April 4, 2001 Mr. CONRAD. Mr. President, we are in the midst of a debate on the budget resolution for the year. Contained in that is a proposal for 10 years because that is what the rules require of us. On our side, we have tried to lay out a series of principles that would form the basis of our budget proposal. Perhaps this is a useful time to review those fundamental principles that we have used to form a budget recommendation to our colleagues. First, we have said we should protect Social Security and Medicare trust funds in every year so those funds are not raided for another purpose. Second, we have adopted the policy of paying down the maximum amount of the publicly held debt. The publicly held debt, as we stand here today, is $3.4 trillion. We believe $2.9 trillion of that can be paid down without paying any premiums, without having any difficulty. Third, we provide for an immediate fiscal stimulus of $60 billion. Our proposal has been: Let's put in place that fiscal stimulus now. Let's not wait. Let's not delay. Let's not hold it hostage to the larger 10-year budget because this would be available in fiscal year 2001. We already have a budget for 2001. We know we have the money available to provide a fiscal stimulus now. We know we have $96 billion of surplus outside of the trust funds available this year in the budget that has already been passed to provide fiscal stimulus, to provide a little boost to this economy in the midst of the downturn we see occurring. We think that would be a wise policy to pursue. Then we can deal with the longer 10-year plan. But let's put in place right now a fiscal stimulus that would give lift to this economy. Fourth, we provide for significant tax relief for all Americans, including rate reduction, marriage penalty relief, and estate tax reform. We also reserve resources for the high-priority areas we have previously identified: improving education, strengthening our national defense, providing a meaningful prescription drug benefit, and funding for agriculture because of the crisis facing our farmers. Finally, we provide $750 billion to strengthen Social Security and address the long-term debt problem America sees just over the horizon. When this 10-year period ends, we all know that the baby boom generation starts to retire, and then we face real financial problems. We have, as I think all of us know, a circumstance in which we will face massive deficits as we look ahead. We have tried to be mindful of the fact that all of these budgets are based on a forecast, a 10-year forecast, a forecast that is highly uncertain. In fact, it is so uncertain that the forecasting agency warned us that it is very likely to be wrong. Our friends on the other side are betting that this entire projection over 10 years comes true, all $5.6 trillion of it. Let's reflect back on what the Congressional Budget Office told us. They are the ones that made the forecast, and they provided us with this chart, this analysis. They went back and looked over the variants in their previous forecasts. They said: If we apply the difference between what we projected and what actually occurred and we applied it to this forecast, this is what we see. In the fifth year of this 10-year forecast, they are telling us there could be anywhere from a $50 billion deficit to more than a $1 trillion surplus. That is in the fifth year alone. They say this notion that there is a $5.6 trillion pot of money at the end of 10 years has only a 10-percent chance of coming true, a 45-percent chance there will be less money, and a 45-percent chance there will be more money. That forecast was made weeks ago. Look at what has happened in the interval. The economy has continued to weaken. We have more announcements of job layoffs and further erosion in the financial markets. What would a prudent person bet? Would a prudent person bet we are going to have more money or would a prudent person bet maybe we are going to have less money in that forecast, that 10-year projection? A prudent person would say it is unlikely that all of this is going to come true and that we ought to fashion a fiscal policy that takes account of that uncertainty. That is precisely what a number of very distinguished Americans said this morning in the Washington Post. In an article entitled "On Taxes, One Step at a Time," former Senator Warren Rudman, Republican Senator from New Hampshire, one of our most distinguished colleagues, former Senator Sam Nunn, Democrat of Georgia, again, one of our most distinguished former colleagues, who are now cochairmen of the Concord Coalition, and three fellow officials of that organization, including former Secretary of the Treasury Robert Rubin, former Federal Reserve Chairman Paul Volcker, and former Secretary of Commerce in the Nixon administration, Pete Peterson, said: ".....great care must be taken to ensure that any tax cut medicine treats the short-term economic symptoms without adversely affecting the long-term prognosis. We believe an immediate fiscal stimulus can be provided independently of the proposed 10-year tax cut. " That is exactly what we have proposed on this side. Let's take immediate action on fiscal stimulus and then independently address the 10-year plan. When we address it, they advise us: Any additional tax cuts should be limited to account for the enormous uncertainty of long-term budget projections and the huge unfunded obligations of Social Security and Medicare. They are exactly right. We ought to be very cautious when we talk about not only the 10-year numbers but when we talk about what is going to happen right when we get past this 10-year period. This chart shows Social Security and Medicare trust funds face cash deficits as the baby boomers retire. What this shows is that we are in surplus going out until the year 2016. Then Social Security and Medicare start running cash deficits in that year. In other words, these surpluses we enjoy now are going to turn to deficits. They aren't just going to be piddly deficits. They are not going to be little itty-bitty deficits. They are going to be huge deficits. Because when the baby boomers start to retire, the number of people eligible for Medicare and Social Security double very quickly. Then we can see what happens. We see this surplus picture change dramatically. We start running massive deficits. That is why we have said on our side, having a tax cut as large as the President proposes, that uses up all of the non-trust-fund money in this period, digs the hole deeper before we start filling it in. I will show what I mean by that. This is our analysis of the Bush budget proposal. We have the $5.6 trillion of forecasted surplus. But $2.6 trillion of that, according to the President's calculations, are Social Security trust fund money; $500 billion is Medicare trust fund money. That leaves an available surplus of $2.5 trillion. That doesn't count a third set of trust funds we have. That is another $500 billion. Those are the trust funds of civil service retirement, military retirement, airport trust funds, highway trust fund. I yield myself an additional 10 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. CONRAD. If the Chair would inform me when I have used 8 minutes, I would appreciate that. I appreciate the courtesy of the Presiding Officer. As I have indicated, if we just take out the Social Security trust fund and the Medicare trust fund, we are down to $2.5 trillion. That doesn't count the other trust funds. That doesn't count the airport trust fund, the highway trust fund, the military retirement trust fund, or the civil service retirement trust fund. That is another $500 billion. If we counted that, we would be down $2 trillion. Then let's look at the President's tax plan. He has a tax cut advertised at $1.6 trillion--not billion, not million, trillion, $1.6 trillion--a huge amount of money. We know from the reestimates that have been done on just part of his plan that it costs more than $1.6 trillion. We know from the reestimates that have been done on just part of the plan with the House of Representatives, it is at least $1.7 trillion. Then, of course, you have other costs--things that will be necessary to fix because of the President's plan. The alternative minimum tax is perhaps the most significant. The alternative minimum tax now affects about 2 million American taxpayers. But we have been advised by the Joint Committee on Taxation that if the Bush plan passes, more than 30 million taxpayers will be caught up in the alternative minimum tax. That is almost one in every four taxpayers in America. Boy, are they in for a big surprise. They thought they were getting a tax cut. Instead, they are going to find they are caught up in the alternative minimum tax. That was something designed years ago to prevent wealthy people from paying no taxes. We are going to find a quarter of the American people caught up in it because of the changes the Bush tax cut plan makes that are going to push more and more Americans into the alternative minimum tax. These aren't wealthy people. Some will be, but many will be middle-class people. Tens of millions of people will be pushed into the alternative minimum tax. That was never the intention of anyone, but that is what is going to happen under the Bush plan. And it costs $300 billion to fix, according to the Joint Committee on Taxation. So you have the Bush tax cut at $1.7 trillion. You have $300 billion to fix the alternative minimum tax, which is made more necessary by the Bush plan. You have the interest costs associated with the first two of $500 billion. You spend money and provide tax cuts. That includes the interest costs to the Federal Government because the money is not being used to pay down debt. So the interest cost is higher than it would be otherwise. That is another $500 billion. Then we have the Bush spending proposals over the baseline that forms the foundation for this 10-year forecast. That is another $200 billion, for a total of $2.7 trillion. Remember, if we safeguard the Social Security trust fund and the Medicare trust fund, we only have $2.5 trillion available. We will have $2.5 trillion available if we subtract out the Social Security and Medicare trust funds. Of course, as I indicated, if we take out the other trust funds of the Federal Government, that is another $500 billion. So one can readily see that the cost of the Bush budget plan far exceeds the available resources outside of the trust funds. What does that mean? That means very simply that we are going to be invading the trust funds of Medicare and Social Security under the Bush plan, and they won't say it, but the numbers don't lie: There is no other way to add this up and make it work. We already see what is happening out here on the floor of the Senate day after day, as they present amendments to try to fix what is wrong in the Bush budget plan. Yesterday, Senator GRASSLEY of Iowa offered an amendment to add $150 billion for prescription drugs because the President's plan is insufficient. It doesn't have enough money to provide a prescription drug benefit to the American people. So they offered an amendment to put back $150 billion. Today, Senator GRASSLEY offered another amendment to more fully fund agriculture, and they add back another $100 billion. If you go out and look, year by year, at their budget and you look at the results of these amendments they have passed and you look at the money that is available, what you find is, sure enough, they are raiding Medicare already. In the year 2005, they are going to take $15 billion from the Medicare trust fund. In the year 2006, they are going to take $13 billion. In the year 2007, they are going to take $10 billion. In the year 2008, they are going to take $4 billion more, for a total of $42 billion from the Medicare trust fund. Some may be watching and wondering: well, what difference does that make? The difference it makes is that it means Medicare goes broke faster. That means Medicare is out of money more quickly. And already Medicare is the most endangered of the Federal programs. We all know Social Security is in trouble. Medicare is in even more trouble. If you start tapping it to fund other things, guess what. It is in trouble even more quickly. Mr. President, those are just some of the things I think need to be known before people vote on this budget. It is critically important that we make wise choices, that we make choices that add up, that we make choices that reflect the values of the American people. I hope very much before this debate concludes that we will somehow manage to find a way to change this plan so that it does add up; so that it doesn't raid the trust funds; so that we can provide significant tax relief to the American people but do it in the context of paying down the publicly held debt as quickly as possible and also funding the priorities of the American people, including improving education and providing a prescription drug benefit. (Ms. CANTWELL assumed the chair.) Mr. CONRAD. Madam President, we have a circumstance in which we fund those priorities of improving education, providing a meaningful prescription drug benefit, strengthening our national defense, and also set aside some money to deal with this longer term problem. Our friends on the other side of the aisle haven't provided a nickel to deal with this long-term debt crisis that is coming our way. They haven't provided a dime for that purpose. We have set aside $750 billion to deal with this long-term budget circumstance, this long-term budget challenge of the baby boomers starting to retire and, when they do, us not having sufficient resources to keep the promise that has been made. Madam President, I will end on this note as I notice other colleagues have arrived. The fundamental difference between the Democrat budget plan and the Republican budget plan can be summed up on this chart of short- and long-term debt reduction. Of the projected $5.6 trillion that is available if this budget forecast comes through, we reserve $3.65 trillion for short- and long-term debt reduction. President Bush's plan reserves $2 trillion. So while he has a bigger tax cut--about twice as big as what we propose--we have about twice as much money for short-term and long-term debt reduction. That is the fundamental difference between these two plans. It is up to people to decide what they think is the wiser course. We believe, given the uncertainty of these financial projections, given the magnitude of our current debt and the debt that is coming our way when the baby boomers start to retire, it is much wiser to put more of this money aside for short- and long-term debt reduction than to put it aside for a big tax cut. Those are the differences. Our tax cut would still permit rate reductions. Our tax cut would permit reforming the estate tax, and addressing the marriage penalty, and an immediate fiscal stimulus of $60 billion. But beyond that, we think the money is better put to paying down the short-term and long-term debt. Madam President, I yield the floor.