May 9, 2001 Mr. SARBANES. There is a subheading called "The Farce is With Us." It was, if you believe the official story, a case of farce majeure: House Republican leaders had to call off Thursday's planned vote on the budget resolution because two pages that were supposed to be in the document were accidentally omitted. ..... Whatever really happened, the fundamental cause of the mishap was that the Republican leadership was trying to pull a fast one--to rush through a huge tax cut before anyone had a chance to look at the details. Krugman, in this column, goes on to talk about, in effect, other missing pages in the budget document. Now we have had a little chance to look at the details, and I want to ask the ranking member, my good friend from North Dakota, a couple of questions. First, on defense, am I correct in understanding that the way this document is drawn, there is a blank check for a defense figure that will be filled in later? Is there a defense number coming later that will simply be slugged into the budget? Mr. CONRAD. The Senator is correct. This is a budget with many missing pieces. Not only do we have missing pages, we have missing numbers. The defense buildup that the administration will ask for next week, after we finish with the budget, will ask for a massive defense buildup. So they have created a special reserve fund with a black hole in this budget that says whatever they decide later--whatever the President recommends--they can stick into this budget. They will not have a vote on it. We will sort of have a vote, we will vote now, before we know what the number is. Mr. SARBANES. What does this budget do about education? We are voting on education this week, the President says we will not leave any child behind, and everyone is making terrific speeches about education and beating on their chests about education. But to do a lot of these programs, we need resources. What does the budget do on education? Mr. CONRAD. It is interesting, it is mostly speeches. All the speeches that were given, all the votes that were cast when we had the budget resolution on the floor, all the money added for education, all of it has been taken out. We are in the middle of a budget debate on the floor of the Senate, last week adding $150 billion. Meanwhile, we are passing a budget with no new money for education. The President said his top priority was education. The priority is every place but in the budget. There is no new money for education. Mr. SARBANES. Defense is a missing piece; education is a missing piece. And this tax cut will create a problem, as I understand it, with the alternative minimum tax. I am told that there is no provision in this budget for alternative minimum tax reform, and that such reform may cost as much as $300 billion over the 10-year-period; is that correct? Mr. CONRAD. Unfortunately, the Senator is correct. In fact, the alternative minimum tax that affects now 2 million Americans, if the President's plan is passed, will affect 35 million American taxpayers, nearly 1 out of every 4. Just to fix the part of the alternative minimum tax caused by the President's tax bill will cost nearly $300 billion. Mr. SARBANES. That $300 billion is not allowed for in the budget? Mr. CONRAD. That is a missing page. Mr. SARBANES. I am told that, while there is some adjustment for inflation in this budget, there is no adjustment for a growing population and the additional stress and strain that places on program levels; is that correct? There is no adjustment for population growth, which we know will happen? Mr. CONRAD. Not only is there no adjustment for population growth, in truth, there is not a full adjustment for inflation. This was done in the dark of the night in one of these closed rooms when none of us was able to be there. They actually took out another chunk of money, nearly $60 billion, so they don't even have an inflation-adjusted budget. Mr. SARBANES. Imagine that. It is incredible to come out with a fiscal program for the country with all these missing pages and vanished pieces. This conference report, which provides for this excessive tax cut, is premised on a projected surplus, two-thirds of which is in the last 5 years of the 10-year-period. And now we discover that there is no money for education, and the defense figure will rise by who knows how much? Clearly, it will rise. It will be slugged into this budget. We don't even provide for inflation, let alone a growing population, and there is no allowance for the alternative minimum tax fix. I ask my friend from North Dakota, given all these missing pages, won't this budget plan eat into the Medicare trust fund and the Social Security trust fund? I don't see any other way. Once all the pieces are put into place, are we not going to be eating into the trust funds? Mr. CONRAD. I think there is no question that is what will happen. There is no question that is why the budget has been presented the way it has. They don't want all the numbers put together in one place so we can add them up because it doesn't add up. They have been presented with a difficult problem. They have a budget that does not add up. How do you avoid making that obvious? You avoid making it obvious by not having all of the elements of the budget in the budget resolution. That is exactly what we have. It is kind of a phantom budget. There is the budget we have been presented with, and then there is the real budget. One of them doesn't add up. That is why they don't want to present it to the membership. Mr. SARBANES. It is absolutely irresponsible to be doing the budget this way. I think we are going to pay the price in the years to come. I thank my very able colleague for his constant effort to try to get the Budget Committee to come to grips with these problems.