April 2, 2001 Mr. CONRAD. Mr. President, the Senator from Texas began by saying I was a good advocate but I was playing a weak hand. I say to him, he is an outstanding advocate. I do not agree with him. I think his prescription for America really is not the priorities of the American people. Most of all, I always enjoy listening to him, but I must say, the words he speaks bears almost no relationship to the facts and certainly no relationship to the budget I have offered. What I find most enjoyable is that the Senator from Texas has been giving this same speech for 20 years, and it does not matter if the facts have changed completely, he sticks with his speech. So I applaud him for his consistency. When he says this is a question of more and bigger Government or smaller Government, that is not what this is about. No, no, no. That is the old debate. That is the old, tired debate, but that is not what this budget resolution is about. The budget resolution I have offered today would shrink the role of Government and would dedicate more of the money to debt reduction. The truth is, the fundamental difference between our budget proposals is we have dedicated about 70 percent of this projected surplus to short-term and long-term debt reduction. The President's plan devotes about 35 percent to short-term and long-term debt reduction. That is the big difference. They have a much bigger tax cut. We have much more money for short-term and long-term debt reduction. That is the real difference. When the Senator from Texas says there has just been this explosion of Federal spending, come on. We know better than that. That is not what has been happening. There has not been any big explosion of Federal spending. Let us deal with the facts. This is what has happened to Federal spending from 1962 to 2002. This is what has happened to Federal spending as a share of our gross domestic product, which is the best way to compare so we are not just looking at inflated dollars. We see that the Federal spending is now at the lowest level since 1966. We are down to 18 percent of gross domestic product being consumed by the Federal Government. Of course, where does most of the money go? Most of the money goes for Social Security, direct payments to the American people; Medicare, direct payment of the health bills of the American people; interest on the debt, the debt of the American people. Another big expenditure this year is paying down the debt, the debt of the American people. The President has said very often, this is the people's money; we ought to give it back to the people. First of all, I agree with the first part of his formulation. This money is the people's money. Absolutely. We should give some of it back to the American people. Absolutely. But this debt is the debt of the American people. Social Security goes to the American people. Medicare goes to the American people. National defense is for the American people. A prescription drug benefit goes to the American people. Improving education is the education of the American people. All of these are the people's needs and the people's priorities. This is not a case where the money goes to the Government, the Government sticks it in a sock somewhere. This is a question of how we best use our resources to provide a significant tax cut to protect Social Security and Medicare, to improve education and defense, and the rest. When the Senator from Texas says we have been on a spending binge, it is just not true. As I indicated, we have been seeing the Federal Government spending share come down each and every year since 1992. We were at 22 percent of gross domestic product in 1992; we will be at 18 percent of gross domestic product this year. The Federal share of the national income has been going down steadily. Under the Democrat alternative that we have offered and are proposing to our colleagues, we continue to bring down the share of the Federal income going to the Federal Government. We continue to shrink the size of the Federal Government from 18 percent of gross domestic product to 16.4 percent at the end of this period, the smallest part of national income going to the Federal Government since 1951. This dog won't hunt. This tired old debate that it is tax cuts versus spending and those are the only options--those are not the only options. Those are false choices for the American people. The truth is, the choices are more complicated than that. It is not just a question of spending or tax cuts; it is a question of spending or tax cuts or debt reduction, short term and long term. On our side, we have said the highest priority is additional debt reduction. Why? Because we know where we are headed when the baby boomers start to retire and this long-term debt takes off like a scalded cat. It is interesting; the Republicans claim that this is just a question of our spending versus their spending. Under their plan, they may well be spending more money next year than our plan provides. Our plan provides a 5-percent increase in overall spending next year. The Republican plan may be as little as 4.9 percent, slightly less than ours, but if they use their contingency fund they have set aside, they could have as much as a 10-percent increase in Federal spending. Our Republican friends are trying to have it both ways. They are claiming they are against spending. Yet they have created a contingency. By the way, you have to wonder where else it will be used because the President has said very clearly, his tax cut is $1.6 trillion and no bigger. He has said he will pay down $2 trillion of national debt and no more. Yet they have established a contingency fund. If it is not going to go for a tax cut, if it is not going to go for paying down more debt, the only place it can go is more spending, in which case our friends on the other side of the aisle have more spending than we do. What a surprise. This is the same old shell game they have engaged in for years, to try to suggest this is a question of tax cuts versus spending. That is not the choice. We are saying, devote most of these resources, 70 percent of this projected surplus, to paying down short-term and long-term debt. We are dedicating nearly twice as much to that--$1.8 trillion more--to paying down short-term and long-term debt. They are dedicating more to a tax cut. That is the fundamental choice. It is not a choice of spending versus tax cut; it is a choice of tax cut versus paying down the debt. That is the fundamental choice before the American people in the budget resolution we offer versus the budget resolution they offer. There are other choices as well. We have provided $750 billion to start to address our long-term debt that will be created by the retirement of the baby boom generation. We have put aside $750 billion to strengthen Social Security. They have a big goose egg for that purpose; they have nothing. We talk about who is being fiscally responsible. I will vote for our side. I am happy to take our budget and defend it anywhere because we have devoted twice as much money to short-term and long-term debt reduction as the other side. Now my colleague from Texas says: The Democrats didn't support the Social Security/Medicare lockbox we proposed last year or in 1999. No, we didn't support their lockbox. Certainly, we did not. It was a leaky lockbox. It didn't lock up anything. In fact, the Treasury Secretary said it endangered our ability to pay the debt of the United States. That was the lockbox they offered. The lockbox we voted for, to protect Social Security and Medicare, was a lockbox I offered on the floor of this Senate last year. It got 60 votes, including, I think, 14 Republicans. When the Senator suggests Democrats didn't support protection for Social Security and Medicare, it is just false. He knows it is false. He knows it is absolutely false. We supported protection for Social Security and Medicare, and it is the proposal that passed here with the highest number of votes in the Senate, 60 votes. The Senator from Texas says: They didn't vote for my constitutional amendment to balance the budget. He is exactly right; we didn't vote for his constitutional amendment to balance the budget because it defined ``balancing the budget'' as one that looted the Social Security trust fund to achieve balance. He is darn right we didn't vote for that. We have been able to balance the budget subsequent to that without raiding the Social Security trust fund. Who is right and who is wrong about that dispute? He came out here with a constitutional amendment and said we had to pass it; it was the only way to balance the budget, and he defined ``balancing the budget'' as raiding the Social Security trust fund to achieve balance. What a fraud. What an absolute fraud that would be for balancing the budget. No, we didn't vote for it. We voted against it because we wanted to balance the budget without counting Social Security. That was the right thing to do. The Senator from Texas said we increased spending last year by $561 billion. No, we didn't. There was no $560 billion increase in spending last year. Let's go back to the record. Here is what has happened with spending. As a share of the economy, Federal spending has gone down each and every year, including last year. Under the plan we are proposing, it will continue to go down as a share of our national income, as a percentage of our gross domestic production. That is the way economists say is the best way to measure changes in spending over time because that is adjusting for inflation. The Senator from Texas says this is a question of more Government or more opportunity. Those are not the choices before us. That is a good speech line, but it has almost no relevance to the choices before us in this budget resolution. The fact is before us are a series of choices, not just one or the other; it is a series of choices. The first choice is do we reduce the size of the President's proposed tax cut in order to have more short-term and long-term debt reduction? We say yes. We say we ought to reduce the size of his tax cut so we have more short-term and long-term debt reduction. We also say we ought to reduce the size of his tax cut to set aside money to strengthen Social Security for the long term. We also believe we ought to reduce the size of his tax cut to improve education and to provide a prescription drug benefit and to strengthen national defense because those are also priorities of the American people. But we only endorse those spending initiatives in the context of maximum paydown of our publicly held debt, of putting aside money to deal with our long-term liabilities, and also within the context of continuing to shrink the role of the Federal Government. Let's go back to that chart that shows, under the plan we are proposing, we would continue to shrink the role of the Federal Government from 18 percent of gross domestic product today, down to 16.4 percent at the end of this period, the lowest level since 1951. That is the lowest level in 50 years. The Senator from Texas also said we are paying down all the debt we can pay down. No we are not. That is not true. We had very clear testimony before the committee on how much debt can be paid down. I thought the most compelling testimony was by the man who has managed the successful debt paydown of the previous administration. The President is saying we can only pay down $2 trillion of the publicly held debt over this period. That is not the case. We have $2.6 trillion of debt coming due during this period. We can certainly pay down all of that. If we reserve all the Social Security and Medicare trust funds, and those moneys are used to pay down publicly held debt, we have no cash buildup problem until the year 2010. That is what a detailed cashflow analysis demonstrates. It is a red herring to suggest we are going to have to pay these big premiums to foreign bondholders. That is all nonsense. We are not going to have to pay any big premiums to anybody. We are just going to retire the debt of the United States as it comes due, not renew it, not issue new debt. They want to issue new debt to pay for their tax cut. We do not. We think we ought to dump this debt while we have the chance because we know what happens when you get past this 10-year period and the debt of the United States takes off like a scalded cat. This is a fundamental choice. The thing the Senator from Texas and I do agree on is that this debate is important. It is going to shape the economic future of our country. I say to those who are listening, the President's plan is fatally flawed. The President's plan is fatally flawed because he uses virtually all of the non-trust-fund money for his tax cut. In fact, here is the projected surplus: $5.6 trillion, as uncertain as it is. If you take out the Social Security trust fund, $2.6 trillion. Then you take out the Medicare trust fund, $500 billion. That leaves you with an available surplus of $2.5 trillion. Then the President proposes a tax cut of $1.7 trillion. His tax cut plan requires additional adjustments in what is called the alternative minimum tax. Today there are 2 million people affected by the alternative minimum tax, but if we pass the President's plan, 30 million are going to get caught up in the alternative minimum tax. It costs $300 billion to fix that problem. The interest costs associated with the first two are $500 billion, the President's spending initiatives over the so-called baseline are $200 billion, for a total cost of his plan of $2.7 trillion--when there is only $2.5 trillion available, if you safeguard the Social Security and Medicare trust funds. The numbers do not add up. The President's plan is $200 billion in the hole and that is before any defense initiative that he might propose, that is before any of the other things that may be suggested by this administration in terms of additional tax cuts, as we have seen come over from the House--$300 billion over and above what the President has proposed; and before additional funds for education or a prescription drug benefit. That is before any adjustment in the forecast because of the economic downturn. We have a President's budget that is eating into the trust funds already and it is headed for much worse. Many of us believe it would be a very serious mistake to make a decision that locks in for the next 10 years a tax cut that is so big that it threatens the Social Security and Medicare trust funds. Let's remember, when we get past this 10-year period we are faced with a totally different situation; The retirement of the baby boom generation, the explosion of demands on Social Security and Medicare. The truth is, the choices in this budget resolution are critically important to the country's economic future. The question is, Do we have more of a tax cut or do we have more debt reduction? Do we reserve resources to improve education, national defense, and provide for a prescription drug benefit or do we go on the cheap on education? Do we go on the cheap on the health care of the American people? I hope very much, as this debate continues, we will have a chance to really inform the American people of what the choices are. I believe the choices we made on our side are the choices they would make in their own families. If they had a windfall I do not believe they would go blow it all on a vacation or fancy car. I think they might take a vacation, but I think they would also pay down that mortgage. I think they would also use those resources to invest for the future. Those are the principles and the values that have formed the budget we are offering on our side. It is a budget that protects every penny of the Social Security and Medicare trust funds, a budget that takes what is left and provides a third for a significant tax cut for all Americans, including addressing the marriage penalty and reforming the estate tax; and with an additional third addressing those high-priority domestic needs of improving education, strengthening national defense, and providing a prescription drug benefit; and with the final third, taking that money to strengthen Social Security for the long term, to address this long-term debt that is building. We think that is a pretty good set of priorities, and we hope our colleagues will endorse it before this week ends. I thank the Chair. I yield the floor.