because of some strange rules that can only be 
devised in a place such as the Senate, the death tax comes back to life 
in the year 2011.
  I believe we need to enact permanent, meaningful death tax reform 
this year. This amendment takes us down that path. I hope my colleagues 
on both sides will support it. I credit the Senator from Arizona for 
drafting this in a way that is consistent with the proposal offered 
last year by a colleague on the other side. I hope Members on both 
sides can support this, and I hope, once and for all, we will get rid 
of this unfair and unjust tax.
  I yield back whatever time I have.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. DeMINT. Madam President, I rise to speak in support of Senator 
Kyl's amendment. A few years ago, Congress did something that was very 
helpful to America. We voted to completely phase out the death tax. I 
think we have discovered in the debate that this is not about just rich 
people, it is about people who own small businesses and small farms. I 
had a number of examples to give, but we are short on time. There is 
one family that had a printing business for 97 years; they have already 
paid the death tax once. They are getting ready to pay it again. We 
have the opportunity to change that.
  Now that we have voted to phase this out, it is not fair that in 
2010, if a small business owner dies, that person can leave their 
family their entire business without any estate taxes; but if that same 
person died in 2011, they could lose up to half their estate. We don't 
need for this to happen. I certainly support Senator Kyl's compromise 
idea. But tomorrow I will call up amendment No. 576--I will not call it 
up today--which will completely eliminate the death tax for another 5 
years. So that what happens in 2010 will continue to 2015. I hope all 
my colleagues will consider this and do the right thing for small 
businesses and farms.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. GRAHAM. Madam President, we had the same discussion yesterday 
when Senator Kyl made a very articulate argument as to why we as a 
Congress need to act, and this budget is a good opportunity to act, to 
get the death tax resolved in a way that will allow people to plan for 
their families and their businesses.
  America is in a terrible spot. If you die New Year's Eve 2010, right 
now, there is no estate tax liability for those who die on that day. If 
you live until January 1, 2011, unless we act, the estate tax comes 
back in full force. That is an unconscionable place to put the American 
public. Total repeal is apparently not possible. I would love to do 
that.
  Senator Kyl's proposal would allow us to buy some more time. He has 
taken a Democratic proposal--about a $5 million exemption and a 35-
percent top rate--to see if we can get the body to allow it within our 
budget resolution to accommodate the extension of the death tax on 
those terms.
  My good friend from North Dakota, who is a joy to work with, is very 
concerned about the debt, and he should be concerned about it. But when 
you talk about the tax cuts and tax relief that we provided in the 
capital gains area and dividends area, I would argue that the revenue 
being generated to this Government is on par with historical averages, 
that the Government is not being deprived of revenue, that the tax cuts 
since 2003 have helped keep this economy humming, and that we are 
getting a lot of revenue because we cut taxes. And if we raise taxes or 
we take the extenders off the table, which this budget will do unless 
we change it, then we are going to cripple an economy that has created 
a lot of jobs and make ourselves less competitive.

  The death tax side is what kind of society we want. There has been a 
budget submitted by the President that is balanced, that has an 
extension of the death tax--under OMB, I think it is $50 billion out of 
balance 5 years from now--but you can accommodate these tax provisions 
and balance the budget.
  I urge my colleagues, if we don't do this now before the end of this 
year, sooner rather than later, let's see if we can come together as a 
body to come up with a compromise on the death tax that will give 
Americans the certainty they need when it comes to planning their 
affairs and come up with a compromise that will reward those who have 
done well, who have worked hard, and they can leave their money behind 
to their families and their communities rather than it all be sent to 
Washington or a lot of it be sent to Washington and people they don't 
know.
  I think Senator Kyl's amendment is a great opportunity for this body 
to address a real problem, a growing problem, and that is the fact that 
no one in America can with certainty plan for their demise and take 
care of their family because the Congress is refusing to act in a 
responsible manner. This amendment will help solve that problem.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Madam President, the Senator has accurately described a 
situation that makes no earthly sense with respect to the estate tax. 
There is no death tax in America. There is none. There is an estate tax 
that applies to estates of over a certain value. Right now, less than 1 
percent of estates are affected. By the time we get to 2009, in

[[Page S3581]]

which the exemption level will rise to $3.5 million per person--so a 
couple with $7 million in an estate, anything below $7 million will pay 
absolutely nothing--it will be down to three-tenths of 1 percent of 
estates paying any tax.
  Then we have this truly bizarre situation in which the next year, the 
estate tax is repealed in 2010, and then in 2011 it snaps back and the 
exemption, instead of the $3.5 million we had in 2009, falls to $1 
million.
  The amendment by Senator Baucus that was adopted yesterday prevents 
the amount of the estate tax exemption from shrinking to $1 million per 
person. He at least puts a floor and says it will not drop below the 
$3.5 million, and that $3.5 million will be adjusted for inflation.
  He also had the extension of the middle-class tax cuts--the marriage 
penalty relief, the 10-percent bracket, the childcare credit. That left 
us with no money left in 2012.
  The problem with the amendment that is now offered by our colleague 
from Arizona, Senator Kyl, is that it is not paid for. That is the 
problem. It puts us back into deficit in 2012. Here we have spent all 
this time and all this work digging out of the deficit ditch, and this 
amendment puts us right back in, to the tune of about a $16 billion 
deficit in 2012.
  We have had speeches all week about how important it was to show some 
fiscal discipline and to stop deficit spending, to balance the books, 
to balance the budget. We are there. We have a budget now that is 
balanced in 2012. But this amendment offered by Senator Kyl, as 
meritorious as it may be in the eyes of some colleagues, as high a 
priority as they have said it is, wasn't a sufficiently high priority 
for them to pay for it. It wasn't of enough importance for them to 
offer the offsets, whether it is spending offsets or revenue offsets, 
to cover the cost. The result is they have put us back into deficit in 
2012.
  For that reason, I will strenuously oppose the Kyl amendment, and I 
give notice to colleagues that, I am told, there will be an alternative 
to accomplish much the same purpose, but one that is paid for, and I 
understand that will be offered tomorrow when this amendment is voted 
on.
  We have had hours and hours of speeches on the floor about the need 
to address the fiscal condition of the country, about the need to first 
balance the budget and then deal with the long-term entitlement 
challenges.
  Look, this is going the other way. This is going the other way. This 
is additional loss of tax revenue without any offset, without any 
replacement, either in spending cuts or alternative revenue. So what it 
does is balloons the debt by over $30 billion and puts the budget of 
2012 back into deficit. That would be a mistake.
  I reserve the remainder of my time.
  I yield 3 minutes to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Madam President, I rise also to oppose this amendment. 
The first point that comes to mind for me is, here they go again. I say 
that with all due respect to my friend from Arizona. But we are seeing 
more, as the Budget chairman has said, of the strategy that got us into 
the hole that this budget is trying to dig us out of.
  It is important to emphasize again what the Budget chairman has said. 
Here is what has happened in terms of numbers of estates that even 
qualified as taxable estates back in 2000. It was 50,000. It has 
dropped to 13,000, and as of 2009, it will be 7,000 estates in the 
entire country that will even qualify for this tax.
  How much is that? We are talking about only .2 percent of estates, 
7,000. The Baucus amendment that we adopted yesterday says that for 
those, it is not going to change. That number is not going to go back 
up. There will be a continuation of the current exemption level. So we 
are talking about .2 percent of the estates being taxed.
  I think almost without exception--I can't speak for every colleague 
on the Senate floor, but I know on this side of the aisle, colleagues 
are very sympathetic and support our family farmers. I have a lot of 
them in my State, and I know you do, Madam President, in your State as 
well, small businesses, family-owned businesses. They build up the 
business, and they want to be able to pass that business on. With great 
pride, the families are engaged and involved. We are not interested in 
seeing anybody lose their family farm or their family business. That is 
why we have supported extending the exemptions so that less than .2 
percent of estates are taxed or eligible to be taxed.
  Frankly, there have been some of us on this side of the aisle who 
have had amendments over the years--I have cosponsored amendments--that 
would exempt family-owned enterprises. If that is what people want to 
do, I think there would be a lot of interest in doing something like 
that.
  But I think behind all the talk of our family farmers and small 
businesses is another picture of a few extremely wealthy families in 
this country whose children or aunts, uncles, sisters, brothers--
someone may benefit through an inheritance. They may have not 
contributed at all to building that wealth and may never have to work a 
day in their life or contribute to this country. The question is, 
Should they have to contribute in some way with the only tax, for 
instance, they might pay is the estate tax?
  I see my time is coming to a close. I want to share one more chart. 
What we are concerned about, what I am concerned about, is the fact 
that last year, the tax cuts that have already been given have already 
disproportionately affected the very wealthy, the most blessed people 
in this country. Anyone earning more than $1 million a year last year, 
in 2006, had a tax cut of over $118,000, which is more than what the 
average person in Michigan or anyone in this country makes in a year.
  So what we are objecting to is this is not helping family farmers and 
small businesses. This is about a tax system and a series of tax cuts 
that are out of whack that have created the situation where, if you are 
working hard every day on that family farm, in that small business, or 
if you are working every day building great American automobiles, such 
as a lot of folks in my State, you didn't see any tax cut or not much 
of a tax cut. But if you are somebody who would benefit in that top .2 
percent who gets the estate tax cut we are talking about, you are 
already being given some pretty big gifts from the current tax system.
  I urge a ``no'' vote.
  Mr. GRASSLEY. Madam President, this budget proposal does not allow 
the Senate to address the unfair burden of the death tax. By 2011, the 
tax will affect all farms and businesses worth more than $1 million at 
a tax rate as high as 55 percent. In the State of Iowa alone, according 
to the USDA, we have more than 20,000 farms worth more then $1 million. 
Those families may be land rich, but they are cash poor, and they have 
to spend too much money today to plan on how to survive the unfair 
death tax. These are not big farms. With land prices today, you can 
have as few as 350 acres in Iowa to have a million dollars in value.
  If the Senate fails to put money in the budget today and we leave the 
death tax in place in its punitive form, our failure to amend this 
budget will create the economic uncertainty that could dismantle our 
farms and small businesses in rural America. I will be voting ``yes'' 
on the Kyl amendment. It puts money in the budget. It is the 
responsible thing to do.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Madam President, if I may take 1 minute to make two quick 
points. I note that the chart of the Senator from Michigan uses the 
figures for the last year of the Bush tax cuts to show in the very best 
light the impact of reductions of a number of estates that pay the 
estate tax. It is a fairly low number, a relatively low number, and it 
will continue to be low if Republicans have their way.
  Unfortunately, the next 2 years, years after which the Bush tax cuts 
expire, in the year 2011, the number goes back up to 131,000 and in the 
year 2015, according to the Joint Tax Committee, nearly 177,000 estates 
will file estate tax returns.
  The second point is that the bottom line is that the 1 year cited by 
the Senator from Michigan does get down to a fairly low number because 
of the Republican tax cuts. Then they expire, and the number shoots 
back up.
  The only other point I wish to make is our budget amendment is 
designed to accommodate a bill offered by the senior Senator from 
Louisiana which was

[[Page S3582]]

not offset at all because those of us who support reform of the death 
tax appreciate its significance in the lives of Americans and the 
priority to eliminate or to reduce that tax.
  Ms. STABENOW. Madam President, will my friend yield for a question?
  Mr. KYL. I suspect I am out of time, but I am happy to yield.
  Mr. CONRAD. What is the time situation?
  The PRESIDING OFFICER. The Senator from Arizona has 3 minutes 34 
seconds.
  Mr. KYL. Off your time.
  The PRESIDING OFFICER. The Senator from North Dakota has no time 
remaining.
  Mr. CONRAD. No, no, no. Somehow the timekeeping is not correct. I 
think the Senator had 1 minute remaining, which I think he has used.
  Mr. KYL. Madam President, I think that is correct.
  The PRESIDING OFFICER. We are looking at the time clocks. You both 
seem to agree, so that is fine.
  Mr. CONRAD. Madam President, let me conclude on this matter.
  First, I thank Senator Kyl. Second, let me make clear, the reason the 
estate tax is going to run out is because of the Bush tax cuts. The 
Bush tax cuts, as passed by the Congress, led to this bizarre situation 
where it is a $3.5 million exemption in 2009, and then it is fully 
repealed in 2010. Then it goes to $1 million a person in 2011. That was 
the action of the Republican Congress in conjunction with the Bush 
administration. They are the ones who created this problem.
  We adopted, as part of this resolution, the Baucus amendment 
yesterday that will prevent in 2011 the exemption from falling to $1 
million a person and will instead keep it at $3.5 million per person, 
which means $7 million for a couple can be shielded without paying any 
taxes. That is indexed for inflation. So just in terms of who did what, 
the fact is, the Republican Congress is the one that constructed this 
bizarre circumstance in which the estate tax is repealed in 2010 and 
then comes back in 2011 with only $1 million per person shielded.

  Let me conclude by saying this: Look, the problem with this 
amendment, they say it is a priority, but they have no money to pay for 
it. The result is that we are faced with a circumstance in which it all 
gets added to the deficit and the debt.
  We addressed this in the Baucus amendment yesterday, the problem with 
the estate tax, but this amendment is not paid for. This amendment will 
take us back into deficit in 2012.
  Mr. CONRAD. Madam President, I see that the Senator from Indiana is 
on the Senate floor. He has the time at 4 p.m. under his control. I 
wish to thank the Senator from Indiana for his graciousness in 
accepting a change in the time. We had earlier told him he would be up 
for 3 p.m., and he very graciously accepted this change to 4 p.m., 
which I appreciate very much.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.
  Mr. BAYH. Madam President, first, let me say to my colleague that I 
have learned over the years that flexibility is an important attribute 
around the Senate. Punctuality is, on the other hand, too rare, so I am 
glad we could combine both today.


                           Amendment No. 526

  Madam President, I call up amendment No. 526, and I ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Indiana [Mr. Bayh], for himself, and Ms. 
     Snowe, proposes an amendment numbered 526.

  Mr. BAYH. Madam President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: Makes permanent the tuition tax deduction and is fully offset 
   by closing a portion of the tax gap through enhanced information 
                        reporting requirements)

       On page 3, line 11, decrease the amount by $120,000,000.
       On page 3, line 12, decrease the amount by $776,000,000.
       On page 3, line 13, decrease the amount by $178,000,000.
       On page 3, line 14, increase the amount by $349,000,000.
       On page 3, line 15, increase the amount by $742,000,000.
       On page 3, line 20, decrease the amount by $120,000,000.
       On page 3, line 21, decrease the amount by $776,000,000.
       On page 3, line 22, decrease the amount by $178,000,000.
       On page 3, line 23, increase the amount by $349,000,000.
       On page 4, line 1, increase the amount by $742,000,000.
       On page 4, line 24, increase the amount by $120,000,000.
       On page 4, line 25, increase the amount by $776,000,000.
       On page 5, line 1, increase the amount by $178,000,000.
       On page 5, line 2, decrease the amount by $349,000,000.
       On page 5, line 3, decrease the amount by $742,000,000.
       On page 5, line 7, increase the amount by $120,000,000.
       On page 5, line 8, increase the amount by $896,000,000.
       On page 5, line 9, increase the amount by $1,074,000,000.
       On page 5, line 10, increase the amount by $725,000,000.
       On page 5, line 11, decrease the amount by $17,000,000.
       On page 5, line 15, increase the amount by $120,000,000.
       On page 5, line 16, increase the amount by $896,000,000.
       On page 5, line 17, increase the amount by $1,074,000,000.
       On page 5, line 18, increase the amount by $725,000,000.
       On page 5, line 19, decrease the amount by $17,000,000.

  Mr. BAYH. Madam President, as you and I have discussed just as 
recently as today, the cost of a college education is an increasingly 
important challenge to middle-class families across Minnesota, Indiana, 
and the rest of our country. Unfortunately, it is a challenge that too 
many families today cannot meet, but it is an important one that we 
equip them to meet.
  For example, 80 percent of the new jobs that will be created over the 
next decade are estimated to require some level of higher education. 
The estimates also show us that a college graduate can expect to make 
fully 75 percent more than someone with only a high school diploma. Yet 
the escalating cost of a college degree is putting it beyond the 
ability of middle-class families to afford.
  Just as an example, over the past 4 years alone the cost of a private 
college education has gone up 28 percent. Over that same period of 
time, the cost of a 4-year public university has gone up 55 percent. 
Regrettably, this will, the estimates show, lead 4.4 million qualified 
students across our country to give up their dream of pursuing a 
college education. That is simply not right, and we need to do 
something about it. Today, we have that opportunity.
  If we don't act, the college tuition deduction currently in place 
will expire at the end of next year, making matters even worse than 
they are today. We can't let that happen. We must act now. Congress 
acted so late last year to extend the college deduction another year 
that the IRS was unable to include it on this year's tax forms, meaning 
that possibly tens of thousands of American families and students who 
qualified for the credit will get out their tax form, not see it there, 
and not get the relief to which they are entitled. We have to do better 
than that, and under our amendment we will.
  Our amendment will make permanent the $4,000 deduction for college 
tuition and fees, and it is flexible, applying to both undergraduates, 
4-year institutions, as well as 2-year institutions. It is squarely 
targeted at the middle class. Individuals making up to $65,000 a year 
and families making up to $130,000 a year will qualify for the full 
$4,000 deduction. Individuals making up to $80,000 a year and families 
making up to $160,000 a year will qualify for up to $2,000 in 
assistance.
  It is also fully paid for. It will cost $5.6 billion over the next 5 
years, but it is offset by a variety of provisions to close the tax gap 
included in the President's budget. So it meets a pressing national 
need facing our middle class, but it does so in a way that is fiscally 
responsible.
  In conclusion, at a time when too many of our middle class are asking 
who in Washington speaks for them, at a time when they realize full 
well that the wealthy can take care of themselves and that we have many 
programs targeted to the less fortunate but nothing really targeted for 
the middle class, this effort squarely meets a major challenge 
confronting middle-

[[Page S3583]]

class families and says to them that we speak for their concerns as 
well.
  At a time when too many of our citizens are saying that Washington is 
irrelevant, that there is too much political fighting and partisanship 
and procedural bickering, and all that kind of stuff, this is something 
that speaks directly to one of their major concerns, and it is about 
time we did something about it. Today, we have that opportunity.
  I thank all those who have helped bring us to this moment. One of our 
colleagues, Senator Schumer, has been a relentless champion of making 
college more affordable for middle-class families for many years now. 
We wouldn't be here without his leadership. I thank also Senator Snowe, 
who is the principal cosponsor of this legislation, and I know full 
well of your personal concern about this as well, Madam President.
  So Democrats and Republicans alike, this is something we can work on 
together, make the government relevant, help the middle class, and do 
it in a fiscally responsible way. I urge its adoption.
  Madam President, I yield the floor.
  Mr. GREGG. Madam President, what is the Senator's offset for this? As 
I understand it, it is money selected from the tax gap; is that 
correct?
  Mr. BAYH. That is correct.
  Mr. GREGG. Well, obviously, I agree with the Senator's initiative 
relative to the education tax credit. That was in the original Bush tax 
cuts, which have done so much good for this economy and for people who 
have benefitted from them, and tuition tax credits is a big part of 
that benefit. People going to college are more readily able to afford 
it as a result of the President putting that in his plan, and I think 
we should extend it.
  I regret that the amendment we offered earlier, which did extend it, 
was voted down, the Kyl amendment. The Senator has now come forward 
with a rifle shot on this item. The tax gap is an illusory number. It 
doesn't exist. We have already more than used it. It has sort of gotten 
to be like Customs fees around here, where a few years ago they just 
kept getting used over and over again.
  As a practical matter, however, we are certainly going to be 
supportive of this proposal, and if the Senator doesn't need a vote on 
it, we will take a voice vote.
  Mr. CONRAD. Madam President, I would inquire of the Senator, would he 
be willing to take a voice vote?
  Mr. BAYH. I would.
  Mr. CONRAD. Madam President, I ask unanimous consent that we go to a 
voice vote on the Bayh amendment.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  If not, the question is on agreeing to amendment No. 526.
  The amendment (No. 526) was agreed to.
  Mr. CONRAD. Madam President, I move to reconsider the vote.
  Mr. GREGG. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. CONRAD. Madam President, I thank the Senator from Indiana. I 
thank him for working with us to get this amendment worked out, and I 
want to also thank my colleague, the ranking member of the committee, 
for his cooperation once again.
  We now are prepared to start voting, are we not?
  Mr. GREGG. I was going to suggest, Madam President, that if the 
chairman was ready, we should start voting now. Why wait?
  Mr. CONRAD. Madam President, let me note that we might need to get an 
agreement on how we proceed. However, I think we should put colleagues 
on notice that very shortly we are going to start voting.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CONRAD. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Amendment No. 545, as Modified

  Mr. CONRAD. Madam President, I ask unanimous consent that the Sanders 
amendment, No. 545, be modified with the changes at the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as modified, is as follows:

       On page 3, line 11, increase the amount by $10,300,000,000.
       On page 3, line 12, increase the amount by $14,600,000,000.
       On page 3, line 13, increase the amount by $14,800,000,000.
       On page 3, line 14, increase the amount by $4,500,000,000.
       On page 3, line 20, increase the amouunt by 
     $10,300,000,000.
       On page 3, line 21, increase the amount by $14,600,000,000.
       On page 3, line 22, increase the amount by $14,800,000,000.
       On page 3, line 23, increase the amount by $4,500,000,000.
       On page 4, line 6, increase the amount by $10,300,000,000.
       On page 4, line 7, increase the amount by $14,600,000,000.
       On page 4, line 8, increase the amount by $14,800,000,000.
       On page 4, line 9, increase the amount by $4,500,000,000.
       On page 4, line 15, increase the amount by $10,300,000,000.
       On page 4, line 16, increase the amount by $14,600,000,000.
       On page 4, line 17, increase the amount by $14,800,000,000.
       On page 4, line 18 increase the amount by $4,500,000,000.
       On page 4, line 8, increase the amount by $14,800,000,000.
       On page 4, line 9, increase the amount by $4,500,000,000.
       On page 4, line 15, increase the amount by $10,300,000,000.
       On page 4, line 16, increase the amount by $14,600,000,000.
       On page 4, line 17, increase the amount by $14,800,000,000.
       On page 4, line 18, increase the amount by $4,500,000,000.
       On page 17, line 12, increase the amount by 
     $10,300,000,000.
       On page 17, line 13, increase the amount by 
     $10,300,000,000.
       On page 17, line 16, increase the amount by 
     $14,600,000,000.
       On page 17, line 17, increase the amount by 
     $14,600,000,000.
       On page 17, line 20, increase the amount by 
     $14,800,000,000.
       On page 17, line 21, increase the amount by 
     $14,800,000,000.
       On page 17, line 24, increase the amount by $4,500,000,000.
       On page 17, line 25, increase the amount by $4,500,000,000.

  Mr. CONRAD. Madam President, I ask unanimous consent that we proceed 
to vote in relation to the following amendments in the order listed; 
that there be 2 minutes equally divided prior to each vote; and that 
after the first vote, time be limited to 10 minutes on each succeeding 
vote, with no second-degree amendments in order to any of the 
amendments covered under this agreement, except where we might have a 
side-by-side, as indicated.
  The first amendment would be the Hutchison amendment No. 517, as 
modified; the second amendment would be the Ensign amendment No. 472; 
the third amendment would be the Sanders amendment No. 545, as 
modified; and the fourth amendment would be the Enzi amendment No. 497.
  Mr. GREGG. Reserving the right to object, and I don't expect to 
object, but I want to be sure Senator Hutchison has signed off on the 
modification.
  Mrs. HUTCHISON. I have.
  The PRESIDING OFFICER. Is there objection?
  The Chair hears none, and, it is so ordered.
  Mr. CONRAD. Madam President, let's do this. The Hutchison amendment 
we don't have at the desk as modified, so we need to revise the 
unanimous consent to make the Ensign amendment No. 472 the first 
amendment in the tranche to be voted on, then going to the Sanders 
amendment, and then the Enzi amendment. Hopefully, momentarily, we will 
have worked out getting the Hutchison amendment, as modified, to the 
desk.
  So that would mean we would first proceed to the Ensign amendment, 
and I notice that Senator Ensign is here.
  The PRESIDING OFFICER. Is there objection to the plan, as modified?
  The Chair hears none, and it is so ordered.
  The Senator from Texas is recognized.


                     Amendment No. 517, as Modified

  Mrs. HUTCHISON. Madam President, I have the modification to my 
amendment, and I would send it to the desk and ask that it be the 
replacement for my amendment.
  Madam President, we can have a vote on my amendment or we can have a 
voice vote, at the pleasure of the chairman.

[[Page S3584]]

  The PRESIDING OFFICER. The amendment is so modified.
  The amendment, as modified, is as follows:

       At the appropriate place insert the following:

     SEC. __. DEFICIT-NEUTRAL RESERVE FUND FOR EXTENSION OF THE 
                   DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       The Chairman of the Senate Budget Committee may revise the 
     aggregates, allocations, and other levels in this resolution 
     for a bill, joint resolution, motion, amendment, or 
     conference report that would provide for extension of the 
     deduction for State and local sales taxes, provided that such 
     legislation would not increase the deficit over the total of 
     fiscal years 2007 through 2012.

  Mr. CONRAD. Madam President, I will modify the unanimous consent 
request so that we go immediately to the Hutchison amendment on a voice 
vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Is there further debate on the amendment?
  If not, the question is on agreeing to amendment No. 517.
  The amendment (No. 517), as modified, was agreed to.
  Mr. CONRAD. Madam President, I would like to at this moment thank the 
gentlewoman from Texas for working with us to get this amendment 
modified. It was very helpful to the work of the committee. We 
appreciate very much her cooperation.
  Mrs. HUTCHISON. Madam President, I would say to the distinguished 
chairman that I appreciate his willingness to work with us. It is a 
very important amendment to eight States in this country. Senator 
Cantwell was very much a part of the whole negotiation, and I commend 
her and her staff for helping us to do this, and I appreciate the fact 
that it has passed and is now a part of the budget. I would also like 
to thank the other cosponsors of this amendment, Senator Cornyn, 
Senator Enzi, Senator Murkowski, Senator Corker, Senator Alexander, and 
Senator Ensign.
  Mr. CONRAD. Madam President, I, too, thank Senator Cantwell. She was 
very helpful to us in getting this so that we didn't have to have a 
vote and so the amendment could be adopted. I thank the two Senators.


                           Amendment No. 472

  We now proceed to the Ensign amendment.
  Mr. GREGG. Madam President, I ask for the yeas and nays.
  The PRESIDING OFFICER. The yeas and nays have been ordered. Is there 
a sufficient second?
  There appears to be a sufficient second.
  Who yields time?
  Mr. ENSIGN. Madam President, am I correct, there is 1 minute on each 
side?
  The PRESIDING OFFICER. The Senator is correct. There is 1 minute on 
each side.
  Mr. ENSIGN. Madam President, very simply, this amendment is the same 
as the means testing on Part B. Part D of Medicare seniors never paid 
for during their lifetime. This is a brand new entitlement, something 
they never paid for. We are asking the younger workers to pay basically 
for millionaires to be able to get prescription drugs. What my 
amendment says is we should means test those so wealthier seniors will 
have to pay more of their fair share for prescription drugs. That is 
very simply what this amendment does.
  I think 59 Senators voted before to make sure Part B was means 
tested--once again, a benefit they never paid for. This amendment does 
the same thing for Medicare Part D. Let's not ask a schoolteacher or a 
firefighter to pay for millionaires to have prescription drugs. Let's 
do something fiscally responsible and call on the Finance Committee to 
enact this very important amendment to the prescription drug program.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, this amendment fails to distinguish 
between Part B premium and Part D. This amendment calls for means 
testing Part D. What does that honestly mean? It will create massive 
confusion among seniors. Why? The Government sets the Part B premium. 
The private sector sets the Part D drug premium. There are 1,500 plans 
and each of them is different. Some premiums are a few dollars, some 
are $100.
  You think seniors were confused with Part D when it first came out? 
That is a picnic compared to the confusion this amendment is going to 
create. Think of all the confusion the seniors are going to have to 
face, trying to figure out is their premium means tested compared to 
their friends' premium next door? This is massively complex for 
seniors. There is so much confusion for seniors that the amendment 
should not be agreed to.
  I urge Senators to vote against this confusion.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
472. The yeas and nays have been ordered and the clerk will call the 
roll.
  The assistant journal clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``yea.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 44, nays 52, as follows:

                      [Rollcall Vote No. 93 Leg.]

                                YEAS--44

     Alexander
     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McConnell
     Murkowski
     Roberts
     Sessions
     Shelby
     Stevens
     Sununu
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--52

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Biden
     Inhofe
     Johnson
     McCain
  The amendment (No. 472) was rejected.


                     Amendment No. 545, as Modified

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on amendment No. 545, as modified.
  The Senator from Vermont.
  Mr. SANDERS. Madam President, in 1975, Congress made a promise to 
provide 40 percent of the funding for special education. Congress has 
not kept that promise on that unfunded mandate. Today, we are providing 
a little over 17 percent of the costs of special education, and that 
percentage has gone down over the last 3 years. The result is higher 
and higher property taxes for the middle-class and working families of 
our country.
  This amendment is very simple. It rescinds the 2001 personal income 
tax reduction that was given to people with at least $1 million in 
income--the wealthiest three-tenths of 1 percent of the population--and 
puts the $44 billion raised over 5 years into special education.
  Madam President, 99.7 percent of Americans would see no increase in 
their Federal taxes from this amendment. But it would lower property 
taxes for millions of middle-class and working families, improve the 
quality of education and, most importantly, keep the promise made to 
school districts all over this country.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Madam President, in a bill which is already a big-
spending, big-tax bill, this would supersize the tax element of the 
bill. This is sort of like when you go into McDonald's, you

[[Page S3585]]

can order a regular, a large, or a super size. This is a supersized tax 
increase, $44 billion of new taxes, and 83 percent of the people who 
are going to pay it are small businesspeople, small businesspeople 
across this country.
  We have done a great--not a great job; we have done a strong job in 
the area of IDEA. This administration has had larger increases in IDEA 
spending than any administration in history, dramatic increases. We 
still need to go further, but you do not go further by increasing taxes 
by $44 billion on America's workers.
  I hope we will vote down this amendment.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to amendment No. 545, as modified.
  The yeas and nays have been ordered, and the clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``nay.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 38, nays 58, as follows:

                      [Rollcall Vote No. 94 Leg.]

                                YEAS--38

     Akaka
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cardin
     Casey
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     McCaskill
     Menendez
     Mikulski
     Murray
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Stabenow
     Whitehouse

                                NAYS--58

     Alexander
     Allard
     Baucus
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Cantwell
     Carper
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Isakson
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     Martinez
     McConnell
     Murkowski
     Nelson (FL)
     Nelson (NE)
     Roberts
     Salazar
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Wyden

                             NOT VOTING--4

     Biden
     Inhofe
     Johnson
     McCain
  The amendment (No. 545), as modified, was rejected.
  Mr. GREGG. I move to reconsider the vote.
  Mr. ENZI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 497

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on amendment No. 497.
  The Senator from Wyoming.
  Mr. ENZI. Madam President, my amendment is very simple. It 
establishes a 60-vote threshold for legislation that imposes an 
unfunded mandate on small businesses which exceeds $131 million, as 
determined by the Small Business Administration.
  We do it for municipalities. We do it for States. We do it for 
tribes. We do not do it for small businesses. Small businesses make up 
99.7 percent of all U.S. employers and employ 50 percent of the 
Nation's nonfarm private sector workers. We have an obligation to make 
sure laws written in Washington do not unfairly burden Main Street.
  Now, checking back, I found that bills that adversely affect small 
business usually get hung up on cloture, which is a form of point of 
order but a very lengthy one. The ones that take care of small business 
frequently get a huge vote.
  Now, it is possible to mention there will be things coming up, such 
as mental health parity--I am a cosponsor on that one; I can assure you 
that is one where small business will not be given a bad deal--the 
Department of Defense. We can override any waiver. In this body, it 
takes 60 votes to do cloture. This will speed up the process.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, this amendment is absolutely well 
intended, but it will create unintended consequences. This will give 
the Budget Committee authority over nonbudgetary matters. This 
amendment, if it were adopted, would create a supermajority point of 
order against Senator Domenici's mental health parity bill. It would 
give a supermajority point of order against the Defense authorization 
bill. It would give a supermajority point of order against the minimum 
wage bill, against bankruptcy reform, against pension reform.
  This amendment should not be adopted. I urge my colleagues to vote 
no.
  Mr. ENZI. Madam President, do I have time remaining?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CONRAD. Madam President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to amendment No. 497.
  The clerk will call the roll.
  The assistant journal clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``yea.''
  The PRESIDING OFFICER (Mr. Whitehouse). Are there any other Senators 
in the Chamber desiring to vote?
  The result was announced--yeas 47, nays 49, as follows:

                      [Rollcall Vote No. 95 Leg.]

                                YEAS--47

     Alexander
     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Thomas
     Thune
     Vitter
     Warner

                                NAYS--49

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Biden
     Inhofe
     Johnson
     McCain
  The amendment (No. 497) was rejected.
  Mr. CONRAD. Mr. President, I move to reconsider the vote, and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 498

  Mr. CONRAD. Mr. President, I ask unanimous consent that the Senate 
proceed to consider the Thomas amendment No. 498 and that there be 2 
minutes of debate equally divided and the vote time be limited to 10 
minutes, with no second-degree amendment in order.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Under the previous order, there will now be 2 minutes of debate 
equally divided on amendment No. 498.
  The Senator from Wyoming is recognized.
  Mr. THOMAS. Mr. President, the amendment I am offering will bring 
some transparency--
  Mr. GREGG. Could we get order, Mr. President?

[[Page S3586]]

  The PRESIDING OFFICER. May we have order in the Senate, please.
  The Senator from Wyoming.
  Mr. THOMAS. The amendment will bring transparency and discipline, but 
not order, to this budget process. The budget resolution is supposed to 
provide a blueprint for Government spending and allocate dollars for 
appropriators to spend in particular areas. However, this budget goes 
away from that responsibility in a number of areas and fails to even 
set up a cap for overall spending. It does so by including a number of 
unlimited reserve funds that amount to no more than a blank check 
signed by the American taxpayer. There is no end to what can be spent.
  My amendment would strike these reserve funds from the budget. We owe 
it to the American people to give them a budget that means something, 
that let's them know up front how much we are spending and how we are 
going to pay for it. I urge my colleagues to support this amendment.
  Mr. President, I yield back the remainder of my time.
  Mr. CONRAD. Mr. President, there are no blank checks here. Reserve 
funds simply say that the committee of jurisdiction has to report a 
bill, and they have to pay for it. Nothing happens unless the committee 
reports and unless they pay for it.
  Now, this amendment would knock out every reserve fund--every one 
that has been put in by Republican Senators, every one that has been 
put in on this side. It would knock out the reserve fund for SCHIP, 
children's health care. It would strike the reserve fund for veterans. 
It would strike the reserve funds for tax relief, for education, for 
energy, for the farm bill, for Medicare, for housing, for childcare, 
for mental health parity. It would knock out Senator Cornyn's reserve 
fund for immigration, and on and on.
  I urge a ``no'' vote on this amendment.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The question is on agreeing to amendment No. 498.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``yea.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 29, nays 67, as follows:

                      [Rollcall Vote No. 96 Leg.]

                                YEAS--29

     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Coburn
     Cochran
     Corker
     Craig
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Kyl
     Lott
     Martinez
     McConnell
     Murkowski
     Sessions
     Shelby
     Thomas
     Vitter
     Voinovich

                                NAYS--67

     Akaka
     Alexander
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Coleman
     Collins
     Conrad
     Cornyn
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Hutchison
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thune
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Biden
     Inhofe
     Johnson
     McCain
  The amendment (No. 498) was rejected.
  Mr. CONRAD. Mr. President, I would have preferred not to have to 
offer this amendment, but Senator Coleman has an amendment that would 
extend several energy tax incentives, including the clean, renewable 
energy bond program, and tax incentives for energy-efficient buildings 
and powerplants.
  I am in entire agreement with the Senator on that matter. The problem 
is, he has paid for it out of section 920, and the 920 pool of money is 
about evaporated. So the effect of his amendment would be to cut 
veterans, homeland security, and law enforcement; and I can assure 
colleagues that will be dropped in conference if it is adopted here.
  Instead, to try to accomplish the goal, I have offered those same 
provisions, paid for by a deficit-neutral reserve fund. That gives the 
committees of jurisdiction the widest latitude to pay for the 
initiatives that are deserving and important.


                           Amendment No. 598

  Mr. CONRAD. I send the amendment to the desk.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
set aside.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from North Dakota (Mr. Conrad) proposes an 
     amendment numbered 598.

  Mr. CONRAD. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To create a deficit-neutral reserve fund for extending 
                     certain energy tax incentives)

       At the end of title III, insert the following:

     SEC. __. DEFICIT-NEUTRAL RESERVE FUND FOR EXTENSION OF 
                   CERTAIN ENERGY TAX INCENTIVES.

       The Chairman of the Senate Committee on the Budget may 
     revise the aggregates, allocations, and other levels in this 
     resolution for a bill, joint resolution, motion, amendment, 
     or conference report that would extend through 2015 energy 
     tax incentives, including the production tax credit for 
     electricity produced from renewable resources, the Clean 
     Renewable Energy Bond program, and the provisions to 
     encourage energy efficient buildings, products and power 
     plants, provided that such legislation would not increase the 
     deficit over the total of fiscal years 2007 through 2012.

  Mr. CONRAD. The Senator from Minnesota has a minute.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Mr. COLEMAN. Mr. President, we agree on the goals. We need clean 
energy. We need clean energy. We need renewable energy, wind energy, 
biomass, and geothermal. The problem is, with the reserve fund there is 
no certainty. You cannot take the reserve fund to the bank. That would 
only say if we find offsets in the future to make the extension, we can 
do that. It is as if I give you $15, and if you find $15 for me some 
day, you can pay me. If you want the projects to go forth and you 
believe in wind and biomass and other renewables and you want them to 
be financed, you need certainty. The 920 fund can provide you the 
certainty.
  This doesn't move the ball forward. We are still at ground zero. If 
you believe in renewables and clean energy, I urge you to vote against 
this and support my amendment.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I wish my colleague was right. The 920 
offset is a fantasy. This will never survive conference because the 920 
pool is gone.
  I urge colleagues to vote for the first amendment, the Conrad 
amendment, that provides a funding mechanism that will survive 
conference.
  I ask unanimous consent that we go to the vote.
  The PRESIDING OFFICER. Is there objection?
  The Senator from New Mexico.
  Mr. DOMENICI. What was the manager's request?
  Mr. CONRAD. I was asking that we pay for these very worthwhile 
initiatives with a deficit-neutral reserve fund instead of using 
section 920.
  Mr. DOMENICI. I heard all of that, and I know what the Senator from 
Minnesota is trying to do because I encouraged him to do it. Rather 
than let him lose by making a mistake, I wonder if we could look at the 
amendment of the Senator from North Dakota. I looked at it, and I 
didn't see a reserve fund. Can we take 1 minute and look at it? I would 
like to encourage Senator Coleman to accept the Senator's proposal.

[[Page S3587]]

  Can the Senator from North Dakota tell me again what he thinks he 
did?
  Mr. CONRAD. Yes. What I have done is I have tried to convince my 
colleague--we absolutely share the same goal.
  Mr. DOMENICI. Yes.
  Mr. CONRAD. What I have done is offered a deficit-neutral reserve 
fund that gives the committees the greatest latitude to actually fund 
it. Mr. President, 920, which is his offset, is oversubscribed, and if 
we go to conference with it, we will be dropped like a hot rock.
  Mr. COLEMAN. Mr. President, I note that there are 235 reserve funds 
in this budget with over $200 billion over 5 years. The problem is, 
again, if we believe in getting this done, and we adopt it with the 
reserve fund, there is no way we can go to the bank and say we are 
going to have this because it is simply a promise without anything.
  The reality of the 920 can give certainty if we can get it through 
conference. Let's fight for it in conference. Let's not do anything 
that has no effect.
  Mr. CONRAD. Mr. President, let's be clear. What 920 means is that we 
will cut veterans, we will cut homeland security, we will cut law 
enforcement. That is a losing proposition for us, I say to my 
colleague, especially given the fact that we are already at over $7.5 
billion a year in section 920. The President, when he identified the 
possibilities, only identified $7.5 billion available. That is the 
money that has already been used.
  I urge my colleagues to vote yes on the Conrad amendment so we can 
fund these important priorities.
  I urge we go to the vote. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to amendment No. 598. The clerk will call 
the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``nay.''
  The PRESIDING OFFICER (Mr. Nelson of Florida). Are there any other 
Senators in the Chamber desiring to vote?
  The result was announced--yeas 54, nays 42, as follows:

                      [Rollcall Vote No. 97 Leg.]

                                YEAS--54

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Collins
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Stabenow
     Tester
     Thune
     Webb
     Whitehouse
     Wyden

                                NAYS--42

     Alexander
     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Murkowski
     Roberts
     Sessions
     Shelby
     Snowe
     Specter
     Stevens
     Sununu
     Thomas
     Vitter
     Voinovich
     Warner

                             NOT VOTING--4

     Biden
     Inhofe
     Johnson
     McCain
  The amendment (No. 598) was agreed to.
  Mr. CONRAD. Mr. President, I move to reconsider the vote, and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. GREGG. Mr. President, I ask unanimous consent that there now be 2 
minutes equally divided, that we go to the vote, and that the yeas and 
nays be deemed ordered on the Coleman amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  There are 2 minutes of debate equally divided.
  The Senator from Minnesota.
  Mr. COLEMAN. Mr. President, if you voted for the Conrad amendment 
before, if you believe in wind energy and biomass and renewables, then 
you should vote for my amendment. The argument of the Senator from 
North Dakota is this will never make it out of conference committee, 
but that is not an argument against what we are trying to do. So let's 
put that to the test.
  If you believe this is the right policy and you want to tell those 
folks who want to do wind energy and who want to do biomass that you 
are going to support them, you should support my amendment.
  Ms. SNOWE. Mr. President, I thank Senator Coleman for offering this 
amendment because it is critical that the Federal budget prioritizes 
the energy policy initiatives that are working for our Nation.
  This amendment would include budget authority for the extension of 
the tax incentives for energy efficient commercial buildings, which has 
been estimated that by 2010 will save 7 trillion cubic feet, Tcf, of 
natural gas. To put this figure in context, the United States imported 
4.3 Tcf of natural gas in 2005.
  Furthermore, we must recognize that investments into commercial and 
residential buildings provides cost savings for decades. The life of an 
average American vehicle is roughly 12 years, for commercial buildings 
the estimated lifetime is 75 years and for residential buildings the 
lifetime is 100 years. It is vital that we encourage the investment 
into energy efficiency for these buildings in order to receive the 
aggregate energy savings.
  Recently, Senator Kerry and I, as chair and ranking member of the 
Senate Committee on Small Business and Entrepreneurship, heard small 
business representatives articulate the success of these incentives. 
However, it is clear that businesses need sufficient lead time to make 
these investments, reduce risk, and ensure that businesses adopt the 
most energy efficient infrastructure. This budget must affirm and 
reflect upon the fact that energy efficiency is the most cost-effective 
solution to our energy crisis. As the former Assistant Secretary for 
Energy and Energy Efficiency and Renewable Energy and current director 
of Google's Climate Change and Energy Initiatives, Dan Reicher, stated 
to the Finance Committee last month, ``Energy Efficiency is the real 
low-hanging fruit in the U.S. and global economy.
  Furthermore, I am encouraged that this amendment would include a 5-
year extension for the renewable production tax credit. On December 14, 
2006, I joined Senators Bingaman and Domenici and 39 other Senators, in 
writing the President to request that he include a 5-year extension of 
the renewable energy production tax credit, PTC, for 5 years. The 
current PTC is due to expire on December 31, 2008, and this does not 
allow renewable energy businesses to adequately prepare for the long-
term. This problem was analyzed in a special report in the Economist, 
which stated that ``America's incentives for clean energy'' are 
``relatively modest compared to Europe's.'' Furthermore, the article 
illustrates that ``what one politician can mandate, another can 
terminate--and therein lies one of the biggest risks for clean energy. 
American politicians have periodically allowed a tax break for wind 
generation to expire, for example. This caused the industry to falter 
several times, before the credit was renewed again.''
  This country must make a long-term commitment to energy policies that 
are effective. I am pleased to support this amendment.
  Mr. CONRAD. Mr. President, all those who voted ``yes'' on the Conrad 
amendment should now vote ``no'' on the Coleman amendment, since we 
have funded it and done it in the right way.
  The Coleman amendment would fund these priorities by cutting 
veterans, by cutting homeland security, by cutting law enforcement. You 
better vote ``no'' on the Coleman amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
577. The yeas and nays have been ordered.
  The clerk will call the roll.

[[Page S3588]]

  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Georgia (Mr. Chambliss), the Senator from Oklahoma (Mr. Inhofe), 
and the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Oklahoma (Mr. 
Inhofe) would have voted ``nay.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 42, nays 53, as follows:

                      [Rollcall Vote No. 98 Leg.]

                                YEAS--42

     Allard
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Isakson
     Lott
     Lugar
     Martinez
     McConnell
     Murkowski
     Roberts
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--53

     Akaka
     Alexander
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Stabenow
     Sununu
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--5

     Biden
     Chambliss
     Inhofe
     Johnson
     McCain
  The amendment (No. 577) was rejected.
  Mr. GREGG. Mr. President, I move to reconsider the vote and I move to 
lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. GREGG. Mr. President, we are now going to go to a period we have 
discussed before, where people will be speaking on various amendments 
but not offering them. The speaking order on our side, and we are 
presuming this is going to start about 6:30, will be a half hour on our 
side, then a half hour to the majority, then a half hour to our side, 
and then the majority, back and forth. The people we expect to speak 
are in this order: Senator Specter, as soon as we start, and Senator 
Domenici after Senator Specter. Then, after the majority response or 
period, it will be Senator Hatch, probably around 7:30, and then a 
combination of Senator Murkowski and Senator Allard around 7:45. Then 
the majority position. Then it will be Senator Chambliss and a group 
around 8:30; Senator Brownback around 9:30, and Senator Voinovich 
around 9:45. All those times may move up depending on what happens, 
with Members either coming or going or not showing up, but that is the 
present lineup.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, because we are now 20 minutes past the 
time we anticipated being able to start the discussions and the debate, 
obviously everything is moved back 20 minutes. Previously, the GOP time 
was to run from 6 to 6:30. That will need to now run from about 6:25 to 
6:55. That will be the time in which our side would start. First will 
be Senator Menendez, then Senator Salazar, and then Senator Durbin, 
each one of them for 10 minutes. Then we will go back to the Republican 
side. Then we will come back to our side at roughly 8 o'clock with 
Senator Lieberman and Senator Casey.
  I hope it is recognized that if Senators who have time are not here 
and there are other Senators who are here, that will be worked out and 
the Senators who are available will go ahead and use the time and be 
reasonable with others so we can accommodate as many Senators as 
possible this evening.
  The other important thing to say is, tomorrow morning we are going to 
start at 9 o'clock. We will have a half hour equally divided between 
Senator Gregg and myself. Then we will start voting at 9:30. That is 
going to be a series of 10-minute votes after the first one. In 
addition to that, we need to indicate to Members, there are 75 votes 
pending. We can do about 3 votes an hour. That means 25 hours of 
voting. If everyone insists on their amendment, we will be here until 9 
o'clock the next morning. That is the reality. Senators can decide 
their own fate. If every Senator insists on every amendment they have 
noticed, that is 75 amendments, we will be voting for 25 straight 
hours. I hope colleagues understand the consequences.
  I thank the Chair.
  Mr. GREGG. Mr. President, I wish to reinforce the point made by the 
chairman, which is there has to be reason in this process. We have been 
through these vote-athons before. We know they tend to be a little 
chaotic. Quite honestly, there are a lot of people who come in late 
with ideas that are good ideas, but let's be reasonable and make sure 
there is an orderly process, and let's cut this list down to something 
that is manageable so we can all get back to our districts or our homes 
and enjoy the weekend with our families.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.


                           Amendment No. 506

  Mr. SPECTER. Mr. President, I have sought recognition to discuss 
briefly two amendments to the budget resolution. The first amendment, 
which I offer on behalf of Senator Harkin and myself, relates to 
funding for the National Institutes of Health. The NIH has undertaken 
miraculous research which has led to breakthroughs on many maladies 
confronting this country and which benefit the world. Dr. Zerhouni 
testified on Monday of this week and brought forth statistics showing 
there has actually been a decrease in cancer in the last 2 years, a 
decrease in heart disease, and a decrease in strokes. We could go 
through the long list of ailments where the NIH research has been 
overwhelmingly successful.
  I ask unanimous consent at the conclusion of my comments that the 
list of the diseases be printed in the Congressional Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SPECTER. The budget constraints have led to a cut in NIH funding 
in recent years. The proposed budget by the administration would cut 
NIH funding by more than $500 million. In one of the recent budget 
cuts, the National Cancer Institute, illustratively, was cut by some 
$50 million.
  In 1970, President Nixon declared war on cancer and, had that war 
been prosecuted with the same intensity as our other wars, cancer would 
have been cured.
  My chief of staff, Carey Lackman, a beautiful young woman of 48, died 
of breast cancer. One of my best friends, a very distinguished Federal 
judge, Edward Becker, of Philadelphia, chief judge emeritus, died 
within the year of prostate cancer.
  As is fairly well known, I suffer from Hodgkin's. I made a good 
recovery. All the tests are said to be symptom free. But I was for 
increasing NIH funding long before I had a personal problem. I have 
been on the Appropriations Subcommittee of Labor, Health and Human 
Services, and Education since I was elected to the Senate in 1980 and 
have had the opportunity to chair the subcommittee. With the leadership 
of Senator Harkin and myself, NIH funding has been increased from some 
$12 billion to almost $30 billion.
  We are offering this amendment simply to restore NIH funding to where 
it would have been had there been an accommodation for biomedical 
inflation. The cuts have been tremendous, but we have restored the 4.5-
percent biomedical inflation rate for fiscal year 2006, which costs 
$1.3 billion; for fiscal year 2007, which costs $1.1 billion; for 
fiscal year 2008, which costs another $1.1 billion.
  We also provide increases for the Centers for Disease Control and 
Prevention and restored health professional training programs for 
nurses and doctors to the 2005 level.
  This, in the aggregate, when reduced by the assumption for health 
care programs in the budget resolution, comes to an increase in funding 
of $2.183 billion.

[[Page S3589]]

  I ask unanimous consent this schedule be printed at the conclusion of 
my remarks, along with the chronology of funding amendments offered on 
the increase of NIH funding.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. SPECTER. I would say that this is absolutely minimal to not fall 
backward. Earlier this week, in addition to Dr. Zerhouni's testimony, 
we heard testimony from research applicants, and they are falling off. 
We are losing the best and the brightest of the talent. So this is 
minimal, just to tread water.


                           Amendment No. 505

  I now turn to a second amendment which I propose to offer, and that 
is an amendment which deals with legislation to reform asbestos 
litigation. There have been efforts made to deal with the avalanche of 
asbestos injury cases, with the attendant bankruptcies and with tens of 
thousands of people left unable to collect for very serious, sometimes 
deadly, injuries because companies have gone into bankruptcy.
  On a number of occasions, the Supreme Court of the United States has 
urged Congress to deal with this problem. In the 109th Congress, the 
Judiciary Committee undertook an enormous job, reported out a 
comprehensive reform bill after many hearings and complicated markups--
all of that is part of the record, which I will not repeat now.
  In the intervening period of time, $140 billion that had been 
available for a trust fund has been reduced very substantially by the 
formation of bankruptcy trusts. So we are now compelled to recast the 
legislation. We are now looking at a reduced trust fund, and we are 
looking at dealing only with victims of mesothelioma, which is a deadly 
ailment.
  Last year, notwithstanding the humongous effort of the Committee, 
asbestos legislation was defeated on a technical point of order 
requiring 60 votes. We got 59. Senator Inouye had stated he was going 
to vote with us, but his wife was ill, and we did not survive the 
challenge on the budget point of order.
  The very heavy, crowded calendar precluded our being able to bring it 
up again. This year we have offered an amendment to the budget 
resolution which would establish a reserve fund for asbestos 
legislation, eliminating a point of order under section 302 of the 
Budget Act. And we have restructured the legislation to make it 
ironclad that the Federal Government will not have to pay anything 
because we are creating a fund, which we did not do last year, so that 
the only money contributed will be from the trust fund.
  That trust fund is established by the manufacturers who are 
interested in avoiding the crush of litigation and the attendant costs. 
We have found that the so-called transaction costs, attorneys' fees, 
amount to about 58 cents on the dollar, and only 42 cents are going to 
people who are injured.
  We have restructured the bill to defer cases where people do not have 
tangible damages, and we are looking at those with mesothelioma. We are 
dealing with an award--without a showing of liability, simply the 
damages of mesothelioma--of $1,100,000, an amount that was established 
last year after considerable negotiation, and I think it is fair to say 
it has been accepted as a reasonable figure.
  So that what will be presented to the body--I am hopeful we can yet 
work this out. We have gotten consent from staff on one side of the 
aisle, we are working with staff on the other side of the aisle, and we 
think we have answered conclusively the concerns that were raised.
  Senator Leahy was a cosponsor last year when I was chairman and he 
was ranking. He is the chairman of Judiciary now and has agreed to be a 
cosponsor as we move this bill forward. So I think we have the votes to 
get this resolved, but doubtless there will be a necessity for a 
cloture vote. We are going to have to get 60 votes to carry this bill 
forward.
  What I am looking for, what the sponsors are looking for, is not 
having so many hurdles that it becomes a practical impossibility to 
have the Senate consider this issue on the merits. But we are long past 
due, having been tangling with this issue for some 25 years. 
Legislation was defeated last year on a technicality. I hope we can 
eliminate the technicalities this year, and the amendment will address 
one. Then we will face the 60-vote threshold on cloture.
  We will seek to structure a bill that will meet with the approval of 
the Senate and the House of Representatives.

                               Exhibit 1


                                Diseases

     Aids
     Autism
     Stroke
     Obesity
     Alzheimer's
     Parkinson's
     Spinal Muscular Atrophy
     Scleroderma
     ALS
     Muscular Dystrophy
     Diabetes
     Osteoporosis
     Cancers:
       Breast, Cervical and Ovarian
       Lymphoma
       Multiple Myeloma
       Prostate
       Pancreatic
       Colon
       Head and Neck
       Brain
       Lung
       Mesothelioma
     Pediatric Renal Disorders
     Multiple Sclerosis
     Deafness and Other Communication Disorders
     Glaucoma
     Macular Degeneration
     Sickle Cell Anemia
     Heart Disease
     Spinal Cord Injury
     Sudden Infant Death Syndrome
     Arthritis
     Schizophrenia and Other Mental Disorders
     Polycystic Kidney Disease
     Hepatitis
     Cooley's Anemia
     Primary Immune Deficiency Disorders

                               Exhibit 2


                    Budget Amendment Talking Points

       Your amendment: Would add $2.2 billion to Function 550--
     Health--for increases in NIH, CDC and Health Professions 
     Training Programs. This increase would be offset by an 
     across-the-board cut of 0.23 percent.
       Budget Resolution: The budget resolution assumes the FY'07 
     funding level for NIH and provides an unspecified $1.637 
     billion increase for all health programs.
       Amendment assumptions:
       NIH increases required: to restore NIH plus FY'06 
     biomedical inflation--4.5%, $1.3 billion; to restore NIH plus 
     FY'07 biomedical inflation--3.7%, $1.1 billion; to restore 
     NIH plus FY'08 biomedical inflation--3.7%, $1.1 billion.
       NIH funding: $28,948,845,000--FY'07 comparable 
     appropriation; $28,948,845,000--Budget resolution assumption 
     for the NIH or the same as the FY'07 amount; 
     $32,448,845,000--FY'08 with your amendment, +$3.5 billion 
     over the FY'07 comparable appropriation.

----------------------------------------------------------------------------------------------------------------
                                                                                    Over previous
                             Year                                Appropriation       fiscal year      Percentage
----------------------------------------------------------------------------------------------------------------
1995.........................................................    $11,299,522,000       $362,000,000
1996.........................................................     11,927,562,000        628,040,000          5.6
1997.........................................................     12,740,843,000        813,281,000          6.8
1998.........................................................     13,674,843,000        934,000,000          7.3
1999.........................................................     15,629,156,000      1,954,313,000         14.3
2000.........................................................     17,820,587,000      2,191,431,000         14.0
2001.........................................................     20,458,130,000      2,637,543,000         14.8
2002.........................................................     23,296,382,000      2,838,252,000         13.9
2003.........................................................     27,066,782,000      3,770,400,000         16.2
2004.........................................................     27,887,512,000        820,730,000          3.0
2005.........................................................     28,495,157,000        607,645,000          2.2
2006.........................................................     28,311,848,000       -183,309,000         -0.6
2007.........................................................     28,948,845,000       -636,997,000          2.2
2008.........................................................
Request......................................................     28,621,241,000       -327,604,000         -1.1
Budget Res...................................................     28,948,845,000                  0            0
Amended......................................................     32,448,845,000     +3.500 billion           12
----------------------------------------------------------------------------------------------------------------

                        Sequence on NIH Funding

       In 1981, NIH funding was less than $3.6 billion. For FY04, 
     NIH funding totals $28 billion.
       A substantial investment in the NIH is crucial to continue 
     the progress we have made over the last several years to turn 
     our investment into cures for diseases over the next decade. 
     We have seen innumerable breakthroughs in the knowledge of 
     and treatment for diseases such as cancer, Alzheimer's 
     disease, Parkinson's disease, severe mental illnesses, 
     diabetes, osteoporosis, heart disease, and many others.
       In FY'98, you and Sen. Harkin sought to add $1.1 billion to 
     the health function during the Budget Resolution. The 
     amendment was defeated 63-37. Despite this, you were able to 
     provide a $1 billion increase for the NIH in FY98.
       In FY'99, you and Sen. Harkin again offered an amendment to 
     the Budget Resolution to add $2 billion to the health 
     function. The amendment was again defeated, this time by a 
     vote of 57-41. But, you still provided an additional $2 
     billion to the NIH for FY99, which at the time was the 
     largest increase in history.
       In FY'00, you and Sen. Harkin offered an amendment to the 
     Budget Resolution to add $1.4 billion to the health function, 
     over and above the $600 million increase which had already 
     been provided by the Budget Committee. The amendment was 
     defeated by a vote of 47-52.
       In FY'01, you and Senator Harkin offered an amendment to 
     the Budget Resolution to add $1.6 billion to the health 
     function. This amendment passed by a vote of 55-45. This 
     victory brought the NIH increase to $2.7 billion for FY'01. 
     However, after late night negotiations with the House, the 
     funding for

[[Page S3590]]

     NIH was cut by $200 million below that amount, bringing the 
     total increase to $2.5 billion.
       In FY'02, you and Senator Harkin, along with nine other 
     Senators offered an amendment to add an additional $700 
     million to the resolution to achieve your goal of doubling. 
     The vote was 96-4. The Senate Labor-HHS Subcommittee reported 
     a bill recommending $23.7 billion, an increase of $3.4 
     billion over the previous year's funding. But during 
     conference negotiations with the House, we fell short of that 
     amount by $410 million.
       The FY'03 omnibus appropriations bill contained an increase 
     of $3.7 billion, which achieved your doubling effort.
       In FY'04, you and Senator Harkin offered an amendment to 
     the budget resolution to add $2.8 billion in additional 
     funding for Public Health Service programs as follows: $1.8 
     billion for NIH, $600 million for CDC, and $400 million for 
     the Health Resources and Services Administration. The vote 
     was 97-1.
       On September 10, 2003, during floor debate on the Labor-HHS 
     bill, you and Senators Harkin and Feinstein offered an 
     amendment to the FY04 Labor-HHS bill to provide a $2.5 
     billion increase for the NIH. The amendment was defeated by a 
     vote of 52-43--the amendment required 60 votes because the 
     increase was designated as an emergency. The final conference 
     agreement contained $27.9 billion for NIH, an increase of $1 
     billion over the FY'03 appropriation.
       In FY'05, you, Senator Harkin, and Senator Collins offered 
     an amendment to the budget resolution to add $2,000,000,000 
     to discretionary health spending, including NIH--the 
     amendment passed 72-24. The final conference agreement for 
     NIH included $28.6 billion, an increase of $800 million.

  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I might say to the distinguished Senator 
from Pennsylvania, little did I know when I agreed tonight to switch 
places and follow him, instead of the reverse order, that I would hear 
about, once again, this never-ending litigation that is once again 
brought to the Senate floor by the distinguished Senator from 
Pennsylvania. What a distinguished stalwart you are, Senator.
  Never give up. Never say no. Never say die. Just keep on keeping on. 
Sure enough, even the big, giant elk fall. That is what they talk about 
in the forest, as they look out there among the great pines and the 
great big, giant elk, that sooner or later the tree will fall and the 
elk will fall.
  Frankly, I do not know of anybody better than you to say, if you are 
after them, you will get them, whatever it is. In this case, I listened 
to you, like I have listened and expressed willingness last time, with 
no interest, no big interest in my State to give you a Senator on your 
side, by saying I want to be part of trying to get this solved. I await 
your presentation to us, to have an opportunity to see if we can sign 
up now.
  Having said that, Senator Specter, I am going to speak for a very few 
minutes about this budget that is before us. I had kind of sworn I 
would not get involved very much in budget activities on the floor. I 
think you probably, as much as anyone, have noticed a real lack of--or 
an absence of--Domenici verbiage on budgets. Because I have done it for 
so many years, I decided others ought to take over and take charge, and 
they would have plenty without me having to stick myself in the middle 
of it.
  But I did think, if I were going to look at this year at what 
happened, what is the difference between the Democrats and Republicans 
being in control, which is essentially what everybody ought to know is 
the big difference. And then you ought to say: Well, what difference is 
there in the budget because the Democrats took over? And it is their 
budget, there is no doubt about it.
  They may claim they did not inherit what is in this budget, but the 
truth of the matter is, they are going to fix it, if it is going to be 
fixed. They are not going to do nothing, they are going to try to do 
something. You are going to look and see what it is they tried to do, 
and from that you are going to have to try to draw some conclusions.
  So it is a very difficult time to put a budget together. I do not 
stand here tonight as a superpolitical critiquer or criticizer of the 
Democrats who are trying to put this together. But I do think, from 
time to time, it is important that somebody like me who has been 
through this for about 25 years--I think that is about the minimal that 
I was involved in putting budgets together--and during much of that 
time I was either ranking or chairman having to put it together and 
learn about it.
  I believe we must continue to look at things and expose and express, 
which is what I am doing. I am not being critical, I am exposing and 
expressing what I see vis a vis what the leadership on the other side 
has claimed they have done.
  I believe we must continue to protect the middle class. The middle-
class working families must have our help and our protection. They are 
the backbone of our country. It is the middle class that distinguishes 
America from all other democracies, and that is why we are able to 
remain so strong as a living democracy, is because we have such a 
large, powerful majority of Americans who belong to the middle class, 
the middle-class working families.
  Unfortunately, the budget we are presented this year will do very 
little for the hard-working middle class. The budget we are presented 
does little for the hard-working middle class. If enacted, the budget 
would allow tax breaks that we gave to the middle class to expire, 
causing an enormous tax burden to be placed on these families.
  You do not have to do much, if you have tax cuts that are running 
along and the tax cuts are going to expire. Then all you have to do is 
not extend them and sometime later on the taxpayers are going to find 
out that their taxes are different because, in fact, what had happened 
to them under the tax structure before will not happen to them come the 
end of the tax year.
  If enacted, the budget would allow the tax breaks we gave to the 
middle class to expire, causing an enormous tax burden to be placed on 
these families. Simply put, the budget increases taxes on the middle 
class. I realize we made a step in the right direction by adopting the 
Baucus amendment yesterday. That was planned by the majority that it 
take place in that way.
  He offered a tax amendment, and I was happy to vote in favor of that, 
which permanently extended the tax relief for the 10-percent tax 
brackets and extended the child tax credit, the adoption credit and 
dependent care credit and the marriage penalty relief.
  However, there is still a great deal of work left to be accomplished. 
While we have provided tax relief for the lowest brackets, we have not 
addressed the middle class, which faces a tax increase and a loss of 
some substantial deductions such as the education tuition deduction.
  The budget does not extend the capital gains tax and the dividend tax 
relief. If we do not extend the capital gains deduction, we will be 
creating a dangerous situation that may prevent the economy from 
progressing. This might be a very good test of whether those kinds of 
taxes, capital gains and dividends tax relief, have anything positive 
to do with the economy.
  Obviously, so far in this process it is obvious that the other side 
is not going to do anything to extend those taxes, which many think 
were very important to the continuation of the growth at a steady pace 
for part of the last 5 years. If we do not extend the capital gains 
reduction, we will be creating a dangerous situation that may prevent 
the economy from progressing in a normal manner.
  I am not predicting that. I learned a long time ago not to predict 
too much because I predicted how bad things would turn out when certain 
taxes were changed, and it didn't happen at all.
  But I do believe there is too big a change in this budget resolution 
that it will not have any effect upon the taxpayers of the United 
States and ultimately on the economy and on the growth of the economy.
  Business owners need certainty so they can focus on long-term 
planning instead of shooting from the hip on a yearly basis. If we do 
not extend the capital gains relief, we are putting America's business 
in the position I have described. One can clearly see that on a 
national level, the middle class stands to lose the most under this 
proposal. In New Mexico, the impact of repealing the current tax relief 
would be felt widely by the middle class. More than 93,000 New Mexico 
investors, including senior citizens, would pay more because of an 
increase in the tax rates on capital gains and dividends.
  I am also sorry to say that this budget resolution does not 
thoroughly address the alternative minimum tax. I am sure the proponent 
of the budget knows that. The alternative minimum

[[Page S3591]]

is a devil of a tax. It grew from a little tiny thing with a few people 
affected to a monster that affects millions of people. With each year, 
it gets bigger in number. Instead, this budget provides a 2-year 
alternative minimum patch, not a cure. The 2006 alternative minimum tax 
applied to 3.5 million taxpayers. Absent legislative action, the AMT 
will affect significantly more middle-income taxpayers. By 2007, up to 
23 million taxpayers could be subject to the AMT.
  Maybe I am just telling them what they already know and they plan to 
fix it. They better think about it. It is an awful big number, and it 
is rather ominous. There will be plenty of Americans who will note it 
come tax-paying time, there is no question. Today, they don't know, but 
in about 6 months, they will know. About a year after that, they will 
know again. Absent legislative action, the AMT will affect 
significantly more middle-income taxpayers. By 2007, up to 23 million 
taxpayers could be subject to the alternative minimum tax.
  This is another tax which the middle class will bear the brunt of. 
The reverberations of this inaction will be seen all over the country 
and will especially be evident in a State such as New Mexico. This 
budget does not provide any permanent type of tax relief for America's 
middle-class people. I believe we still have time and a great 
opportunity to address this issue right now in a bipartisan manner. I 
am willing to continue to work to see what we can do to help the middle 
class in this budget.
  Added to the nonexistent middle-class tax relief, this budget fails 
to address the 800-pound gorilla in the room--otherwise known as 
entitlement spending. After 2010, spending related to the aging and the 
baby boom generation will begin to raise the growth rate of total 
outlays. The annual growth rate of Social Security spending is expected 
to increase from about 4.5 percent in 2008 to 6.5 percent by 2017. In 
addition, because the cost of health care is likely to continue rising 
rapidly, spending on Medicare and Medicaid is projected to grow even 
faster, in the range of 7 or 8 percent annually. Total outlays for 
Medicare and Medicaid are projected to more than double by 2017, 
increasing by 124 percent, while nominal GDP is expected to grow by 
only 63 percent. The budget currently under consideration does not 
offer solutions, much less address entitlement spending or reform.
  In the area of energy policy, this budget is a mixed bag. On the 
positive side, I am pleased that it assumes $1.6 billion for the 
Department of Energy's Energy Efficiency and Renewable Energy Program--
a $440 million increase above the fiscal year 2006 enacted level.
  This is a critical program within DOE where our Nation's work on 
next-generation fuels is put to the test. Increasing our fuel diversity 
and fuel efficiency is a top priority for me this year, as it was in 
the Energy bill of 2005. In that bipartisan bill, we passed the first-
ever renewable fuel standard. This has literally brought thousands of 
jobs to the American people and billions of gallons of homegrown 
renewable fuel to the American fuel tank. I will be seeking to further 
these advancements through legislation with Senator Bingaman and the 
Energy Committee.
  I am also relieved and pleased that the budget includes an increase 
for fossil energy research and development. This is key to many small 
producers, geologists, and to the overall fiscal strength of my home 
State. It is a mistake to misinterpret this funding as an unnecessary 
incentive for the oil and gas industry. This research and development 
helps advance technologies to recover more domestic oil and gas, and 
that is a good thing.
  I am disappointed, however, that this budget rejects the President's 
proposal to permit oil and gas leasing in the Arctic National Wildlife 
Refuge and does not assume savings from the proposal. We all agree that 
we should reduce our dependence on foreign oil. Many of us agree that 
we should do that by conserving energy, increasing fuel efficiency, and 
using homegrown biofuels. Where we often disagree is that I believe, in 
the near term, we should also be producing more domestic oil and gas.
  I have proposed and passed the idea of domestic energy in the form of 
an offshore bill dealing with the Gulf of Mexico. I believe we should 
be doing more offshore. I believe this budget should include ANWR. The 
chairman of the Budget Committee has indicated he is concerned that our 
Nation depends on imports for 60 percent of our oil. It concerns me, 
too. But it equally concerns me that we are locking up billions of 
barrels of American resources while relying on foreign, volatile 
regions for our oil.
  I cannot support this budget in its current form because it will 
increase taxes on the middle class and does not offer any meaningful 
solution for entitlement spending and it offers an incomplete energy 
policy. I remain willing to work hard to address areas of concern and 
am confident that if others will come to the table and talk and 
negotiate, we could strengthen this budget.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, I have a different view than my 
distinguished colleague from New Mexico. This week, what we are seeing 
is the proof of new leadership in this Congress. I am proud, as a 
member of the Budget Committee, that we have a budget resolution before 
us that provides a blueprint for how we can build a stronger nation--a 
nation that will not be drowning in debt but can save for its 
children's future, a nation that will not undermine the education of 
its young people but that invests in building global competitiveness 
from start to finish, a nation that will not abdicate its 
responsibility to provide health insurance to those most in need but 
that is committed to covering every child, and a nation that will not 
neglect the needs of its soldiers and veterans but that will provide 
the level of care their sacrifices deserve.
  Our budgets are indicative of the values we hold, individually and 
collectively. In this budget, one thing is very clear: We see a 
different set of priorities and values for our Nation. From health care 
to education to our veterans to the safety of our communities, 
Americans will see that this budget charts a new course. Perhaps most 
importantly, however, this budget reaches all of these priorities in a 
framework that is fiscally responsible. With this budget, we will end 
the days of spending now and figuring how to pay for it later. Instead 
of making lofty promises we cannot afford, instead of pretending we can 
have it all while we are sinking deeper and deeper into debt, instead 
of leaving a multibillion-dollar mess for our grandchildren to clean up 
years from now, with this budget we make a clear declaration: We must 
pay for what we spend as we go along, not push it off for another day. 
This is something Americans do every day. It is how all of us conduct 
our personal daily lives. Yet, until recently, it is something which 
Congress has been incapable of. With this budget, we have a chance to 
change that.
  Without question, one of our highest priorities is the health care of 
our Nation's most vulnerable children. I find it embarrassing that some 
in Washington, those who have some of the best health care coverage in 
the world, have proposed to cut coverage to America's neediest 
children. Yesterday, we defeated an amendment that would have 
jeopardized the health care of children and parents all over America. I 
know the battle is not over, but let me assure my colleagues, we will 
win the fight so children across this country will have the health 
insurance they deserve. I applaud the Budget Committee chairman for 
working to make this funding a priority in the resolution.
  I am proud of the Senate's support for the Baucus amendment to 
increase funding for SCHIP. I am proud that a majority of this Chamber 
realized we had a responsibility to fix the shortcomings of the 
President's budget that would have had millions of children across the 
Nation not insured and that we ensured America's neediest children have 
the care and health coverage they need.
  In this budget, we make it clear who our focus is. We will no longer 
follow blindly down the President's path to provide costly tax breaks 
for the wealthiest Americans while we rack up trillions in debt for 
future generations to pay off. That is why I am proud this

[[Page S3592]]

budget includes an amendment by Senator Baucus to extend key tax 
provisions which will benefit millions of students and hard-working 
families but which do not drown us in debt. The message is clear: We 
Democrats believe we can extend tax credits that help students afford 
college. We can ensure families continue to claim the child tax credit. 
We can provide income tax relief, and we don't have to do it while 
sweeping the cost under the rug for another day.
  In this budget, we provide a light at the end of the tunnel for so 
many children, teachers, and administrators who have been strained to 
meet requirements without resources, who have seen promises broken year 
after year. With this budget, we start to fix the many holes in our 
education funding. This budget funds education $9.2 billion above the 
President's request. We increase grant aid so that students who rely on 
Perkins loans, work study, and other grants will continue to have the 
extra assistance that will help them earn their degree.
  For me, this is not a policy debate; it is real life. I would not be 
here in the Senate today without the help of Pell and Perkins when I 
was trying to go to college. Having grown up poor, in a tenement, and 
being the first of my family to do so, that educational opportunity 
created a foundation that helped me achieve what I have today. I want 
to make that a birthright for each and every one of our children who 
has the ability and is willing to work hard and give something back to 
their country.
  We provide the largest increase in elementary and secondary education 
since 2002. We will have done more in this budget resolution in 3 
months than has been done by the administration in the past 4 years so 
that we can start to fill the massive shortfalls that have plagued our 
schools and denied opportunities to students. We restore programs such 
as Safe and Drug-Free Schools, education technology, and other critical 
investments that have been on the chopping block year after year.
  Our budget also marks a turning point for an area which has been 
shamefully neglected--the care of our Nation's veterans. I recently 
visited veterans at the VA hospital in East Orange, NJ, and soldiers 
who have returned from Iraq and Afghanistan currently at Fort Dix and 
service men and women from across the country, not just New Jersey. I 
have seen how without adequate funding our VA system has become 
overloaded, new veterans hang in limbo, and soldiers who have made 
unimaginable sacrifices are left wondering just how much the Nation 
values their services.
  Too many of our soldiers are trapped in a system that keeps them in 
limbo. They are too injured to serve, yet they cannot be fully 
discharged until their paperwork has been processed and their health 
determinations have been decided. The time they spend waiting can grow 
from weeks to months and, yes, even years. It is appalling. It is 
unacceptable. We have to work to improve this process.
  This budget allows for that. It would increase veterans funding $3.5 
billion above and beyond the President's request. It will ensure 
funding is dedicated to improving the claims backlog that is plaguing 
our discharge process.
  Mr. President, I ask unanimous consent for an additional 2 minutes.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. MENENDEZ. I worked to include language in the markup that ensures 
improving this backlog is a top priority, and I commend the effort by 
Senator Lincoln to dedicate funding to fixing the flawed claims 
process. This budget will do what should have been done long before our 
troops began coming home from Iraq and Afghanistan--begin to repair a 
broken system that has failed our veterans.
  Our budget will also ensure that as we wage a war abroad, we do not 
forget our fight here at home to protect our Nation. This budget not 
only rejects the President's shortsighted proposal to slash more than 
$1 billion from first responder programs, but it provides much needed 
increases for homeland security grants, including enough to fund port 
security grants at their authorized level of $400 million, doubling 
rail and transit security, and doubling chemical security funds.
  We also restore the President's cuts to the COPS Program, which would 
have left almost no funds to help law enforcement hire additional 
officers and improve technology. We reject the President's proposal to 
slash firefighter grants in half and eliminate SAFER grants. This 
budget means the difference between shortchanging our police and fire 
departments and providing them the resources to meet the challenges in 
our communities.
  Finally, the bottom line is our Nation will see a difference when we 
pass this budget. They will see a brighter outlook down the road. The 
Nation is watching. They have called on us to focus and change the 
priorities and values we have seen in previous resolutions by the 
previous majority. This budget ultimately encompasses the values of 
Americans across this country.
  I commend Chairman Conrad for his work on crafting this budget. It 
was difficult. It is a careful balance. But at the end of the day, it 
accomplishes the key investments that are most important to the 
Nation's future, to its vitality, to the human capital, to our 
children--our greatest asset and also our most fragile asset.
  I urge my colleagues to continue to reject the amendments that 
undermine the ability for this new blueprint and to adopt the 
resolution tomorrow so we can build a stronger Nation.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Sanders). The Senator from Colorado.
  Mr. SALAZAR. Mr. President, I rise to discuss the budget resolution 
that is currently before the Senate today. This is my third year in the 
Senate, and this is the third budget resolution I have had the 
opportunity to consider. But this is the first time I can say I am 
proud of the resolution before us. It is long overdue. We have not had 
a budget for 2 years, and we are still operating under the budget 
resolution passed in 2005.
  The circumstances surrounding the budget are not ideal. Our fiscal 
situation in this country has deteriorated significantly year after 
year over the past 6 years. We know we cannot fully fund every good 
program, and we are still facing deficits even as we move closer and 
closer to the demographic tidal wave that will soon overtake the Social 
Security and Medicare Programs. But, to their immense credit--to the 
immense credit of the chairman of the Budget Committee, Senator 
Conrad--they have crafted a very good, strong budget resolution. The 
budget resolution before us provides a blueprint that will enable us to 
fund our most important Federal programs, provide new tax relief and 
extend expiring tax provisions, and bring the budget into balance 
within 5 years. It will do all that without raising taxes.
  Still, one of the most important parts of this budget is not a 
program or a tax cut; it is a simple principle: If you want to take 
money out of the budget, either by increasing funding for Federal 
programs or by cutting taxes, you have to pay for it. You have to pay 
for it--it is a simple principle but a very important principle that 
will assure we restore fiscal discipline to the Congress. This pay-go 
provision is one I have long supported and one I am very proud to 
support with Senator Conrad and other Members of this body.
  The budget resolution would create a 60-vote point of order against 
any new spending for tax cuts that are not fully paid for--that are not 
fully paid for. The simple rule is essential if we are to exercise the 
fiscal restraint that will be necessary to restore sanity to the 
budgetary process and to set our Nation's fiscal circumstances back on 
the right path.
  I believe this budget strikes the right balance for America--between 
the fiscal restraint that is embodied in pay-go and the need to fund 
our Government and between the need to keep taxes on middle-class 
families low and the importance of facing up to our looming budgetary 
challenges from a position of fiscal strength. This budget accomplishes 
those important goals.
  On the spending side, I am particularly pleased the budget resolution 
provides adequate funding for a wide range of programs that are 
important to the people of America and to the people of Colorado. Some 
of those priorities include children's health, education, veterans 
health, and law enforcement.

[[Page S3593]]

These issues have never been more important to America than they are 
today.
  On children's health, an estimated 9 million children in America do 
not have health insurance today. This is a staggering statistic: 9 
million children in America are without health insurance. They do not 
have health insurance; therefore, they do not have access to 
quality health care. These children will be denied the opportunities of 
learning, to grow up in stable family environments, and to become 
productive members of our communities.

  On education, America is quickly losing ground to other nations in 
this global economy. The Federal Government must help local schools 
provide students with the skills they need to compete on a national and 
international basis.
  On veterans health, we are all familiar with the consequences of the 
failure to provide our veterans with the quality care the Nation owes 
them. We currently have over 630,000 veterans of both Iraq and 
Afghanistan. We owe it to them as a nation to ensure they receive the 
best care our Government can provide because that is what we promised 
to each and every one of them and their families.
  On law enforcement, we all know how important it is for our citizens 
to feel safe and to be secure in the fact their Government is doing 
everything it can to protect them in their homes and in their 
communities. That means more effective Federal homeland security 
programs, and it means more police officers in our neighborhoods.
  The budget resolution before us gives these and a range of other 
critical national priorities the full support they deserve.
  For example, this budget provides $552 million for the COPS Program. 
The COPS Program itself has helped put 1,300 police officers on the 
streets in communities of my State of Colorado.
  This budget provides $43.1 billion for veterans programs, including 
veterans health--with a $3.5 billion increase over the President's 
budget request.
  This budget provides $9.2 billion in discretionary education spending 
above the President's budget request.
  This budget provides $50 billion for the State Children's Health 
Insurance Program, SCHIP. That is 10 times what the President has 
proposed, and it starts us effectively down the road of making sure all 
the children of America, in fact, have health insurance.
  This budget protects our communities and our cities and our counties 
by making sure the community development block grants, which are so 
important, are provided $3.8 billion. This represents a very 
significant increase over the President's budget request, which slashed 
the community development block grants.
  This budget provides $1.6 billion for the Department of Energy 
account that, among other things, will fund the National Renewable 
Energy Lab at a level $385 million above what the President requested.
  The budget also provides a $15 billion increase for agricultural 
funding between 2008 and 2012 to give our farmers and our ranchers in 
the forgotten part of America--our rural communities--the assistance 
they need to remain vibrant.
  The budget also rejects the President's proposed cuts to the Payment 
In Lieu of Taxes Program, the PILT Program, restoring PILT funding to 
fiscal year 2006 levels.
  On the revenue side, this budget sets the stage for meaningful 
middle-class tax relief and for aggressive action to close the tax gap. 
As a new member of the Senate Finance Committee, I will do my part to 
help make the chairman's goals a reality. For example, I strongly 
support the chairman's decision to include 2 years of AMT relief for 
middle-class households. That is 1 more year than was set forth in the 
President's budget request. This will ensure that 20 million--20 
million--middle-class taxpayers are not unfairly subjected to the AMT 
for the next 2 years. I am also especially encouraged that Chairman 
Conrad has made a point to emphasize the need to go after corporate tax 
shelters and offshore tax havens as a way of reducing the tax gap. It 
is simply not fair to ask hard-working, middle-class Americans to pay 
their fair share in taxes while we allow large corporations to 
consistently abuse the Tax Code for their own profit. I commend 
Chairman Conrad and the members of the Budget Committee for their 
vigilance in this arena.
  Finally, I believe the budget's deficit-neutral reserve fund for tax 
relief provides an excellent mechanism for extending several critical 
tax credits and deductions that will expire in coming years in a 
fiscally responsible way. The renewable energy production tax credits 
are an example of that in an amendment we just successfully adopted.
  At the end of the day, in 2012, this budget will be balanced. A 
dramatic reversal of our fiscal fortunes will occur because of the 
resolution that is before us today. We need a responsible budget 
blueprint for Congress, and we need it now. This resolution provides 
that blueprint, and I am proud to stand behind it. I will vote for it. 
I urge my colleagues to also support it.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, it is my understanding that the majority 
has until 7:25 under a previous order entered into; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. DURBIN. Mr. President, I rise today to support the budget 
resolution that Senator Conrad has so ably put together. Working with 
his colleagues on the Budget Committee, Chairman Conrad has brought to 
us a budget that puts America's priorities first, and he has done so in 
a responsible way.
  As I have said many times before, a budget is an expression of 
values: you choose what to spend your money on and you choose how much 
of it to spend now instead of later. As families all across America sit 
down at the kitchen table to create their own family budgets, they 
decide what they have to pay for now--the house, the car, the 
electricity, the gas--and then how much they can spend on other things 
without going too far into debt.
  Creating a budget for the Federal Government is really quite similar 
in many ways: this week the Senate will decide what we have to pay for 
now--the war, our veterans, health care, education--and then how much 
we can spend on other things without making our record-shattering debt 
situation any worse.
  I will take a few moments to describe what I think are these key 
investment priorities, and then I will talk for a moment about how I 
think we are addressing these priorities in a responsible way.
  This budget includes substantial funding for many of America's top 
priorities, but I will take the time to highlight just three: veterans, 
health care, and education.
  The Senate budget resolution allocates $43.1 billion for veterans in 
fiscal year 2008 alone. That is $3.5 billion more than President Bush 
recommended in his budget request. With more and more weary soldiers 
returning from the wars in Iraq and Afghanistan, with the deplorable 
conditions in Walter Reed waiting for the injured when they return, and 
with ongoing issues in States like Illinois where veterans benefits are 
lacking, supporting the troops when it really counts--when the checks 
are being cut--is something that we simply must do. This budget gets it 
right.
  This budget also gets it right when it comes to paying for health 
care, both here and around the world.
  For health care around the world, there is no greater funding need 
than for the fight against global HIV/AIDS. In this area, I commend 
President Bush for showing real leadership over the course of his, 
Presidency. But his budget request neglected one of our most cost 
effective tools against this plague--the Global Fund to Fight AIDS, 
Tuberculosis and Malaria. The Senate budget resolution includes $940 
million for the Global Fund, an increase of $640 million over the 
President's request. Even more is needed, but this is a good start. To 
fight HIV/AIDS or make progress on other critical health and 
development challenges, we must make these necessary investments.
  Here at home, the budget resolution provides for up to $50 billion 
for is the SCHIP program over 5 years. The Bush budget request is $2 
billion. It is clear that the Bush administration has not

[[Page S3594]]

made affordable health care for our Nation's neediest children a real 
priority. The Democrats have.
  Since the creation of the SCHIP program 10 years ago, more than 6.2 
million children have been covered by this vital program, including 
over 290,000 children in my home State of Illinois.
  As the first State to provide health insurance to all children, 
Illinois has been a leader in the fight to change the course of health 
care in this country. Since 1993, SCHIP and other Federal programs have 
helped make it possible for Illinois to provide health insurance to 
more than 313,000 children who didn't have it before.
  How big is the need for better investments in our children's health? 
In a study of over 20 developed nations released last week by UNICEF, 
the United States ranked as one of the worst places to be a child. What 
does that say about us as a country and our commitment to our 
children--our future? What does it say about this Government's 
priorities over the last 6 years?
  UNICEF looked at six dimensions of child well being. Of the five 
categories for which the United States was ranked, our country ranked 
in the bottom third in four categories. In fact, we were next to last 
in the ``family and peer relationships'' and ``behaviors and risks'' 
categories. And we were dead last in ``health and safety.''
  We must make the commitment and investment in the health and well-
being of our children to ensure their success--not create circumstances 
that make it more difficult for them to realize their potential. I 
think that this budget starts to correct our course, providing more 
investment in our kids where it is desperately needed.
  This budget also proves that the Democrats in Congress believe that 
there are few better investments in the future of this country--in the 
future of our children--than education. The budget resolution includes 
$62.3 billion for education in fiscal year 2008. That is $6.1 billion 
more than the Bush request. We absolutely must make this investment now 
in order to reap the benefits in the future. Our kids deserve nothing 
less.
  As we have allocated robust funding for our Nation's top priorities, 
we have done so in a fiscally responsible way. Under Chairman Conrad's 
leadership, this resolution would take us several steps down the road 
towards fiscal sanity after years of endless deficit spending that 
placed today's tax cuts for the wealthy on the future credit cards of 
our children.
  First, the resolution would create an annual budget surplus by 2012. 
Since we currently find ourselves with more debt than the Nation has 
ever accumulated before--just as the baby boomers are getting ready to 
retire--balancing the budget is fundamentally important.
  Second, the resolution reduces both spending and the debt as a share 
of GDP over the 5-year life of the resolution. We have a long way to go 
towards paying off our $9 trillion in debt, but this is a good start.
  Third, the resolution restores a strong pay-go rule that the 
Republicans had allowed to expire. Congress will be able to spend money 
on critical needs if it chooses to, but we will have to pay for that 
spending at the same time. Likewise, we will be able to cut taxes if we 
want to, but we will have to pay for that as well.
  Fourth, the resolution provides 2 years of middle-class tax cuts 
through continued relief from the alternative minimum tax. Whereas the 
President's budget called for a huge tax increase on the middle class 
in 2009 by refusing to provide AMT relief for more than 1 year--a 
decision that would lead to a substantial tax increase for 25.7 million 
middle-class Americans--this budget extends that relief for another 
year to ensure that the middle class does not become ensnared in this 
tax that was meant to ensure the wealthy paid their fair share of 
taxes.
  In total, this budget provides a valuable blueprint that should help 
guide the Senate in providing funding for our Nation's priorities while 
ensuring that we do so responsibly. I urge my colleagues to support it.
  Mr. HATCH. Mr. President, I understand the time until 8 is relegated 
to us. I ask unanimous consent that the distinguished Senator from 
Colorado be given up to 7 minutes and then the rest of the time be 
turned over to me.
  The PRESIDING OFFICER. Is there objection?
  Mr. HATCH. Mr. President, I intend to reserve some time for the 
distinguished Senator from Alaska.
  Ms. MURKOWSKI. I thank the Chair. I wanted to make sure I was still 
in the queue.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. ALLARD. Mr. President, I thank the Senator from Utah for 
yielding. I appreciate his work and the leadership he brings forward 
here in the Senate from the great State of Utah.
  I am going to vote against the budget, and this is the main reason 
why: It raises taxes by $900 billion over 5 years and a projected $3.3 
trillion over 10 years. That translates into a tax increase of $2,641 
per household annually over the next decade.
  It includes 22 reserve funds that could be used to raise taxes by 
hundreds of billions of dollars more. It increases discretionary 
spending by nearly 9 percent in fiscal year 2008, and does not 
terminate one single program. It completely ignores the impending 
tsunami of Social Security, Medicare, and Medicaid costs. It encourages 
rules that bias the budget toward tax increases.
  I had an amendment earlier today that we voted on which looked at 
ineffective programs as described by the Office of Management and 
Budget. This was in response to legislation we passed over a decade 
ago, and we instructed the agencies to look at setting goals and 
objectives and then coming forward and seeing how they met these. OMB 
looked at these and said there were 26 out of over 1,000 programs where 
they didn't meet those goals. If you took these 26 programs, we were 
looking at $88 billion over a 5-year period of time.
  I had an amendment that said: Let's give instructions to the 
appropriators to go into these various areas and see if we can't come 
up with $18 billion of reduced spending and programs that have been 
classified by OMB. These are civil servants working for the Federal 
Government. They don't have a political agenda, just strictly looking 
at the program objectively. I was disappointed the amendment did not 
pass.
  Tomorrow I plan on introducing an amendment that is going to call for 
reconciliation for a 1-percent elimination of fraud, waste, and abuse 
in a number of mandated programs which does not include--does not 
include--armed services, veterans, and Social Security. The purpose is 
to improve the economy, efficiency, and effectiveness of Federal 
programs and to reduce the Federal debt.
  The other amendment, on the savings we voted on earlier this year, 
was money that was directed toward reducing the Federal debt. This 
amendment tomorrow will instruct the authorizing committees to reduce 
spending by 1 percent by eliminating waste, fraud, and abuse. The 
amendment reduces waste, fraud, and abuse in mandatory programs by $13 
billion in the first budget year, and $71 billion over 5 years. All of 
the savings will be used to reduce the debt.
  This amendment carries across the finish line work that Congress 
started in 2003. In the fiscal year 2004 budget resolution, the 
Congress directed the Comptroller General to submit a comprehensive 
report identifying instances in which the committees of jurisdiction 
may make legislative changes to improve the economy, the efficiency, 
and effectiveness of Federal programs within their jurisdiction.
  In compliance with our request, GAO--again staffed by professionals 
who do not carry a political agenda--submitted a 300-plus page report 
chock full of specific examples of legislative changes with the 
potential to yield budgetary savings. What have we done with that 300-
page report that we requested? Nothing, absolutely nothing.
  My amendment picks up where we left off and encourages the 
authorizing committees to improve the economy and the efficiency and 
effectiveness of programs under their jurisdiction. So in my effort to 
eliminate waste and to bring about good stewardship of taxpayer 
dollars, I ask the Members of this body to support it. It is not a 
partisan issue. Oversight is a key function of Congress, and when we 
set up these pieces of legislation to set up reasonable oversight as 
Members of the Senate, we need to be prepared to carry

[[Page S3595]]

those recommendations forward when they come to our attention. I hope 
this amendment will enjoy broad and bipartisan support. Both amendments 
were supported by Citizens Against Government Waste. I think it is one 
small step we can do to at least bring about an effort to reduce fraud, 
waste, and abuse, and these programs have been clearly identified by 
both this particular amendment, by GAO, and the previous amendment by 
OMB.
  I ask my fellow Senators to join me in voting for this amendment.
  Mr. President, I yield the remaining time to the Senator from Utah.
  Mr. HATCH. Mr. President, I would like to take a few minutes to talk 
about an amendment I will offer tomorrow to ensure that as the budget 
debate continues, Congress works to protect Medicare beneficiaries' 
coverage choices, especially coverage choices for those beneficiaries 
living in rural areas and low-income Medicare beneficiaries.
  My amendment is simple. It would establish a budget-neutral reserve 
fund so that if Congress implements improvements to Medicare, Medicaid, 
or CHIP, it may not do so in a way that leads to fewer coverage choices 
for Medicare beneficiaries. It also may not reduce the benefits of 
those beneficiaries who are enrolled in Medicare Advantage plans.
  Let me give my colleagues a little bit of history on the Medicare 
Advantage program which was established by the 2003 Medicare law.
  Under Medicare Advantage, health plans receive a monthly payment to 
provide beneficiaries all of the benefits covered by traditional 
Medicare.
  But Medicare Advantage plans provide a lot more to beneficiaries.
  Medicare Advantage plans provide a range of additional benefits not 
available in traditional Medicare--benefits such as vision and dental 
care, physical exams, and hearing aids.
  Mdicare Advantage plans also have chronic care management programs to 
help beneficiaries with chronic illnesses such as diabetes or 
congestive heart failure better manage their conditions and stay 
healthy.
  Now, health plans participating in Medicare is not a new thing.
  They've served Medicare beneficiaries for many years going all the 
way back to the 1970s through programs authorized by Congress.
  For the most part though, up through the late 90s, Medicare health 
plans were largely available only in urban areas.
  Going back now for a decade, back to the Balanced Budget Act of 1997, 
the fact that beneficiaries in rural areas had few, if any , choices, 
led Congress to take actions to promote plan availability in those 
areas.
  Yes, these actions included increasing payment rates to address the 
fact that Medicare payments in urban areas were higher--in some cases a 
lot higher--than payments in rural areas.
  I know my home Sate of Utah had difficulty keeping Medicare+Choice 
plans in the state primarily because payment rates were too low.
  Ironically, many Utahns wanted to participate in these plans because 
they were the only ones offering supplement benefits such as vision 
care, preventive benefits and prescription drugs to Medicare 
beneficiaries at the time.
  But due to low payments and adverse selection, both Medicare+Choice 
plans dropped Utah beneficiaries and as a result, my constituents had 
limited choices for Medicare coverage until the Medicare Modernization 
Act created the Medicare Advantage program.
  So let me show you what beneficiary choices look like today.
  The top map shows where plans were available in 2003.
  The white space means that only traditional Medicare was available.
  In 2007, beneficiaries--whether they live in an urban area or rural 
area--could chose from different Medicare Advantage plans, and all 
beneficiaries have more choices.
  All beneficiaries can now choose a Medicare Advantage plan that 
offers them important additional benefits and lower out-of-pocket 
costs.
  Now here is a good example of the benefits of Medicare Advantage--all 
beneficiaries may choose a plan that has no cost-sharing for breast 
cancer screening.
  We all know the importance of breast cancer screening.
  Beneficiaries with diabetes can choose a plan that offers them 
diabetes self-management services without any cost-sharing.
  On cost sharing, according to CMS, millions of beneficiaries can 
enroll in a plan that limits their out-of-pocket costs to $1,000 a 
year.
  For low-income beneficiaries, protection from high out-of-pocket 
costs, which they don't have in fee-for-service, is a valuable benefit.
  We know that many low income beneficiaries rely on their plans for 
this protection.
  According to CMS, 57 percent of Medicare Advantage beneficiaries have 
incomes between $10,000 and $30,000 compared to 46 percent of fee-for-
service beneficiaries.
  Another area I want to talk about is quality. Data from the Medicare 
Current Beneficiary Survey show that Medicare Advantage beneficiaries 
are more likely to obtain preventive services, including flu and 
pneumonia shots and cancer screenings.
  Surveys also show that beneficiaries are satisfied with their plans.
  So let me conclude by urging my colleagues to keep in mind the 
following:
  Beneficiaries across the nation--whether they live in a rural state 
like Utah or an urban area like New York City--now have more coverage 
choices.
  These choices offer beneficiaries more benefits and lower out-of-
pocket costs.
  Beneficiaries are satisfied.
  Let's not forget that it was through policy decisions supported by 
Members on both sides of the aisle that helped achieve those results, 
and those results, in my opinion, are worth protecting for 
beneficiaries' sake.
  I urge my colleagues to support my amendment.
  Mr. President, today we are debating the size and composition of the 
Federal budget for fiscal year 2008.
  This is a critical debate. And it is one that future generations will 
look to in order to determine where we went wrong or where we went 
right. Just as adherence to a budget can make or break a family or 
small business, so too can Congress's development of and adherence to a 
budget make or break our economy.
  Whether it is a family budget, or the congressional budget, it must 
be based on an honest assessment of the facts. The budget must make 
reasonable projections about what money is coming in and what money is 
going out.
  A budget must face hard facts, not hide from them.
  When I hear from my constituents in Utah, they talk about the need 
for tax cuts that benefit families and small businesses.
  They talk about fixing Social Security and Medicare.
  The 2006 annual reports for those programs showed their unfunded 
liabilities to be $84 trillion in today's dollars. That was up $7 
trillion over the previous year.
  With 77 million baby boomers about to retire, this is a serious 
problem.
  We need a budget that is serious about the challenges we face, the 
revenues we can anticipate, and the expectations of the American 
people.
  We need a budget that swings for the fences, but this budget is 
playing small ball.
  It is big spending, without any big ideas, and the result will be big 
tax hikes on the American people.
  After reviewing the bill before us today, I must candidly admit this 
budget falls short of realistic spending and revenue projections. You 
could even go so far as to say it's filled with deception and fantasy.
  Simply put, this budget is not honest. It spends more than is brought 
in. And a lot of the revenues it projects are not really there.
  If my constituents in Utah budgeted like this, they would have a 
serious problem making ends meet.
  The proponents of this budget claim that it is the cure to everything 
that ails us.
  But Americans know snake-oil when they see it.
  This miracle cure will lead to one of two maladies--over time, it 
will greatly increase the deficit or it will require massive tax 
increases.
  Consideration of this budget would not be possible without the good 
fortune of our booming economy. Perversely, however, this budget 
provides a recipe for destroying the extraordinary growth created by 
this economy.

[[Page S3596]]


  I don't believe it is an exaggeration to say--the economy is booming 
and revenues are up. In fact, revenues are up substantially.
  They are up because of sound fiscal policy.
  They are up because of progrowth tax cuts that have increased 
productivity and wages.
  It is easy to forget and sometimes our memories are short. But, in 
the autumn of 2001, our economy was in shambles.
  We were hit with a one-two punch, and we were down on the mat.
  The booming economy of the late 1990s went bust. When the dot-com 
bubble burst, billions of dollars in equity were lost, and millions of 
people began looking for work.
  And then in the midst of that recession, our Nation was attacked.
  It was not a foregone conclusion that a nation at war, already 
suffering a considerable economic downturn, would emerge with its head 
held high and an economy on the rebound.
  But we did.
  And we did so because President Bush and Congress held strong in 
pushing through tax cuts and stimulus tax incentive bills that have 
benefited each and every American.
  I know that some of my colleagues want to maintain the illusion that 
our economy is two-tiered; they say that it is great for the rich who 
are making out like bandits, and terrible for everyone else. And the 
2001 and 2003 tax cuts have the lead roles in this melodrama.
  However, the numbers tell a much different story.
  Americans are paying taxes--a lot of taxes.
  Between 2004 and 2006, we saw an inflation-adjusted 20 percent tax 
revenue increase. This was the largest 2-year revenue increase since 
1965.
  Tax revenues, at 18.4 percent of gross domestic product, are above 
the 20, 40, and even 60 year historical averages. That is not enough 
for Democrats, however, who want to soak the rich, but will wind up 
drenching the middle class.
  The real devil to them is the tax cut for capital gains and 
dividends.
  Supposedly, these capital gains and dividends tax cuts were skewed 
toward the rich.
  These class warriors need to take a vacation in the reality-based 
community.
  Here's the real deal.
  First off, stock ownership is not something just for the wealthy.
  Sometimes I think that my colleagues are using talking points written 
in 1933.
  Today, stock ownership is for the middle class.
  When you turn on college basketball this weekend, you will see 
commercials enticing people to hire companies to manage their stock 
portfolios.
  They are not being marketed to monocle-wearing, sports car driving, 
plutocrats.
  They are not being marketed on ``Masterpiece Theatre.''
  They are being marketed to average families. You will see people at 
work, people making burgers on the backyard grill, and people with 
families living in the suburbs buying stocks and bonds, generating 
capital gains and dividends to save for their children's college 
educations.

  It is not just folks in affluent areas of the country who benefit 
from lower capital gains rates.
  A policeman in Salt Lake City, a lineman at an auto plant in Michigan 
or a schoolteacher in California--all have pensions that are invested 
in the stock market.
  And they all benefit from capital freed by these tax cuts.
  In 2003, our capital gains tax rates were set at 20 percent and 10 
percent.
  Congress reduced these rates to 15 percent and 5 percent.
  And what were the revenue estimates?
  The Congressional Budget Office expected that revenues would expand 
somewhat--from $50 billion to $68 billion.
  It turns out CBO was a bit off.
  Capital gains revenues doubled.
  Let me repeat that.
  Capital gains receipts jumped from $50 billion to $103 billion.
  So here is the final take on these tax cuts: They turbocharged the 
economy. They created jobs. Good jobs. They have led to increased 
revenues. And they will continue to do so, as long as we do not choke 
them off with the tax increases contemplated by this budget.
  But this budget is a recipe for undoing our economic expansion and 
growth.
  Some people have characterized this budget as smoke and mirrors.
  That is too generous.
  Smoke and mirrors suggests that the supporters of this budget are at 
least embarrassed about its future implications.
  It suggests that they are trying to pull the wool over the eyes of 
hardworking Americans.
  But there is no subtext to this budget. It is not an esoteric 
document. The tax and spend message is right there on the surface.
  It is not exactly the same as Democratic presidential candidate 
Walter Mondale going to San Francisco and gleefully promising to raise 
our taxes.
  But it comes close.
  It certainly looks like we are going to get another dose of this San 
Francisco treat from the Democratic majority. I guess some things never 
change.
  This is a big spending budget.
  And it is a big taxing budget.
  Tax and spend.
  Where have we heard that before?
  Make no mistake about it.
  The fact that the Senate adopted Senate amendment No. 492, sponsored 
by the chairman of the Finance Committee, Senator Baucus, does not 
change the character of this budget.
  It was an important amendment. But in the end, by omission it 
actually emphasized the high taxing assumptions embedded in this 
budget.
  It did nothing to help alleviate the substantial tax hikes that most 
middle class Americans will face under this budget.
  It did nothing to protect the capital gains rates that are so 
critical for retirement savings and continued economic growth.
  I know that the criticism of this budget as more tax and spend 
politics must have bothered some of my colleagues because it prompted 
them to offer and vote for this amendment.
  Just a few months ago, many of us were campaigning on a promise of 
fiscal responsibility.
  Promises, promises.
  The authors of this budget seemed to have lost their appetite for 
fiscal responsibility the minute they stepped off the campaign bus.
  And so here they are reverting to instinct.
  Next year, the Senate appropriators will be able to spend $16 billion 
more than the President recommended. And over 5 years, that number 
grows to $146 billion.
  We are going to see discretionary spending rise to 4.2 percent--
higher than the inflation rate. And trust me. They will spend every 
penny.
  We are about to get some sense of Democratic fiscal discipline, when 
the House of Representatives takes up the national security 
supplemental spending bill.
  Among the national security priorities in that bill will be: $25 
million going to spinach growers. $74 million going to peanut storage.
  And the list goes on and on.
  All told, the House supplemental appropriations bill will be larded 
up with $21 billion in spending unrelated to national security.
  This is certainly an unusual way to go about fiscal responsibility 
and taking care of our troops.
  And it is just a taste of things to come.
  The increases in spending contemplated in this budget might all be 
great news for civil engineers in West Virginia. But for future 
generations who will have to pay the bill associated with this budget, 
it is not great news.
  Now, concerning the AMT. This budget also gives us a 2-year AMT 
patch.
  Earlier this year, a number of my Democratic colleagues criticized 
the President for failing to provide a permanent solution to the AMT. 
Yet this budget does nothing to fix the underlying problem.
  As inadequate as this fix is, there is a more nagging question. How 
are we going to pay for all of this?
  Do you remember that campaign promise?
  A Democratic Congress will restore fiscal responsibility by restoring 
pay-go. It will require offsets for any new spending or tax cuts.

[[Page S3597]]

  OK. So where are those offsets coming from?
  Here is where this budget leaves the land of wishful thinking and 
enters the realm of unfortunate delusion.
  We are going to pay for it with--drumroll please--the tax gap. Yes, 
the magical, wonderful, tax gap. The difference between the amount of 
money collected by the Government and the amount of money owed. The 
solution to all of life's problems.
  To balance this budget, there is an assumption of 3 percent more 
revenue over 5 years than the President assumed. And where is that 
revenue coming from?
  The tax gap! Of course! Why didn't we think of that?
  You see, this budget does not contain even $1 of mandatory savings. 
Yet we are going to provide AMT relief, and we are going to increase 
Federal spending.
  And we will pay for it by closing some tax loopholes and putting an 
IRS agent in every small business in the country to make certain that 
not one dime of potential revenue goes uncollected.
  Some people have called the tax gap the pot of gold at the end of the 
rainbow. Well, it is a pot at least.
  Here is our best estimate--in 2001 the net tax gap was about $290 
billion. Over 5 years, the tax gap is $2 trillion. Wouldn't that be 
nice? The tax gap is the deus ex machina that will come in and save 
this budget mess.
  But everyone admits those are very unreliable numbers. Could we be 
doing better when it comes to collecting taxes? Certainly. We should be 
collecting more revenue.
  But what is a realistic estimate?
  Our tax collection system, imperfect as it is, already is the envy of 
the rest of the world.
  So what is a reasonable estimate of how much we can expect from the 
tax gap?
  The President proposed in his budget 16 different options for closing 
the tax gap. And they would raise $29 billion over 10 years.
  That's it. And not one person in this body seriously believes that we 
can collect anything near the amount needed to balance this budget.
  So we have a $110 billion AMT fix. Fifty billion dollars of this 
falls in the first year. I cannot even conceive of a tax gap revenue 
offset that would cover $50 billion in 1 year, unless Congress raises 
the tax rates.
  We have $146 billion more in spending over 5 years. We have no 
reductions in spending. And the tax gap is not paying for it. So who 
is? Let me be absolutely clear. You will be paying for it. I will be 
paying for it. We all will be paying for it. Each and every American is 
going to pay for this budget. We are going to pay for it through higher 
taxes. We are going to pay for it by working more hours for less 
money. And ultimately, we will pay for it as economic growth and 
productivity sag under increased spending, higher taxes, and declining 
economic growth.

  There is only one way for this budget to work. It has to assume that 
we will not extend the 2001 and 2003 tax cuts.
  Make no mistake about it. This means a tax increase on every middle 
class American.
  This plan will not just kill the goose laying the golden eggs. It is 
going to wring its neck, stamp on it, and throw its limp lifeless body 
in the river.
  If we in Congress do eventually get our act together and balance the 
Federal budget over the next few years, it will be despite this budget, 
not because of this budget. It will be because our economy continues to 
grow. Because of sound fiscal policy, because of the tax cuts, because 
businesses will continue to open, jobs will continue to be created, and 
tax revenue will continue to go up.
  We have seen this pattern repeated decade after decade in this 
country.
  Unfortunately, this budget relies on assumptions that have proven to 
be false time after time. It assumes that we will balance the Federal 
budget through massive tax increase. It sets aside no room to extend 
the 2001 and 2003 tax cuts.
  In President Clinton's first term, he raised taxes by $241 billion. 
That was quite an achievement.
  For those of you who have forgotten, and I know that my constituents 
in Utah definitely have not, it was the single biggest tax increase in 
American history.
  And 1 year later the party responsible for this fiscal lunacy was 
tossed unceremoniously out of Congress.
  Yet this Congress is set to run circles around President Clinton.
  This budget assumes a $916 billion tax hike over 5 years. That is 
real money. And I imagine it will be unacceptable to many of my 
colleagues. This is fiscal irresponsibility of the highest magnitude. 
We need to be straight with the American people.
  I know that the majority is in a bit of a jam. In some ways, I feel 
sorry for them. They promised to fix AMT. They made promises to special 
interest groups to hike spending. They made promises about fiscal 
responsibility and budget balancing.
  And what did they say about taxes? You could hear crickets chirping 
when that subject came up. And today they are still sitting awkwardly, 
avoiding the obvious. Yet it is ordinary Americans who are going to be 
left holding the bag.
  This budget is writing checks that the majority cannot cash without 
asking the American people to pay higher taxes. The most offensive part 
of this plan is that they know it, and are just hoping to skate by.
  Call it what you want--a caper, a swindle, fiddling while Rome is 
burning, Wizard of Oz budget, robbing Peter to pay Paul. The fact is, 
this budget is a boondoggle. The people of Utah deserve better, future 
generations deserve better, and the American people deserve better.
  While I am here, I would like to express my support for the Sessions 
amendment No. 473, which would refocus alternative minimum tax relief 
toward families.
  Unlike the situation we had a few years ago when a majority of this 
body supported the alternative minimum tax, I doubt if we could now 
find a single member of the Senate who supports the AMT as it currently 
exists. In fact, this insidious tax has so encroached upon our tax 
system, and threatens to do so much more damage to the American 
taxpayer, that I would be surprised if we could find even one Senator 
who would not support total repeal or major reform of this flawed tax.
  Despite widespread contempt for the alternative minimum tax, it is 
clear that the AMT already has gotten a vice-like grip on our fiscal 
system. Unfortunately, we are already so reliant on the massive revenue 
the AMT generates and is expected to bring in over the next few years, 
that making major changes to this tax seems out of reach, absent major 
tax reform.
  Therefore, recent budgets considered by the Senate have included 
provision for legislation only to help mitigate the effect of the AMT 
on most American taxpayers, and not to repeal it. This lessening effect 
has been brought about by temporary laws that raised the thresholds of 
the tax for 1 year in order to limit the reach of the alternative 
minimum tax on middle class taxpayers.
  For example, the so-called ``AMT patch'' that is in effect for 
calendar year 2006 raised the threshold for married taxpayers filing 
joint returns to $62,550 from $45,000. The thresholds for taxpayers in 
other filing brackets were also increased accordingly, but again for 
only 1 year.
  According to the staff of the Joint Committee on Taxation, the 2006 
AMT patch has kept the AMT at bay for nearly 20 million taxpayers. 
However, this relief ran out at the end of 2006. For the current tax 
year, we now need to pass legislation to hold off the alternative 
minimum tax for millions of middle-class taxpayers.
  While the budget resolution before us ostensibly provides for a 2-
year AMT patch, the details are fuzzy about how we will pay for this 
relief. For now, however, I will set aside my concerns about that issue 
and focus on another important one, and that is the issue brought up by 
the amendment of the Senator from Alabama.
  The Sessions amendment would change the focus of how we approach 
relief from the alternative minimum tax. I strongly support this 
change, for if we cannot repeal the AMT immediately, our relief efforts 
should be focused first on the most egregious causes of alternative 
minimum tax liability.

  Tax liability under the AMT can arise for a number of different 
reasons. However, one of the most common reasons why taxpayers find 
themselves

[[Page S3598]]

subject to AMT is because they have children. As hard as it might be to 
believe, dependency exemptions are not allowed against the alternative 
minimum tax.
  Another leading cause of taxpayers being thrown in to the alternative 
minimum tax is the fact that State and local taxes are not deductible 
under the AMT. There seems to be a common misconception that the State 
and local tax deduction problem is the biggest factor in determining 
AMT liability.
  In fact, according to the staff of the Joint Committee on Taxation, 
more taxpayers face the ravages of the AMT because of their personal 
exemptions being denied than for any other reason. JCT projects that 
for 2007, absent relief, more than 23 million tax returns will be 
thrown into AMT because of the personal exemption preference, where 
less than 20 million will be hit by AMT because of State and local 
taxes. In subsequent years, the difference is even more pronounced.
  The Sessions amendment is a simple one. It essentially says that 
since we do not have the resources to repeal the AMT all at once, we 
should prioritize our relief by first fixing the problem that causes 
families with children to face the alternative minimum tax before we 
attack other problems, such as the one caused by the lack of 
deductibility of State and local taxes.
  Many families in my home State of Utah find themselves increasingly 
at risk of the alternative minimum tax. In fact, unless we act soon, an 
increasingly high percentage of married families with children--not 
just in Utah, but all over the Nation--will find themselves in the 
clutches of the AMT.
  And many of these are not high income families. Seventy-one percent 
of all married taxpayers with children earning between $75,000 and 
$100,000 will be AMT taxpayers this year, in the absence of relief. For 
those families with children making between $100,000 and $200,000, the 
amount is 97 percent. The rate of AMT paying for single taxpayers is 
much lower, only 9 percent for those making between $75,000 and 
$100,000, and 36 percent for those making between $100,000 and 
$200,000.
  Although I am the first to agree that we should repeal the entire 
alternative minimum tax, that is probably not possible this year. Given 
that we must choose partial relief, it makes sense to me that we should 
first give the relief to families with children. Let's first remove the 
personal exemption as an AMT tax preference item. This amendment is 
profamily, and I urge my colleagues to join me in supporting it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.


                           Amendment No. 551

  Ms. MURKOWSKI. Mr. President, I rise tonight to speak about an 
amendment that I will be modifying, amendment No. 551, that will 
increase funding for renewable energy development in this country. This 
amendment is offset. It is intended to provide funds for three areas of 
renewables that have the potential, I believe, to do great benefit for 
this Nation's electrical power generation, all without generating any 
greenhouse gases or having any negative environmental consequences.
  My colleague, Senator Stevens, and I are seeking to raise funding for 
geothermal power, for ocean energy, and for small hydroelectric 
development.
  I first wish to say I understand this budget resolution does raise 
funding for renewables and energy efficiency, and I applaud that 
effort, even though it falls somewhat short of the levels of funding we 
were hoping for when we passed the Energy Policy Act of 2005 a couple 
years ago.
  But I fear the budget shortchanges three areas of great potential 
energy, and that is, again, the area of geothermal, ocean energy, and 
small hydroelectric development. By this amendment, I wish to make a 
clear statement that this Senator wants to see money not just restored 
but increased for geothermal energy research and development and 
funding provided for research and development of all forms of ocean 
energy--current, tidal, wave projects--and also for the small 
hydroelectric developments, those that do not involve the damming of 
major river systems but instead use water from lake taps, creeks, or 
from run-of-river projects to generate the power.
  We know that renewable energy is certainly growing in popularity and 
endorsements, and I very strongly support funneling additional Federal 
funds for research and development into the areas of wind, solar, 
biomass, coalbed methane, landfill gas, and all the other types of 
renewable energy projects we authorized in the Energy Policy Act of 
2005.
  But we largely have not done as well with geothermal funding and 
certainly have done far less to promote ocean and small hydroenergy 
developments.
  On the geothermal issue, funding in recent years has dipped 
precipitously. This year, the Department of Energy is proposing no 
funding for geothermal. Last week, they did agree to effectively make a 
total of $5 million of new money available to study one possible area 
of geothermal, and this is in the area of heat mining, but this is just 
for the remainder of this fiscal year. After that, there is no funding.
  This cut in funding, this zeroing out comes as MIT has released a 
report on the ``Future for Geothermal Energy.'' That report suggests 
enhanced geothermal system technology could provide 100,000 megawatts 
of baseload power, all without greenhouse gas emissions by 2050 if the 
Government increases its research commitment to resource 
characterization and assessment.
  The cut in funding also comes just as the Department of Energy has 
had a major success in proving the ability to convert low-temperature 
geothermal resources--this is subsurface water that is far below the 
boiling point, perhaps as low in temperature as 160 degrees--to power 
generation. This success in using new types of heat exchanges to drive 
power generation came about and was perfected in Alaska.
  We have a location, Chena Hot Springs Resort, outside Fairbanks. The 
owner, Bernie Karl, has been dogged in his approach to making this 
happen, to defy the critics and the odds stacked against him to install 
the first low-temperature generation working process. This project has 
won accolades and engineering awards in the past year.
  Mr. Karl did what everybody said he couldn't do. Some in the Energy 
Department seem to feel this project perhaps is not representative of 
anything other than this nice minor energy project in Alaska. But they 
don't seem to recognize that about 70 percent of the villages in Alaska 
and in many small towns in the American West all lie above potentially 
similar low water, shallow ground geothermal resources. They are 
sitting right on top of the resource. So in a State such as Alaska, 
where electricity can cost 80 cents per kilowatt hour generated by 
diesel fuel--this is how most of my villages are getting their fuel 
now--geothermal power at an operating cost of perhaps one-sixth to one-
eighth of that amount is potentially a godsend. But there is no money 
in the budget to fund anything to support the geothermal energy.
  There is also nothing to encourage traditional geothermal assessment 
and production, which has proven its worth in States from Nevada and 
California to the Intermountain West.
  By specifically adding money to this budget and specifically saying 
that this addition is intended to provide an additional $50 million to 
geothermal for this year, it increases greatly the chances that 
appropriators later this year will not only restore but perhaps boost 
funding for geothermal energy.
  On the ocean energy front, the Electric Power Research Institute 
estimates that this country has the potential from wave power to 
generate 2,100 terawatt hours of power, and if we were to capture 15 
percent of that power, it would equal all of the hydroelectric 
generation in this country today.
  We know that in a State such as Alaska, where we are surrounded 
literally on three sides by water, ocean energy is a huge potential 
source of power. But it is also an enormous source of power along the 
east coast, if we perfected devices to capture it so we have the 
economies of scale that make this power truly economic. Look at the 
west coast with California. We have the potential for so much with 
ocean energy.
  Ocean energy is clean. It has no air emissions, minimal visual 
impacts, and it could provide plentiful power for everything from 
freshwater desalination to hydrogen production. It could help economic 
development by providing a

[[Page S3599]]

cheaper, more plentiful supply of power in so many areas across this 
country.
  So my amendment is intended to provide $50 million of funding for 
ocean energy research in fiscal year 2008. It would be a powerful 
statement that Congress supports this form of clean renewable energy.
  A final component of the amendment seeks to encourage a $25 million 
expenditure for small hydro development. Again, this is not damming 
rivers to produce electricity but tapping non-fish-bearing lakes or 
diverting water from creeks to fuel smaller hydro units. These projects 
have little or no environmental impact on wildlife but can produce 
large amounts of greenhouse-gas-free energy. But the minimal grant and 
research assistance to continually improve the turbines will be quite 
beneficial.
  In Alaska, we have over 100,000 rivers and large creeks. So we are a 
location, again, where small hydro can supply a large share of our 
future electrical needs, as it has done without environmental 
consequences for about 100 years, especially if we have this additional 
Federal assistance.
  I come to the floor tonight to encourage adoption of an amendment 
that will help to encourage additional funding for renewable energy for 
those, I believe, neglected areas of the renewable energy portfolio.
  I mentioned the amendment is fully offset. The $125 million total 
comes from the function 920 portion of the budget, miscellaneous 
allowances portion of our budget.
  I will not belabor this further except to encourage my colleagues to 
support this amendment as a way of sending a clear signal that we 
support additional funding for renewable energy and for a wider 
portfolio of renewable energy projects. We don't want to repeat the 
mistakes of the past, where we limit support to a few technologies so 
that we in Congress essentially pick the winners and the losers. By 
adding additional research and development assistance for geothermal, 
ocean energy, and small hydro, we can increase the possibilities that 
will allow these renewables to blossom. This comes at a modest impact 
on the budget, but I believe it could pay a huge benefit for our energy 
production in the future.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Mr. President, I rise to discuss two amendments that I 
have offered. The first would enable our Nation to better support our 
military and our veterans.
  On September 11, 2001, our Nation was attacked by radical Islamist 
terrorists and the long war began. It is a war different than any we 
have fought before because of the willingness of our enemies to attack 
innocent Americans at home by killing themselves. Someone else has said 
they hate us more than they love their own lives. But it is also a war 
that is similar to other long wars we have fought throughout American 
history in which we were pitted against a great evil, an evil that 
threatened not just the security of our society but the ideals and 
values that form the bedrock of our way of life.
  In the Civil War, we fought against the evil of slavery. In World War 
II, we fought against the evil of fascism. In the Cold War, we fought 
against the evil of communism, and today we are fighting a world war 
against the evil of Islamist terrorism.
  In each of these past struggles, our Nation fully mobilized. We 
rallied as only a free people are capable of doing. Millions and 
millions of citizens bound together, shoulder to shoulder in defense of 
our freedom, with a shared sense of service, sacrifice, and support of 
our troops. Our sacrifices went far beyond the battlefield, they 
suffused our society. In each of these past struggles I have mentioned, 
those Americans who were not asked to put on a uniform nonetheless 
shared in the burdens imposed by war. That is how democracies should go 
to war.

  Today, we find ourselves engaged in another global struggle for 
freedom, a struggle that stretches from the mountains of Afghanistan to 
the streets of Baghdad, from the jungles of Southeast Asia to the 
deserts of Somalia, and from the nightclubs of Bali to the subways of 
London. The fact is that though our military is fully engaged in this 
war, most of the rest of America is not.
  Five years after September 11, very little has been asked of most of 
the American people. Instead of mobilizing as a nation, the burden of 
this war has fallen disproportionately on the few, on our soldiers, our 
brave men and women in uniform. They are the ones who have put their 
lives on the line so that freedom may prevail. In this Chamber and 
across our land, there have been great differences of opinion about how 
we should pursue the war in Iraq, but there has been great unity of 
opinion that our troops there should be honored. We must support them.
  That has become a common banner under which all of us have rallied 
time and again. We support our troops. We say it on the floor of this 
Chamber almost every day. We support our troops. We say it on 
television and radio. We support our troops. We put it on the bumpers 
of our cars. We support our troops. But I ask my colleagues, can we 
honestly say we really have done all we can and should to support our 
troops? I think the answer is clear: No, we can't. We have not.
  Look at the facts. Our Army and Marine Corps are stretched to the 
breaking point, short on personnel, training, and equipment. Our Navy 
has fallen dangerously below 300 ships. Our Air Force is forced to cut 
57,000 people in uniform in the next 5 years. Everybody in this Chamber 
knows--and all Americans know, too--about the terrible conditions of 
Walter Reed's Building 18 and the larger crisis in health care for our 
soldiers and our veterans lurking just beneath it. No one can possibly 
look at our troops and our veterans today and feel satisfied that we 
are doing all we should to support them.
  I know some say these problems are only temporary, that once we leave 
Iraq, everything is going to be fine for our troops and our military. 
But this war is not just about Iraq; it is a global conflict with 
Islamist extremists who have declared war on most of the rest of the 
world. Even if the war in Iraq ended tomorrow and all our troops could 
magically be withdrawn, tens of thousands of our soldiers will still be 
needed in Afghanistan, throughout the Middle East, in the Balkans, in 
the Horn of Africa, and everywhere else freedom is being challenged. 
Even if the war in Iraq ended tomorrow, our military would still be 
twice as busy as it was during the Cold War, confronting the inhumane 
and brutal threat of radical Islam and guarding against the rise of a 
hostile superpower elsewhere in the world.
  Let me put the matter I am discussing in the context of American 
history, the history of America at war, and the extent to which our 
Government has mobilized and our people have shared the sacrifice.
  During the Second World War, our Government raised taxes, and we 
spent as much as 30 percent of our gross domestic product to defeat 
fascism and nazism. During the war in Korea, we raised taxes again and 
spent 14 percent of our GDP on our military. During Vietnam, we raised 
taxes--again because we needed to--and we spent 9 percent of our GDP on 
the military. Today, in the midst of a war against a brutal and 
unconventional enemy, in a dangerous world, we have cut taxes and are 
spending less than 5 percent of our gross domestic product to support 
our military.
  We need to confront the reality that the defense of freedom is not 
cheap. Our soldiers know that, their families know that, but we as a 
society don't seem to know that. We are failing to pay the full price 
which it is our obligation as citizens of this great democracy to pay 
to protect our security and our liberty. In contrast to past wars, we 
are failing as a society to share in shouldering the cost of this war 
against Islamist extremists.
  In his 1942 State of the Union Address, just a few weeks after the 
deadly surprise attack on Pearl Harbor, President Franklin Roosevelt 
spoke to our Nation about the sacrifice demanded of a democracy that is 
sending its bravest into harm's way to defend our way of life, and I 
quote: ``War costs money,'' President Roosevelt said. ``That means 
taxes and bonds and bonds and taxes. In a word, it means an all-out war 
by individual effort and family effort in a united country.''
  We have a responsibility in this Congress in our time to give our 
troops the support they need in the world war we are engaged in against 
the terrorists

[[Page S3600]]

who attacked us on September 11--and attempt to do so again--and that 
means, and I quote Roosevelt again, ``an all-out war by individual 
effort and family effort in a united country.''
  Every American has a responsibility to share in the burden our 
soldiers are now carrying in defense of our freedom. We simply must pay 
the cost of this war more adequately and equitably than we are today. 
It is not an acceptable answer to push the sacrifice of this war 
against terrorism onto our children and grandchildren through deficit 
spending, as we have been doing. It is not an acceptable answer to pay 
the cost of this war by squeezing some important domestic programs, as 
we have been doing. It is a false choice, I would argue, to suggest we 
must skimp at home in order to protect our security abroad. We are a 
great nation, a great economy, and we are capable of doing both. That 
was the America of Franklin Roosevelt, the America of Harry Truman, the 
America of John F. Kennedy, and the America of Ronald Reagan, and that 
must be the America of today.
  Of course everyone in this Chamber supports our troops. Now it is 
time to translate that support into national policy. It is time to put 
our money where our mouth is. That is why I filed an amendment to enact 
a support-our- troops tax to help pay for the war against radical 
Islam. Because we are each threatened by this inhumane enemy, each of 
us should contribute a little more to guarantee its defeat and our 
survival.
  The support-our-troops tax I have introduced and envision would be a 
progressive increase for all Americans who pay income taxes. The 
revenues from this tax would only be able to be spent for our troops 
and the care of our veterans and must be on top of any other funds that 
would otherwise have been appropriated for them.
  My amendment today and the tax increase it proposes will not weaken 
our resilient economy, it will not deprive the American people of the 
many comforts they enjoy, but it will begin to restore a sense of 
shared service and sacrifice to our people and a sense of fiscal 
responsibility to our Government. It will begin to provide all that is 
required by our military to achieve victory in the long war in which we 
are engaged.
  We all prefer lower taxes, but we live in a time in history that 
requires more than what we prefer--a moment when we must appreciate 
what kind of Nation we are, the blessings of liberty we enjoy, and we 
must understand what we must do together to preserve the security and 
freedom we cherish.
  I have decided not to ask for a vote on this amendment tomorrow. In 
fact, I would say that I filed it as a plea, as an opening argument to 
my colleagues to join together in doing what is right and necessary to 
give our troops and veterans the support they deserve. My purpose is to 
begin a legislative effort that I hope will ultimately succeed in 
securing the additional revenues our troops and our veterans need.
  We will not solve this problem today, but we cannot afford to put it 
off much longer. It is imperative that this Congress address the need 
for a genuine national mobilization, a sharing of sacrifice in order to 
prevail in the long war we are fighting. Let us truly put meaning in 
the declaration that we, each and every American, support our troops as 
they put their lives at risk for us.
  I also will offer a second amendment I have introduced, and this one 
I have done with Senator Collins, the ranking member of our Homeland 
Security Committee. It would strengthen targeted areas of our homeland 
security effort. In this case, I will call up this amendment at the 
appropriate time and hope it is accepted by unanimous consent with the 
support of the chairman and ranking member of the Budget Committee. Let 
me take just a moment to explain what it does.
  The administration's budget proposal for fiscal year 2008 underfunds 
critical homeland security priorities, and while the committee 
resolution currently before the Senate is a major improvement over the 
President's request and returns key homeland security programs to their 
fiscal year 2007 funding levels--understand I am saying returns these 
programs to the levels they are funded at now, not increases them--I 
believe it still must be strengthened in two critical areas.
  This amendment I have introduced with Senator Collins would add an 
extra $731 million to this budget resolution for two specific grant 
programs.
  First, it would direct $400 million for grants to improve the 
capabilities of first responders to communicate with one another across 
jurisdictional and geographic lines. The remaining $331 million would 
go toward the Emergency Management Performance Grants Program that 
helps emergency managers throughout our country plan and prepare for 
disaster. We propose to pay for these investments with an across-the-
board budget cut to administrative accounts, thereby adding nothing to 
the budget deficit.
  More, not less, must be done to strengthen an all-hazards approach to 
homeland security to ensure we are prepared to respond to terrorist 
attacks like 9/11 as well as natural disasters like Katrina.
  Last week, in passing S. 4, the Improving America's Security Act, the 
Senate voted to authorize a $3.3 billion interoperability grant program 
over 5 years, beginning with $400 million in fiscal year 2008, next 
year. This amendment that Senator Collins and I are introducing would 
keep that promise by enabling the appropriation of that $400 million 
for the advancement of a system by which our first responders can 
communicate with each other with certainty in a time of disaster.
  Similarly, the Senate, in S. 4, last week substantially increased 
funding for the Emergency Management Performance Grants Program to help 
ensure that our States and localities are prepared for all hazards. I 
ask my colleagues to support this bipartisan amendment so we can 
fulfill the promise we made to our first responders and emergency 
planners when we passed S. 4 last week.
  Mr. President, this amendment strengthens targeted areas of our 
homeland security effort which were neglected by the budget proposal 
from the White House. And while the committee resolution currently on 
the floor is a major improvement over the President's inadequate 
request, and returns key programs to their fiscal year 2007 funding 
levels, I believe that it still must be strengthened in this critical 
area. My amendment would add an extra $731 million to this budget 
resolution for two specific grant programs for first responders and 
emergency managers that will help them plan, train, exercise, prepare 
for, and respond to catastrophic events. I propose to pay for these new 
investments with an across-the-board budget cut to administrative 
accounts, thereby adding nothing to the Federal deficit.
  Mr. President, September 11, 2001 changed our lives forever. We face 
new threats and must prepare accordingly. But the administration's 
budget proposal indicates it has turned its back on the lessons of 
September 11, 2001. And the Federal response to Hurricane Katrina and 
the subsequent mismanaged recovery proved for all to see that we are 
still a nation unprepared for catastrophe. More, not less, must be done 
to strengthen an all-hazards approach to ensure that we are prepared to 
respond to terrorist attacks as well as natural disasters. The 
President's budget request does not reflect that imperative, which is 
why I proposed to the Budget Committee chairman and ranking member an 
additional $3.4 billion above the President's proposal.
  Given the financial limitations before us, however, I have decided to 
offer this scaled-down amendment. Of the $731 million in additional 
spending I am proposing, $400 million would be for grants to improve 
the capabilities of first responders to communicate with one another 
across jurisdictional and geographic lines. The remaining $331 million 
would be directed toward the Emergency Management Performance Grants, 
EMPG, Program that helps emergency managers plan and prepare for 
disaster.
  We know our first responders don't have the training, equipment, and 
frequently the manpower they need to do their jobs properly. Most don't 
even have the basic capability to communicate with one another across 
jurisdictional and functional lines, and the response to Hurricane 
Katrina showed us that, sometimes during a major catastrophe, they 
can't communicate at all. Yet the President's budget continues a 4-year 
trend in cuts to first responders--a 40-percent reduction since

[[Page S3601]]

2004. And the President proposes nothing at all for fiscal year 2008 to 
promote interoperable communications specifically.
  Most of my colleagues in the Senate know that a sustained Federal 
commitment is needed to improve the ability of our first responders to 
communicate with one another in the face of disaster. Unfortunately, 
time and again, disasters occur, and police, firefighters, and 
emergency medical workers are unable to exchange information with each 
other. Lives are lost as a result.
  That is what happened on 9/11. The story of the communication 
breakdown among New York City's first responders is well known. And it 
is well known because it cost the lives of some of the bravest 
Americans who rushed to the aid of their fellow citizens. But it 
occurred at each of the 9/11 disaster sites.
  Then came Katrina. The storm decimated communications infrastructure 
throughout Mississippi and Louisiana, and once again, difficulties in 
communicating among officials and first responders significantly 
impeded rescue and relief efforts.
  Like many of the homeland security challenges we face, achieving 
nationwide operability and interoperability will require significant 
resources. While we don't know the exact price tag, we do know the 
costs will be significant, which is why we created a dedicated 
interoperability grant program for first responders in S. 4--the 
Senate-passed 9/11 Commission recommendation implementation bill, also 
known as the Improving America's Security Act of 2007.
  That legislation authorizes $3.3 billion over 5 years beginning with 
$400 million in fiscal year 2008. The amendment I am introducing would 
match this amount in the budget resolution before us today.
  Secondly, the EMPG Program is a long-standing and effective program 
whose cost is shared equally between Federal and State governments. 
EMPG grants are an essential building block in preparing for disasters 
of all types. They support critical functions such as the planning, 
training, and exercising that undergird almost all other preparedness 
efforts, whether for natural disasters or acts of terrorism. EMPG 
grants are therefore a distinct and important complement to those 
homeland security grants focused primarily on preventing, preparing for 
and responding to terrorism.
  By enabling States to create better plans, EMPG grants also help 
ensure that the other money provided by the Federal Government is spent 
more effectively.
  The former head of the National Emergency Management Association, who 
also is the Director of Emergency Management for the State of Alabama, 
testified before the Homeland Security and Governmental Affairs 
Committee that having EMPG funds available for planning actually saves 
money for States, localities, and the Federal Government. For example, 
in one county in Alabama, where EMPG funds were used to develop a 
debris removal plan, the county was able to cut the cost in half of 
having debris removed after a disaster compared to other counties that 
did not have similar plans. If you spread those savings over millions 
of cubic feet of debris, the savings--of costs that would have 
otherwise been reimbursed by the Federal Government--really add up. In 
other words, the more we plan, the more efficiently we can utilize the 
funding that is available.
  Again, like the interoperability grants, the Senate has already 
recognized the importance of the EMPG Program in S. 4, which 
substantially increases the authorized funding for EMPG to help ensure 
that our States and localities are prepared for all hazards. We should 
begin to fulfill the promise of S. 4 here.
  Mr. President, we must learn the dual lessons of September 11, 2001, 
when terrorists attacked us on our shores killing 3,000 innocent 
civilians, and August 29, 2005, when a predicted and catastrophic 
hurricane leveled much of the gulf coast, causing 1,300 deaths, 
billions of dollars worth of damage, and untold amounts of grief.
  Our enemies are ruthless and choose their own battlefields, and 
nature will strike in unpredictable ways, year after year. Yet many of 
our Nation's security gaps remain wide open. There is no cheap way to 
be better prepared.
  I urge my colleagues to support this amendment so that we can fulfill 
the promise we made to our first responders and emergency planners when 
we passed S. 4 last week.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. CHAMBLISS. Mr. President, I ask unanimous consent that following 
Senator Casey, I be allowed to speak for up to 10 minutes, that I be 
followed by Senator Isakson for up to 10 minutes, and Senator Gregg for 
up to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, I rise tonight to speak about an amendment 
that I believe will pave the way to expand quality preschool education 
for our Nation's children. I believe, as so many people in this Senate 
believe, that we must invest in our children in the dawn of their 
lives, as Hubert Humphrey said many years ago. The reason we must do 
that is, if we don't invest in them in the dawn of their lives, we 
can't expect them to be healthy, we can't expect them to learn and to 
grow and to have all the benefits that we hope any of our children 
would have as they move into school and begin to move into the future 
together.
  I thank Senator Conrad for the work he has done on this budget 
resolution and allowing us the ability to offer amendments like this. 
In particular, on this subject matter both Senator Kennedy and Senator 
Dodd not only have done great work over many years, but in particular 
this year, and their staffs have helped on this issue as well. I 
appreciate that.
  My amendment is simple. It creates a deficit-neutral reserve fund for 
expanding preschool education to children of low-income families. It is 
my hope the Congress can come together in a bipartisan way on 
legislation to expand access to preschool education for children, 
especially children of low-income families--but it would not be so 
limited. We could also cover children of lower and middle-income 
families as well.
  Mr. President, you know well--you have spoken about this--we already 
have two great programs that help our children among several but two 
that I will mention tonight. We have Head Start and the Child Care 
Development Block Grant Program. These are programs that we know work. 
They deliver results for those children and for our country. So I 
believe both Head Start and the Child Care Development Block Grant 
Program are good investments for those children, for their families, 
and for our future. I believe Head Start and the Child Care Development 
Block Grant Program should receive the funding they need from Congress 
this year in this budget.
  At the same time, I also believe a preschool program for early 
learning that I speak of tonight will complement and add to and enhance 
the ability of these other programs to help our children. I also 
believe that by setting up a deficit-neutral reserve fund, this 
amendment will eventually require offsets. But I also think when we do 
that we are speaking not just of a program that should work but a 
program that will be fiscally responsible and maintain fiscal 
discipline.
  I want to make sure that in this amendment, in this budget process we 
are engaged in right now, that we leave flexibility for the Health, 
Education, Labor and Pensions Committee and the Senate itself to create 
a preschool assistance program for the States. I believe this amendment 
does that. I hope this flexibility will allow us to work across the 
aisle in a bipartisan fashion on the parameters of this program and its 
eventual costs.
  Early childhood education has been a priority of mine for many years 
and had been a priority of mine in State government as the auditor 
general and State treasurer of Pennsylvania. In the Senate it will 
continue to be a top priority for me. I have been a strong advocate for 
improving the quality and safety of childcare in my home State of 
Pennsylvania, and I will continue to do that in the Senate.
  We know this: study after study shows that investments in pre-K are 
not just good for that child and not just good for that child's family 
but, of course, for the State in which they live and for our whole 
country. We hear a

[[Page S3602]]

lot of talk in this Chamber about growing the economy, making sure 
people have the ability to be entrepreneurs, to invest and to grow and 
to make money and to build our economy. That is great and we all 
support that. But if we really are serious about growing the economy of 
America today and into the future, I believe we must invest in our 
children. We know these programs pay dividends for our children and for 
our future.
  I believe the Bush administration should not only put together the 
right kind of budget--and I have been critical of many aspects of the 
President's proposal--but I think the administration should increase 
funds for Head Start, not cut them. It should increase funds for the 
Child Care Development Block Grant Program, and at the same time we 
must help our States in their efforts to establish quality 
prekindergarten education programs so that all children, no matter what 
their background, can enter school ready to learn.
  Investments in our children and early childhood education should be a 
top national priority, something that should have bipartisan support. I 
believe it will and it does. By working to make sure that every child 
is ready to learn when they enter school and by nurturing our children 
during their early years, we make an investment that pays dividends to 
the child and for the country.
  I urge all my colleagues to support this amendment.
  Mr. BYRD. Mr. President, I am concerned about the use of the so-
called function 920 account to offset amendments to the budget 
resolution.
  The budget resolution sets the aggregate level of discretionary 
spending for the coming fiscal year. Within that maximum level of 
discretionary spending, the budget resolution displays certain 
nonbinding levels of discretionary spending that are divided between 20 
major functions, including function 050 for defense, function 150 for 
international affairs, function 400 for transportation, function 550 
for health, and so on. Function 920 is a kind of catch-all account, 
which displays the budget effects from initiatives that cannot be 
easily categorized into the other budget functions, such as an across-
the-board spending cut.
  When a Senator offers an amendment to increase spending in one 
discretionary account, such as function 400 for transportation or 
function 550 for health, and then directs the Appropriations Committee 
to find unspecified savings in the function 920 account, it creates an 
expectation for increased resources when none are produced. Such 
amendments do not increase the maximum level of discretionary spending 
allowed by the budget resolution falsely raise expectations that more 
money is available for certain spending programs. In reality, this is a 
shell game amounting to shifting funds around without any actual 
consequence.
  Function 920 has a legitimate accounting purpose. That purpose, 
however, is not to create the illusion of progress for public 
consumption and a press release.
  Mr. ROCKEFELLER. Mr. President, amendment No. 591 would create a 
deficit neutral reserve fund and would allow for legislative action by 
the Finance Committee to improve the child support enforcement system 
as long as the costs were offset.
  The child support program has collected more than $23 billion for 17 
million children participating in the program. The Congressional 
Research Service found that this program is one of the most important 
safety net programs reducing poverty rates for working families.
  Unfortunately the Deficit Reduction Act, DRA, made deep cuts in this 
enforcement funding. A preliminary estimate by the Congressional Budget 
Office indicates that $11 billion in child support payments will go 
uncollected over the next 10 years, even if States backfill half of the 
lost Federal funds.
  Child support payments allowed more than 300,000 families to close 
their Temporary Assistance to Needy Families cases in 2004. Families go 
on welfare less often and leave sooner when they receive reliable 
support payments. In addition, Federal costs for Medicaid, food stamps, 
and other means-tested programs decrease when both parents support 
their children.
  The child support program collected $4.58 in private dollars for 
every $1 spent by Federal, State, and county governments. The Office of 
Management and Budget rated the child support program as one of the 
most effective government programs.
  As States implement the cuts in the DRA, fewer children will receive 
reliable support from their parents. States and counties will collect 
support less consistently and it will take longer to establish 
paternity and support orders. Employer outreach initiatives will be 
curtailed. Domestic violence services and initiatives to help low-
income fathers work and stay involved with their children will be 
reduced or eliminated. Interstate enforcement will be less dependable.
  As program resources are reduced, a State's ability to meet Federal 
performance measures will deteriorate. A downward spiral in performance 
will further decrease State program funds and increase penalty risks. 
Counties in particular rely on performance incentive funding to 
operate. The performance gap will widen between States and counties 
able to backfill funds and those that cannot.
  Mr. CRAIG. Mr. President, I have sought recognition to comment on 
veterans funding in this budget resolution. The Democrats have put 
forward a resolution that proposes to increase veterans discretionary 
spending by 18 percent--this is on top of a 12 percent increase that 
was included in last month's joint funding resolution. I have also 
heard that billions more will be proposed for veterans in the war 
supplemental.
  Spending proposals of this magnitude in any area of Government should 
rightfully raise a few eyebrows and be met with a healthy level of 
scrutiny. Veterans programs are no exception. Taxpayers will continue 
to support higher veterans expenditures only to the extent we can 
assure them that those expenditures are absolutely necessary, will not 
be wastefully spent, and will meet our highest priorities. The Budget 
Committee chairman stated as much in his opening remarks on Tuesday.
  Let me be clear. I am absolutely committed to providing the highest 
quality of care to our veterans. I have supported a 70 percent increase 
in VA medical care since President Bush took office. I have spoken 
frequently about not sparing any expense when it comes to getting the 
highest quality of care to our Iraq and Afghanistan veterans and 
veterans with disabilities. I have even introduced legislation that 
allows all veterans with service-connected disabilities to seek care 
outside of the VA system if that is what they prefer.
  But what I see in this resolution is an effort to use the legitimate 
needs of our war wounded as a pretext to support funding increases that 
are beyond reason and that actually may harm the care provided to the 
veterans who are our No. 1 priority.
  Let me point out a couple of areas where I think this budget fails 
our highest priority veterans and taxpayers.
  The Democrats' budget proposes an extra $1.1 billion to allow new 
``Priority 8'' veterans to enroll for VA health care. Now who are these 
Priority 8 veterans? Priority 8 veterans are veterans with no service-
connected disabilities and higher incomes. They were granted 
comprehensive access to VA health care back in 1996 at a time when we 
thought their care could be provided on a budget-neutral basis. We were 
wrong. Priority 8 veterans then enrolled in such large numbers that 
quality and timely health care to VA's service-disabled and indigent 
patients began to be compromised.
  In January 2003, Secretary Principi used authority granted to him by 
Congress to suspend new enrollment of Priority 8 veterans. His 
rationale was simple:
  VA is maintaining its focus on the health care needs of its core 
group of veterans--those with service-connected disabilities, the 
indigent and those with special health care needs.
  Taking the action he did on the eve of the war in Iraq was the right 
thing to do. He rightly instituted a policy that focused our limited 
resources on those for whom VA was established--our war injured and 
veterans who need VA the most.
  All I have been hearing from the Democrats for the last 2 years is 
how we must not make our OIF/OEF veterans wait in lines for mental 
health

[[Page S3603]]

care, TBI treatment, or other specialty care. I agree! That is why 
their proposal puzzles me. At a time of war, when we're trying to get 
quicker access to VA care for our OIF/OEF and service-disabled 
veterans, how does allowing an increase in the patient load help 
matters? Where is the sense of priority here? It is like we are trying 
to keep a ship afloat by pouring tons of water onto the deck. It 
doesn't make sense.
  For those who think that simply providing more money permits VA to 
automatically increase its capacity to see new patients, think again. 
It takes time to hire quality medical personnel. It takes time to find 
space to accommodate additional medical appointments and patients. 
Since 2003 VA has been able to improve the amount of time it takes to 
schedule primary and specialty care appointments so that more than 94 
percent of such appointments are scheduled within 30 days of the 
veteran's desired date. Why would we risk longer waiting times for our 
OIF/OEF veterans and service-disabled veterans?
  Furthermore, is this new spending fiscally prudent at a time when VA 
budgets have been growing at double-digit rates? There are 24 million 
veterans in the United States; only 5.3 million use VA health care now. 
Have the longterm cost implications of opening the system to all 
veterans been considered in this budget? Have we contemplated the 
multibillion dollar unfunded liability we are creating here if millions 
more Priority 8 veterans show up for free care?
  Let me move on to another area that concerns me.
  The chairman of the Budget Committee made it a point to show how his 
budget meets or exceeds the recommendations of the independent budget. 
That is all well and good, but when the IB is used to set budget policy 
for the Congress, then a fair evaluation of the budget numbers is in 
order. Let's look at one account in particular--general operating 
expenses. The Budget Committee chairman quite proudly stated that his 
budget meets the IB recommendation of $2.23 billion for this account.
  The largest portion of this account funds the administration of VA's 
benefits programs, to include its backlogged claims processing system. 
The administration has submitted a proposal that would provide VBA with 
the highest number of claims processors in its history. In fact, the 
President's budget will result in what will have been a 61 percent 
increase in claims processing staff since 1997. While I support the 
President's budget, it is time we tried a new approach to fixing the 
backlog of disability claims. Simply providing more and more money to 
fix the problem does not solve the problem.

  What do we have with the Democrats' budget? On top of the President's 
record increase, the IB recommends an extra $700 million: roughly $100 
million for new information technology spending, and $600 million for 
additional staff. According to unofficial VA estimates, 600 million 
would buy over 10,000 VBA employees, almost double the size of the 
existing bureaucracy? VA cannot accommodate a staffing influx of this 
size in 1 year. It would have to lease hundreds of thousands of square 
feet and additional facilities all over the country. More money would 
be needed for communication services, utilities, personal computers and 
IT support staff.
  Is this rational? Have the long-term costs been factored in? Was VA's 
ability to provide space for these employees factored in? Does the 
incoming workload command a bureaucracy of that enormous size? As 
ranking member of the Veterans' Affairs Committee, I have not seen any 
data to substantiate a request of that magnitude. I have even asked the 
authors of the IB to justify the number, but have yet to receive a 
response.
  We are not talking about chump change here. If an error was made by 
the IB, and I suspect one was, then we should fix it before it is 
perpetuated.
  Let me conclude with this final observation. VA has been criticized 
in recent years for its very public budget gaffes. The General 
Accountability Office rightly condemned VA for ``errors in estimation'' 
and ``inaccurate assumptions'' that led to the VA funding shortfall of 
2005. I would caution my colleagues that we, in this budget resolution, 
may be repeating those same mistakes by providing money that VA could 
not prudently spend. It may be politically expedient to reflexively 
throw more money at problems. But let's also not forget about our 
obligations to the American taxpayer.

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