specific matter and then the discipline seems to break down. you will have a true emergency, a natural disaster, a katrina, a national security issue where we obviously have to respond to, and then we sort of say, well, we'll take care of that and we do it in a different matter. well, we understand that, but other matters get characterized as emergencies or urgent res, and we make separate exceptions. i great we need to do this in a balanced way, but it seems discretionary spending is the one in the focal point and take the brunt of this discussion, so i was pleased with the president mentioned domestic discretionary spending first. i want to try to get the relative impact of what the president said in your congress -- in ycbo --

cbo baseline, what projections are you making in regards to diskris nation domestic -- discretionary domestic spending? >> we take levels approved and increase that over the remappedder of the decade with our estimate of inflation. >> and the president mentioned 3 years. would that be different from what you had in your baseline? >> yes, it would. >> can you tell us what would happen if we did a freeze on discretionary spending over the next five years? >> i do not know precisely what the president is proposing. we did a calculation freezing

all non-defense discretionary spending except that that was directed by the appropriations committee. if one reason is that by five years and at the end of the five years, increases it with inflation, the savings over the decade are about $400 billion. >> thank you. you mentioned three policy issues that are not in your baseline, but are actively being considered by congress. the alternative minimum tax, the extension of the tax issues passed in december, and the physician reimbursement under medicare. let me take them if i could -- let me take them, if i could, separately. can you tell me what a negative impact each of those policies would have on your projections?

>> there is a table in our outlook on page 122 that gives the budget it facts of a variety of alternatives. the effect of extending the income tax and the state and give tax provisions is about $2.50 trillion over the decade. the effect of indexing the amt our inflation is about $700 billion over the decade. -- amt for inflation is about $700 billion over the decade. one does the extension and in texas the -- does the extension and indexes the amt, it at $3 trillion over 10 years.

the effect of maintaining medicare payment rates for positions is about $200.- 1539607552. -- $250 billion. >> part of bringing the budget into balance is that we are going to have to make sacrifices. if we do that, we will bring about savings in the budget. if we talk about the tax issues and say, taxes are different, it pales in comparison to the extra deficits. i have not got into the military at. your baseline assumes what for military spending -- i have not

gotten to the military gets -- military yet. you a baseline assumes what for military spending? >> that level would not be a good representation of what your colleagues would expect for baseline spending. we also provided some alternatives that involve different paths toward defense spending. >> so you are taking a lower projection for the future than using the current. you believe there will be some savings in the next 10 years. >> i am just saying that you and your colleagues have often asked us the question. you think this is hired and what you anticipate. >> so your base line starts with

the current level of military action we are participating in? if we bring down military action and do not have to spend as much on our soldiers overseas, we can bring some back, that would give us some savings that are not in our baseline. i understand there will be trade-offs. >> when secretary gates has talk about savings he would like to implement, the savings he is discussing are from a higher level from our baseline. he is discussing savings relative to the budget plan the defense department has put out. those savings bring down that budget plan in the direction.

part of the problem is, depending on where in the year we have done the protection, whether the congress has enacted supplemental appropriations that have gone for overseas contingency operations. it has been and are pingpong. >> my time is up. i did not have time to go through the analysis, but my point is this -- all of the major areas need to be on the table. i think all of us were proud that the recommendation was balanced. we do have problems with the provisions, but you have to have all at the table. let's not just pick and discretionary domestic spending. >> thank you. i want to welcome senator thune to the committee. i look forward to working with you.

let me indicate to members that i try not to interrupt senators when they are questioning, even though they may not -- even though they may be at the end of their time. when i hold up the gavel, i know don't want to tap it on members, but if you try to stick close to the time in fairness to others. >> thank you, mr. chairman. dr. elmendorf, welcome, and of start out by saying how much i and other members of congress and committee appreciate the professionalism and integrity of your office. i know the numbers you report are often battered around and spun in different ways which must be a source of tremendous frustration to you, but you always seem to keep your cool despite that. it's important we get good numbers and thank you for that. >> thank you, senator, that

means a lot. >> unfortunately, we talk about the budget and economic outlook, i feel like mark twain when he said everyone talks about the weather but nobody ever does anything about it. i think congress is guilty of that. that's why i was pleasantly surprised, mr. chairman, when you and other members of the president's fiscal commission came out with what i thought was a bold and dramatic and a sobering report. i hope we will take the opportunity to deal with this crisis and i do believe it is approaching a crisis. we do not know when the tipping point will come, but we are almost there. we can't just talk about the economic outlook and the budget, we have to do something about it. i believe there is a window for us to do it.

i heard you say we have to be careful about the pace of some of the austerity measures because it could further depress the economy. i hear you loud and clear. i think the political reality is we have a short time to do this. if we do not do this within the six-nine months, the opportunity will be lost. i am anxiously awaiting the president's budget, which will come a week of february 13th, to see whether the president himself is serious about the crisis that was so well documented and explained by his own fiscal commission. i hope that opportunity is not squandered by the same old, same mold sort of thing that seems to happen time and time again. i know we talked a lot about the need to cut, but you alluded to

the crowding out effect of more federal government borrowing on private access to private credit. i would like to talk about the importance of not just cutting, but growing the economy because i know when senator portman was the office of management and budget director at the beginning of 2007, the budget deficit was 1.2%. now it is around 10%. one reason it was low is not because we were spending money, because we were. but the economy was booming. jobs were being created. the federal treasury was getting a lot of money. but for the reasons the chairman mentioned, not only are we continuing our bad habits in terms of spending the amount of money coming in because the economy is hurting, because people are out of work, losing their homes, it is a double clammy.

let me ask you -- is a double whammy. you have some economic projections in terms of growth of our gross domestic product. i believe i heard you say, and this appears to say on page 51, in 2011, you are protect -- you are projecting the gross domestic product to grow at 3.1%. is that correct? >> yes. >> can you tell us how much growth in gross domestic product is required to see a net increase in employment? i assume with new people entering the workforce that there is a level -- i cannot recall the specific number, is it a range of growth we need to see before we see the unemployment rate come down? >> at that pace, we think the unemployment rate will come down, but slowly.

we think the potential growth rate of the economy -- i should explain what i mean -- apart from the cyclical issues, as the labor force for almost fully employed and productive capital were fully in use, economic output would grow by up to 2.5% per year. if economic growth exceeds that rate, we are in the process of closing the gap between the potential level of output and the actual level of output. that means putting equipment and people and plants back to work again. >> ben bernanke testified that by 2012 we would still see unemployment stubbornly high in the 8% range. do you agree with that? >> i do. we think the unemployment rate will be down to about 8.2% by

2012. that's better than today but still well above a level we have seen in strong economic conditions in the past. >> since time is so short, let me conclude on some matters that are of grave concern to me. that has to do with energy costs and some of our policies emanating from washington having to do with our domestic energy supply. i don't think it's any secret that the moratorium imposed on drilling for oil in the gulf of mexico, and now that the formal moratorium is lifted, what is -ometimes called the permit orium, that is having a dramatic negative impact on employment, particularly in the gulf states, but the ripple effect throughout the economy. we have discovered in the last

couple of years as a result of modern technology, a huge amount of natural gas here in america available from shale formations. as i heard the president talk about green jobs, which sounds very good and certainly we are all for conservation and looking for ways to protect the environment as we develop energy sources, i was concerned and there wasn't a lot of talk about what i would call red, white, and blue jobs -- jobs created from domestic energy sources. let me conclude on this and say what do you see in terms of energy costs, particularly gasoline costs? if we see for dollar and got --

$4 a gallon gasoline costs, will the rising cost of energy due to our economy? >> i don't know offhand what the projection is. for oil prices, which are a very important economic factor, we look to the futures market as our starting point and follow the path of people buying and selling the right to have oil in the future -- i don't think that calls for further large increases on the price of oil. i am not sure about gasoline prices. oil prices, we have rising -- they are about $90 a barrel. we have them rising to $100 a barrel by 2017 and $110 a barrel by 2020. the price of oil can easily shoot up will be on that and fall well short of that. so you should picture having a

very large range around these numbers. but we think this is consistent with what's in the futures market. >> if a conflict broke out in the middle east and people became concerned, those numbers could skyrocket almost immediately. >> yes. >> thank you dr. elmendorf for all your good work. in the 1980's, democrats and ronald reagan got together on taxes, cut taxes, cap productivity and grew the economy. we found a startling number in the two years at all that bi- partisan work. the economy created 6.3 million non-farm jobs. that's twice as many jobs as were created between 2001 and 2008, when tax policy was partisan. in your analysis, you assume

that between now and 2012 there will be no changes and after 2012 we will see what happens. what could you tell us -- and this is a very rough analysis -- what would your fiscal outlook be if in the next two years, democrats and republicans picked up on the kind of work done in the '80s and grew the economy? can you give any sense of how your fiscal outlook could change? obviously it would change because you are not making any calculations based on anything else be dead -- being done. what would you suggest would be part of a changed fiscal outlook if a tax reform along the lines of what was done in the '80s was enacted? >> mike capacity of analysis

usually falls well short of your questions. as a general matter, it's a widely held view among experts that a tax code that had a broader base with fewer special exemptions, deductions, credits and so on, and there by could have lower tax rates to raise the same revenue, would be more effective tax code in terms of raising revenue while producing less distortion to private economic behavior. all else equal, and there's a lot being swept in to that phrase, a tax cut with a broader base and lower rate is one we would expect to be more conducive to economic growth. >> which would mean the fiscal picture you have painted today would not be quite the bleak when you have offered. >> not quite as bleak. as you understand, the gap

between spending and revenue under the extension of these policies has been very large. that's not a gap the economy can grow its way out of, even with the world's best tax system. >> let's talk about the international implications of tax law if we can. i am very interested in seeing the corporate rate cut considerably and have proposed cutting it from 35% to 24% to encourage manufacturing in the united states. in effect, that would provide us an opportunity to repatriate some of the money that is parked overseas back here in the diet states again to grow the economy. have you all done any analysis with respect to an approach that would promote that kind of repatriation through a tax code that incentivizes job growth in

approaches on different corporations in work we hope to present to the congress in a few months. i don't think we studied that particular proposal as of yet. >> i will follow-up with your staff on that. i think we know that billions and billions of dollars are parked offshore right now and we ought to make it more attractive to repatriate that money through tax law and in sent private sector job growth in the country. i'm going to ask you the same question i asked ben bernanke with respect to tax law. the effect of doing just corporate tax law changes rather than individual tax law changes at the same time. my sense is because most businesses pay taxes and is -- as individuals and not as citicorp corporations, -- and c-

corp. >> from the perspective of an analyst, tackling all the aspects of a general problem that once seems most effective. it is up to you and your colleagues to judge how many changes you can think through and agree upon in a finite time. as you understand, both the corporate tax reform and individual tax reform agendas are incredibly long and complicated. from an analytic perspective, trying to think about all the pieces of the tax could together would be most effective and appropriate. >> i think the interactions between what individuals pay and what businesses pay is now so intertwined with sole ,roprietorships, llc's

partnerships, to say you're going to split off one piece of the tax code and say you're going to reform there is a vastly oversimplify it and create a lot of distortions. what are the growth implications of doing taxes on a temporary basis? let me read you a sentence from the "wall street journal." the united states has no permanent tax regime for leverages on capitol gains or family breaks for students and others. in effect, what america has done is to put the tax system on a permanently temporary basis. we are facing things in, taking things out, we have a permanently temporary tax code. what are the growth implications of having something that is now a jury-belt system rather than a

look at those 1986 numbers, which are eye-popping. to think when ronald reagan and democrats got together, in two years, they created more jobs than you saw in eight years of partisan tax policy. what would be the benefits of looking beyond a tax approach. >> the current nature of our tax system is damaging to the economy. we hope and expect businesses and families are planning ahead in making decisions and investments for the future and it's very difficult for them to make those sorts of decisions in an informed and thoughtful way if the tax rates that will apply to them a year or two down the road are so uncertain. resolving that uncertainty would encourage and support household

decisions, business decisions, and investment and hiring, probably. >> my time has expired, but because we will be working closely under your leadership under the next two years, i want to touch on a last point that dr. elmendorf made about the nature of a temporary set of tax policies. if we have the same debate in the lame-duck session of 2012 where we are once again talking about extending the tax law today for two more years, dr. elmendorf has told us that will be damaging for the economy and the country. with your leadership, i hope is that this time over the next two years, we can make permanent, pro-growth changes to tax law, get it done in this congress, and not just real litigate another set of temporary tax law changes in the lame-duck session of the 2012 congress, which dr.

elmendorf has just told us would be very damaging. i think the point dr. elmendorf made is especially important. >> senator sessions is now back. he was at another hearing. i think it is most important we get to him for any additional or opening statement he would want to make and then we will resume questions. >> thank you. [audio difficulties] that is better. fundamentally, you are absolutely correct.

a permanent tax policy is better than uncertainty and we have too much uncertainty in our economy and we need more stability and you have come forward with some proposals and ideas i think are worth serious consideration and i look forward to working with you on it. i truly believe you are attempting to accomplish something in an effective way. i'd like to congratulate you, mr. elmendorf for your real important. you have carried out your duties with honesty and integrity. you have some rather specific controls on how you score and evaluate matters. it is not your fault, they have been established and you follow them, i think objectively, whether we like that are not. the rules are set up mostly by congress. we have the new baseline and the news was not good.

the deficit is expected to reach $1.5 trillion this fiscal year as of september 30th as, well above what we were projecting not long ago. our gross debt is expected to reach 100% of gdp, meaning the amount of all the money our nation as will soon be equal to the value of everything are nation produces. that is above the 90% level that could be calculated in the analysis of nation to default on their debts. the 90% rate is significant. 40 cents of every dollar we spend is borrowed. by the end of the decade, the interest on our debt is expected to rise to $750 billion in one

year. that crowds out -- people want spending, people want to spend more on a host of projects and i'd like to do that too, but we have $750 billion less because we have to pay interest on the surging debt we have. alan greenspan said recently that we have almost a 50/50 chance of a bond market crisis in the next two years. that was from a "wall street journal" interview. i thought that was something we should hear. this is a man of wisdom who has been around a long time and he says the only question is will this debt bond crisis be -- these kinds of budget numbers we need be passed before or after the crisis? it would be a lot better, i think we all agree, critical that we do of before the crisis.

the path we are on is unsustainable, yet i have to say president obama in his state of the union address, announced fundamentally we would continue as we are. to hear the president's remarks, one would think his speech had been written 10 years ago. they were disconnected from the reality of the debt crisis we face. earlier this week, i said his state of the union address would be a defining moment for his presidency. i don't think he rose to the occasion. it was a timid speech, it squandered a historic opportunity to rally the american people behind true spending reform. he had the opportunity to look them in the eye, say what the real dangers we are facing our and call on us to meet the challenges that americans will it properly called. it was far short of the standard set by gov. chris christie in

new york and david cameron in the uk. no one forced the president to be the president. like my wife says, don't blame me, you asked for the job. he asked for the job and he has a real tough job now and i don't think he did lead effectively. he proposed instead we continue a five-year plan. this so-called freeze on domestic spending is not a plan to reduce deficits. it's a plan to preserve the deficits, locking in place the very spending levels that have been dramatically increased by president obama in the last two years. the plan is remarkable, not for the strength, but for its weakness. in defense of his proposal, he argued the government spending is the engine of the economy, that the government is the engine of the economy,

basically. he had this airplane metaphor backwards. the engine of our economy is the private sector, not the public sector. when the public -- and the private sector grows, it creates new jobs, new industries, new ideas and more tax revenue. but when the public sector grows, it simply consumes more of what the private sector produces. big government waste is funded on the back of small business thrift. the american people deserve candor and directness from the elected officials. the money to sustain the president's big government vision, the more investments he called for is simply not there. we don't have the money. meaningful spending reductions are not a choice. they are an obligation. there is no serious alternative. we need to take a tougher road, the road that leads to prosperity. reducing the size and cost of government and not be easy, but is the only responsible course,

the only one that will lead us to a better future. so i look forward to discussing the issues with you now and as we go forward through the next years. together, i believe we can make some progress. mr. chairman, there is nobody who has seen this and study this more carefully than you. i look for to seeking your advice as we go forward. >> thank you. it may turn out that it just falls to less in this committee to put forward a plan. if the commission did not give 1418, it may just be that we have to go backed -- go back to a process that worked in this

committee when i first came here, which is to have a real markup. "and for this committee to lead. frankly, i never thought on a problem with the dimensions of this one, where we typically do five-year budgets, in this circumstance, which requires a plan that extends beyond five years, that this was not the forum to sort it out, but i am not sure anymore. i'm not certain it is not going to fall to less to put a plan out there for our colleagues on the floor. i am going to be having discussions with members of the committee on both sides to see what the feeling would be about our taking this on and laying a plan before our colleagues

because this is the budget committee. even though we have typically been limited to five-year plans, maybe we are the only ones who are going to have the opportunity to lay out a comprehensive plan absent some kind of summit. i think the thing that makes the most sense is there is a summit between the white house, leaders in the house and the senate because of the end of the day, the white house has to be at the table. unfortunately, the budget process, the president is left out. the president gives us a budget and congress passes a budget but it never goes to the president for his signature or veto. but if there's not going to be a summit, there's not going to be some kind of negotiation. maybe it's going to fall to us in this committee to put forward a plan.

>> let me congratulate you on your reappointment. >> thank you. >> we're glad to see we all agree on something. on health care, you scored health care and you see where we are right now with the bill being sent over in repeal and i heard the $200 billion for on that. could you elaborate on that and a little bit on what the mandates would do if they were eliminated and from the state's perspective, the medicaid -- i'm not sure if anybody really understood where the governors were coming from, most states do not cover 50% of the people qualify.

we'd jump from 50% of all the way to 133, which we have a hard time swallowing. if you could talk about that, i will have one further question. >> you raise a lot of complicated questions. the original legislation enacted last march, a patient protection, affordable care and the reconciliation act set in place substantial expansion of federal entitlements for health care. it paid for that expansion by the setting in place new tax revenues and trimming money from existing health programs, particularly medicare. by trimming the money for medicare in a way in which the gains to the government budget would increase over time, the

rate of increase to payment providers. in our analysis, the combination of the extra tax revenue and the reductions in spending laid out in the legislation exceeded the cost of a new entitlement so the legislation had in our assessment last month -- last march, small positive effect on the federal budget. in the preliminary analysis, we prepared for the house vote that repealing that legislation would have a small negative affect on the federal budget. we are in the process of constructing a full pullback which we will make available as soon as we have completed it. one of the many questions we were asked along the way during the health debate in addition to the federal budgetary effects was the affect on state budgets. the expansion of medicaid put

additional burdens on states, the expansion was set in place in such a way that the federal government pays at -- pay a larger share of the cost of people made eligible for medicaid that it does under the current program. but nonetheless, it would not pay all of that bill and the share the federal government will pay for the newly eligible people declines overtime. our latest estimate is that the state share of the costs associated with the medicaid cover and much -- coverage expansion will be a little over $60 billion during the time covered by this latest outlook. > that is when the state's -- and that goes into effect? >> yes. we tend to report 10-year numbers. it is principally 2014 and beyond. it is not our place to judge how they can deal with that or

whether it is appropriate, but the estimate incorporates our expectation of changes in state behavior in response to the firebird and they will face. our estimates cannot incorporate changes in law that you and your colleagues might incorporate the federal level, but our estimates and corporate responses by family, businesses and state governments. >> give me, if you could score the reduction of 133 to 100 >> also, the mandates were removed. if there is an offset, we could talk about that. i was very proud of the debt commission. in west virginia, every family

sits down and work through their budget. they start a budget and stick with it. most states have a balanced budget amendment. i want to know what your thoughts would be for this federal government because it does not seem we are going to have the will to tackle the problems we have to and the votes that have to be made unless there is a balanced budget amendment that forces us and it would do it over time because ratification would take some time to do it. in give us a chance to get our financial house in order. the states are going through some very challenging and difficult times of making difficult cuts. they are looking at the federal government was saying why can't you do it? we are taking these cuts and making these tough votes but we don't see anything coming from washington. if i could hear your response on a balanced budget amendment and a constitutional change of how we do business in washington. >> i don't think it's appropriate for me to make a recommendation for or against

that sort of change. i will make a few observations. the set of budget rules set in place in 1990 regarding caps on discretionary spending and the pay-as-you-go system for mandatory spending and taxes seemed to have been effective at helping to guide decisions of the congress as long as there was the focus in the congress on deficit reduction. once the budget improved, and a focus dissipated, those restrictions were no longer effective. >> the focus in the congress, amending the constitution to require that sort of balance rages -- wages -- raises risks. the automatic stabilizers the government has, the fact taxes

fall when the economy weakens and that spending programs increases when the economy weakens. existing law -- there's an important stabilizing force for the aggregate economy. state governments need to work against as a fax in their own budget and need to take action to raise taxes or cut spending. that undoes the automatic stabilizers that the state level. taking as a way at the federal level risks making the economy less stable, which is exacerbating the swings in the business cycles. >> but would you agree we are very unstable right now? >> yes. the automatic stabilizers are not purposefully stabilizing. but taking away would have cost you and your colleagues would have to weigh. that amendment does not suggest how you or your colleagues would change taxes or spending. >> would you be asked to score a balanced budget amendment?

>> we do not score amendments to the constitution. >> i would like to you -- like to talk to you further about that, is very important to me, every governor and household in west virginia. they can do it, they think we can do it also. >> i did not ask any questions and my first comment. can i have two minutes to ask a question? >> >> we have an unusual situation. it is a little unfair to do that. the your the ranking member, so we'll make an exception great >> you are a great chairman, and i thank you. magnanimous. >> with regard to to this core of the health care bill, mr. elmendorf, the money that came

in through this bill, with medicare trams and medicare cuts, tax increases, most of which were medicare tax increases, i believe, that money was used to fund the new program. but two things are important. mr. elmendorf has made it perfectly clear that you can't cut the money twice. cannot increase medicare and it fund the new program. this is a very serious matter we're talking about. thet it true that treasury, new health-care program is in giving money to fund the program, but the money they got and the medicare cuts is borrowed by treasury and

treasury oppose that money back when medicare continues to go into default and claims of money back? >> senator sessions is referring to a set of letters we cents in his request in january of 2009 and 2010. it is done on a unified basis, taking into account all spending and revenue. the net of fact with deficit spending as a whole. the cutbacks in medicare spending, to get with revenue increases more than offset the extra spending on the new health entitlement and expanded health entitlement. it is also the case that the savings in medicare, particularly the savings in the hospital insurance part of medicare then lead to a greater

accumulation of bonds in a trust fund. those bonds have important legal meetings. there are real u.s. debt backed by the full faith and credit of the united states government, like the debt sold to the public. they do not have independent economic meaning in the sense that the trust fund has an accumulation of bonds. that does not give the trust fund a separate way to pay medicare benefits, except by coming back to treasury, redeeming those bonds, and getting that cash in the future. another way to say that is that paying medicare benefits in the future relies on tax revenue that will be raised in the future or borrowing that will be done in the future cannot depend directly on the bonds in the trust fund. >> i think that's fair and all this need to understand that, but i would go a little further.

it increased the internal debt of the u.s. treasury because the money extended for the health care program is borrowed from medicare, at least a substantial portion of it. when medicare, since we know is going into default, inevitably will call those bonds, the united states treasury will have to raise taxes or borrowing on the economy or deflate the currency, which is the three choices governments have, isn't that basically correct? >> the money is being borrowed from the medicare trust fund. >> it increases the internal debt, the gross debt of the united states. >> absolutely. >> i think the senator for making the point because we have the same issue with social security. the hard reality is social security has trillions of

dollars of assets. that is true. there is special purpose bonds backed by the full faith and credit of the united states are real assets. the problem is the only way those bonds are redeemed is out of current income. social security is going to go permanently cash-in five years. i have to say -- and i have received the lash from those who say you should not have to touch social security because there are trillions of dollars of assets. that's true. it is true that there backed by the full faith and credit of the united states, it is also true that the only way those bonds get redeemed is out of the current income of the united states. we are about to see a dramatic shift in the budget circumstance when we go to having hundreds of billions of dollars of surplus

and social security the general fund could borrow to having a circumstance in which there are hundreds of billions of dollars of debt that has to be serviced out of current income. senator, i apologize because you got delayed. >> that's okay. the important thing is getting some of these issues on the table. what you just talked about is of absolute critical importance. you talked about the full faith and credit of the united states and that is what we are dealing with. the chairman held up about moody's and standard time -- moody's and standard and poor's, talking about the aaa rating of the united states. japan was just downgraded to aa. what would a downgrade from triple a to double a of the united states credit rating due to the interest rates and your budget projections? your budget projections in my

opinion, i know you try to be conservative, but as we have seen, i think this year you projected a $1.1 trillion deficit. for this year, it turned out to be a $1.5 trillion. some of that was because of the tax policy, but the bottom line is these things can change radically very quickly. the full faith and credit idea, this idea of of the bond traders downgrade our bonds, if the fed is successful, and a lot of people think they're going to be successful in raising inflation because that's what they're trying to do with the monetary supply, those all lead to higher interest rates, higher than you are projecting. that is the question -- if it goes out to double a, what does

that do your projections? for the steps? >> if the federal government's credit rating or to lower, that would push up the interest rates the government would pay and push up the interest rates would have to pay. we would not quantify how much it would affect interest rates, but it would be an adverse affect. >> it would not be insignificant, it would be significant, would you agree? >> absolutely. >> you talked about this -- the sooner we make these changes -- they are going to be painful, but the sooner we make them, maybe all less painful. as alan greenspan talked about, we're going to have to make these changes, it's just do we do them in the middle of a crisis or do we do it to avoid the crisis? that's a significant part of this.

my colleagues mentioned we need presidential leadership right now. the chairman has talked about this committee doing its job. i could not agree more that the president needs to lead right now. these issues we're talking about, and you have been around and seen this, dr. elmendorf, it's much easier to get reelected by giving money away. none of us want to make these tough political boats. but we have a democratic president -- these political votes. we of democratic president, democratic senate, and republican house. the president would lead come join the parties together, we could do what's right for the american people. but it's up to him to lead. he's the president, he's the only one with the bully pulpit. our little microphones here don't echo through the country. i think he failed on the state of the union, but he has plenty

of opportunities. we have the debt ceiling coming up. he has his budget coming up. there are plenty of opportunities for the president to lead. forget our party labels, this is about the future of our country. the-you're talking about, the interest on the debt, you say that's unsustainable. it is. it is unsustainable. dr. elmendorf, the reason you were reappointed by republicans and democrats is you try to call a fair shot. we don't always agree, because what you do is unbelievably difficult to predict, but you play within the rules you are given and some of the rules aren't necessarily the best rules for making the most accurate deductions as well. but the bottom line is all economists agree, our country is in serious trouble if we do not deal with the debt and deficit problems. $400 billion the president talked about the other night,

what percentage is of the debt we are going to accumulate over the next 10 years based on your projections? >> under the based projections, we expect the government will accumulate about $seven trillion in debt over the next decade. $400 billion is a little over 5%. -- about $7 trillion. >> especially the talk about the alternative minimum tax, and all those things we know are going to happen -- >> if we go into all those expiring provisions, we look for debt of $12 trillion over the next decade. $400 billion is a few percent of that. >> as far as total projected spending during that time, what percentage? my back of the napkin calculations are less than 1%.

the president has basically said we're going to reduce spending by less than a penny at of every dollar when this country, all economists say it is unsustainable. this country is headed for a financial crisis that we maybe have never seen. for us to sit here -- that's why it's so important to join together as republicans and democrats with the president to tackle this problem. mr. chairman, i'm willing to join whoever it is, but we have to make such a difficult -- these are going to be painful, politically painful choices to make. we have to have the kind of tax policy because you cannot just cut your way out of this. you have to cut and grow. you have to do them both at the same time. it's the only way you are going to solve this financial crisis that could be looming on our country.

the last thing i have this -- the last thing i have this state pensions. moody's is requiring states to put their pensions on their books. you talk about destabilizing factors, what does that do potentially to this whole economic projections going off into the future? >> we are in the process of completing an issue brief and state pensions which we will release very shortly. it's a very important topic. the issue of stabilization was in the context of year to year behavior during the recession, downturn and recovery. a very important long-term financial issue for states and local governments is the commitments they have made to pay certain benefits to retired government workers and whether they have or have not put aside sufficient money to meet those. >> i realize my time has

expired. my last comment is it's not in the future. my state is dealing with this right now. cities and states across the country are dealing with this problem right now. they know most of it is in the future but it is affecting their state budget currently. thank you, mr. chairman. >> thank you and thank you for your courtesy, senator. >> thank you. with respect to your comment about his the committee becoming a forum for doing some significant debt and deficit work that we may need to do, i can assure you i'm prepared for that work and i think every member of this committee would be prepared for that work. if it is your judgment to proceed in that way, i think you'll find those interested and hard-working senators prepared to engage in that discussion. >> i thank the senator for that. i have thrown this out as an idea and that it's going to

take discussion among all members of this committee. personally, i would prefer we have a summit that involves the president and the leadership of the house and senate, but if that is not to occur, as to start somewhere. >> dr. elmendorf, if you have an insurance company and it collects premium in order to make payments in the insurance program, it builds up reserves that the insurance company holds and there are times when fires take place, katrinas take place, lives that are insured expire and you have to draw on those reserves. in those times, the insurance program may go cash negative. but it remains fully, actuarially sound. as i understand it, our problem with social security is that it

is and has been actuarially sound, will be actuarially sound through 2037. but that reserve fund of the incoming premium set aside was not left alone. congress took it, borrowed it, left an i/o you in its place and spend it on other stuff. i see you nodding. i think it's important to point out that social security as a program is not actuarially at fault for the need we have to fund the cash needs. the problem because the need to fund the cash needs is not that there is an actuarial problem with social security, at least not for a quarter-century, and i suspect with the president's recommendation, you raise the payroll tax cap and it becomes fully solvent indefinitely.

what has happened is management went into the reserves and took them out and spend them on something else. if this were a private company and i were an attorney general, i would probably be prosecuting that management. but this is congress and it's all done in the light of day and everyone was in on it and it's part of the way we have done business. is that a fair description of our social security problem? >> let me just say back to the part i understand and i think i agree with -- social security has sufficient resources, meaning the bonds held by the trust fund that, together with the expected inflow of payroll taxes, it can meet benefits under current law for decades to come. as you are saying and senator sessions and senator conrad have said, the rest of the government in a sense, use the cash, left

the trust fund with bonds, which are viable assets that you are running a private security company and had securities in a vault, you would view that as an investment for the company. the problem is the rest of the government use that cast -- use that cash. if the government had run surpluses equal to the savings of the trust fund over the years, the government would be in better financial shape due to the surpluses. it would be in much better shape to meet those commitments in the future. but the government has not run surpluses commensurate with the increasing balances in the trust fund and the government has not improved its financial condition using that money. it has used that money for other purposes as senator session notes. health legislation enacted last march it essentially does with extra money building up in h.i. trust fund. >> but it's not the flow in the

actuarial fund that causes the reserves. it's the fact that the reserves were removed and now need to be replaced. >> i think that is fair, but i 0 looks atthe thatc cb the budget in the underlying sense. inside the budget -- that's true for the social security trust funds and for the hospital security trust fund in medicare as well. once there is a trust fund, building up assets which is essentially an annual cash flow basis, there is intrinsically a disconnect and the risk of a double counting referred to to emphasize we can't keep the numbers straight, but one has to be careful in thinking and talking about it. >> is it not similar to the difference in a security shortfall and insolvency problem? >> the federal government as a

whole, there is a problem that total revenues expected to command are not up to the total spending expected to go out. it's at a level of the overall government i would expect to focus. >> let me go on to another point. it has been recently said that the product of our debt is the active may president and congress is over many years. i want to single out one president, president clinton. as i recall, under president clinton, the nation saw his first budget surpluses in decades. if my recollection is correct, in january 2001, immediately after president clinton left office and when the bush administration assumed office, it was the finding of the nonpartisan congressional budget office, your operation, that the clinton era trends, if they had

been continued forward would have led to a debt-free united states of america by the end of the last decade. is that correct? >> i believe that is correct. >> i think it is fair to exempt president clinton because he left us on track to be a and actual debt free nation. >> as you know, i don't take sides on president for members of congress. it's worth emphasizing that a number of things happened in 2001 that baseline projections did not anticipate. one was a very important change in tax policy which the bass line is not designed to anticipate. >> but those were not the fault of president clinton. >> i do not talk in president terms. >> they took place after the president left office. >> the other thing that happened was the economy fell into recession, suffered a very large decline in the value of

stock prices and -- >> again, after president clinton left office. >> at time, there was some dispute about when the recession started. >> as of january 2001, you were predicting, your organization was predicting a debt-free nation. >> what i am saying is there were economic developments and changes in the amount of tax revenue forgiven economy adverse to the budget outcomes. i do remember off hand, how much deterioration occurred after that was due to legislation and how much was due to revision to the economic and technical projections.

>> senator johnson. >> thank you. i believe this country hummers for leadership. i would suddenly step up to the plate and take lead on this budget and try to restore fiscal responsibility to this nation. >> high pressure that. >> does the cbo ever go back and studied what estimates had done from the standpoint of revenue and figure out what the actual results were and just compare with your estimates were? >> we certainly do go back and look at our performance as best as we can evaluate it. we do not do the revenue estimates. we do the revenue baseline projections of this report. but the analysis is done by day -- we do look at our economic

forecast and report once a year on how accurate they have been appearing every alcor update reports on the revisions from the previous out looks so we can see where we have gone wrong. we also look back when we can to see how pieces of legislation has worked out on the spending side. many forces are impinging on the outcomes. the fact that the on outcome of stiffens and with the legislation was passed, it may be that we had the wrong estimate the legislation or had a rough estimate on everything else that was going on. but we certainly do try. >> but me 0 a non revenue in particular. -- let me zero in on revenue in particular. if you know of anybody who has done that, i would be interested in seeing that in my office.

in terms of the health care bill, do you estimate how many businesses would drop coverage and, as a result, how many individuals would be put into the exchanges and what the cost of that effect would be? >> yes. our estimate of the effects on the legislation for the lawyer -- for the employer-sponsored coverage, that was the net of a larger gross decline with some offset of additional off insurance by some employers, the estimate with the subsidies and the -- it accounted for the penalties imposed on individuals and businesses and the small business tax credit and so on. we thought that the overall effect of that set of provisions

would be that some number of people would not receive insurance through employers who otherwise would have come others would get insurance from employers and would not otherwise, and fewer people was coverage fromsurance their employer. so we estimated that, in 2019, 3 million fewer people would have employer-sponsored insurance. that reflects a net of 8 million to 9 million who would have had employer coverage under prior law and would not under the legislation that was enacted. 6 million to 7 million would not have been covered under prior law, but would not have coverage under legislation. 1 million to two million people would have an offer of employer-based coverage, but would get exchanges instead. >> can you give my office the details of that? >> of course. >> i would like to talk a little

bit -- you talked about automatic stabilizers of a managed budget. would we be allowed to have those automatic stabilizers? >> it might impinge on the stabilizer's of the spending side of the budget. even apart from an extension or expansion, people would lose benefits. what used to be called food stamps, people now get supplemental substance assistance. -- substance assistance. it would impinge on things like that. we discussed a few minutes ago spending,iscretionary

especially the non-defense discretionary spending. that is only one piece of the budget. it is not a large a piece as many people did believe. a lot of the spending goes to social security and medicare/medicaid. everything apart from those large health programs and social security and defense, the net interest payments and the debt and everything else, it is about a fifth of spending by the end of the decade by our projection. it would require changes across a large swath of the government's spending program. >> if you had a preference to choose from a constitutional amendment to a reduced spending program -- >> i do not come here to set my preferences but the analysis

that the cbo has done. >> ok. can you, in layman's terms, describe to a family what a debt crisis will look like? what will be the effect on individuals? >> i will try. if the people we rely upon to land the federal government money became skeptical that the government manages a budget in a way that they would get repaid and thus would start to demand higher interest rates to compensate them for that extra risk, that could push up interest rates throughout the economy. that would make it harder for households to borrow money. it would make it harder for the businesses for which they work to borrow money to invest and expand. on the federal side, if the government were unable to borrow

the money that it was needing to borrow giving the paths of spending revenue, it could result in drastic changes, seventh large changes in the taxes people pay to the government and in the benefits they receive from the government. of the sort that we're seeing in some european nations who have hit a fiscal crisis. the magnitude and sadness of the changes in what the democrats do in the circumstances combined with the effects in the economy in the rise of that interest-rate would clearly be damaging to people. >> i think the senator. ank the senator. >> i think the idea of a summit is fine. but i believe that the role of the budget committee, as a former mayor -- what we used to do is present our budget to the budget committee.

they would spend the time to explain and department would come in and both through it. i know that jurisdiction is used, but it is a budget committee. rather than wait to find out what the role is, we should seize it and do it. i think this is a great year to do it. i am a strong believer in that. i am happy to sit here to go through departments and figure out what the heck they're up to and give our version, hopefully, in a collective way of how to move this budget forward. the prospect of a vcr is damaging -- of a cr is damaging and disturbing. they are bad. they're not healthy for any type of government to do so. it is in our role and ability to do it. >> if i could just to intercede for a moment, i think of that, at this point -- question not take any of my time.

>> i will not take -- >> do not take any of my time. >> i will not take any of your time. number one, we typically only do a five-year budget. almost all the budgets that have been done by congress have been five years. the problem is that the plan that the country needs goes well beyond five years. the second big problem we have is that we do not determine the specific policies that are adopted by the committees of jurisdiction. we give them a numerical targets. we tell the appropriators from which they can spend. we do not tell them how to spend it. we do not have that authority. we tell the finance committee how much money to raise. we do not tell them how to raise it. and one of the difficulties of the budget committee, being the lead in taking on this task, is that a lot of the compromises

that need to occur go to the details. unfortunately, we cannot control the details. we tell the finance committee how much money to raise. we cannot impose on them our views of the policy that ought to be attached to that. that is -- we cannot tell them to broaden the base to raise this money and, simultaneously, lower the rates. we might make that assumption. on anything we pass, we can state where our assumptions are. but this committee does not have the authority to determine those specifics. so it really puts the budget committee in a very difficult position to reach agreement on a multi-year plan that has many dimensions to it because the specifics become critical. what are the revenue numbers really representing in terms of policy? again, that will not come out of the senator's time. >> also, is easier, too.

we do not have to tell exactly. maybe we do have an opportunity to provide a little leadership. >> i agree with both of you on that. if we have those discussions, we may have assumptions we can lay down. but then we at least zero of those numbers will be. i would encourage that. the second thing, before i ask your question, want to echo what is in the broader sweep. if i was limited to two items that this committee would focus on is, one, the larger budget, and two, the fiscal deficit. they will go to countries who are more stabilized in this element and invest there. the certainty of what our tax

policies are will be very critical long term. these two-year fixes are not responsible. we need to look at it longer term. in regards to tax reform, a couple of quick questions. we hear a regular basis, may be out of your office or the joint tax, but i want to get a good and clear picture. i think and of the answer. who really owns our debt? every time you hear it, you hear "for a country's." and they have a large part of it. -- "foreign countries." and they have a large part of it. >> it is owned largely by people in this country and also by people overseas. it is a combination of both

domestic and foreign. >> to know the ratio is roughly? is it about 70/30? >> is about half. >> 50/50. ok. a big chunk of our retirement funds, i can tell you, as a former mayor, we invested in securities all-time because the state was the -- all the time because the state was the right place to put the money. the family impact would be on the local level. it would impact direct services that local governments can provide because their ability to borrow would diminish in the debt crisis. is that fair? i want to make sure that is on record. >> i think that is fair. if there is a sudden shift of sentiment against buying u.s. treasury debt, we have not seen that in this country nor in the

world's most important financial market. we do not know what would happen. >> it is a multilayer affect. >> yes. it would ripple through the financial system in this country and it would make it harder for borrowing for local state governments as well as for families and businesses. >> very good. it was an interesting question that senator johnson asked. in these reports, which are great reports, what i would love to get if it is possible, and maybe the baseline projections that you utilize as your basic data in projecting -- what i want to see, when i see a chart like this, not that i want to question your track record, but if i look at 2010, it is a flash point.

what i want to see its projections that were projected and what happened. that helps me have a better discussion of on an analysis of it. here are some of the things it changed. why is that important for me? then i know that policy we enact has some impact on what you protected initially. is that available? if we said to you that here for five areas that we -- that here are four or five areas that we focus on, can you show a project just -- can you show us projections? >> yes. >> we will have our staff work with your staff. i believe that information like that, you look back and you can

tell if we were the cause. i think that future discussions will be helped. the last thing, as i said on the armed services committee and we will go through process with secretary gates and all the reductions that will take place. do you participate in that in any level? 95% of every defense department dollar has a u.s. impact because they're very focused upon. have you done any cross analysis on that? they are one of the highest in every department we have that puts money into this economy. have you done anything like that? or are you equipped to do it if you have to? >> i think we have not done it. i think we could do it. we can look at the economic effects of a variety of policy being considered by you and your colleagues, including, about a

year ago, we did the analysis of a collection of policies that were being discussed four possible ways of increasing the output of employment, boosting the place of the economy -- the pace of the economy. looking at the number of changes on the tax side and the spending side, we did not look at defense spending separately. we looked at infrastructure spending and changes in grants for state and local governments. >> my time has expired. the defense is a huge part of our budget. fairlyts recommended are barel significant. but because they have a big impact on jobs, we will talk with you may be through the armed services committee. >> yes, sir, we will have to talk with you. >> thank you. >> it is good to be here.

i appreciated working with the congressional budget office when i was in the house budget committee and at omb. i appreciate your testimony today. we find ourselves at a veritable time, doing that? it is a day after you told us that we're facing the base deficit of our country, in fact, in the history of the world this year. by the way, these projections are notoriously wrong. the unfortunate, this looks more accurate than some -- unfortunately, this looks more accurate than some. we know that projections can be wrong sometimes. but the fact remains that we face a fiscal crisis. i am delighted to be on this committee. i just found out last night that i would be joining senator conrad and sessions and others. as much as i was discouraged by your projections, i was

encouraged by what i heard today from my colleagues. what you said earlier, chairman conrad, is significant especially in terms of a five- year budget or a 10-year budget or trying in a bipartisan way to do it. we can solve this crisis before we have economic repercussions that you talked about earlier. i have a couple questions a wanted to focus on. they really go to any understanding -- to me understanding how you feel about this crisis in your debt. if you were to say what is the largest fiscal crisis or fiscal problem or fiscal issue facing our country, what would you say it is if you had to identify one thing? >> senator, again, i appreciate

your confidence in my gut, but i rely on the analysis that we do at cbo. the risk of breast -- the rest of fiscal crisis and our view comes from the imbalance between spending and revenue. that imbalance comes into our projections because spending rises into a share of gdp that we have not seen before in this country. >> but what is it in the spending side and that troubles you the most? what is the single thing? >> it is not a matter of troubling. it has to be torture center college choice what part you has to beddress -- it i your choice and your colleagues choice what part you want to address.

>> i think it is health care and not just as it relates to medicare and medicaid. 7% growth is unsustainable, but it affects the private sector and jobs and the lower revenues we would otherwise have. what do you think the most some of the interest is in the baseline projections? -- most significant risk in the baseline projections? >> this is a very difficult business. the crucial underlying factor here, as we were just discussing, is the rising number of older americans relative to working americans and the rising cost of health care relative to other things in the economy.

those fundamental forces have been foreseen for decades. i think they are in exorable under current policies. although the specifics will not turn out this way, i think there's a reason that, for many, many reports now, cbo and analysts have been looking at a deteriorating fiscal picture. >> do you think the fiscal rest is in expenditures in medicare? >> that is one thing. >> we talked about it earlier. but when my concerns in your analysis is the risk premium that the private sector is looking at, which is what the blue-chip estimate is of the years, i do not see it embodied in your analysis. you feel you have taken into account the risk premium of these higher debts? >> in fact, our production of

long-term interest rates over this coming decade is actually above the interest rates and that you can deduce from the current prices of treasury securities in a financial market. our projection reflects a combination of what we see in financial markets and our all modeling. our own modeling actually points at interest rates being a little higher than the financial markets have built in, particularly in the latter half of the decade, for the long-term securities. we expected to put some weight on our modeling and into the financial market. but the swings and sentiment that drive fiscal crises are not told well ahead of time. they are often -- they often occur very suddenly. >> that will be a big part of the uncertainty going forward. i think it relates directly to

the point made many times today, that we need to focus on what will happen with a rate. because that will affect everybody's everyday lives. we talked about the entitlement side today. i wish we had more time. i appreciate comments on tax reform. i was you one simple question about the corporate rate. there is recent research that says there is a maximization point in the corporate rate of about 26%. i think that is somewhat obvious that is lower or about the average of the oecd or the developed country rich. have you all looked that? do you think we are leading revenue on the table right now? in other words, by having a relatively high corporate, are we getting less revenue than we

would otherwise get? do you think there is a misalignment because of the global economy? what is your view on what the corporate rate ought to be? >> i am aware of that paper, but i cannot answer your question. i am interested, of course, myself, but if your interested, we can look at that report. >> let's get some views from cbo on that. whether tax relief pays for itself or not depends on the tax relief and this may be one area where we could find consensus. portion of the stimulus bill was the money going to the

states, the state fiscal stabilization. what do you expect would happen if a lot of that money, for example, such as medicaid money going to the states for two years, if that had not gone to the states? what you think would have happened? >> we think that states would have had to make larger changes to boost revenues or decrease of a short of spending. that would of had a negative effect on their economies. that is why, in our analysis of the recovery act, we think those provisions and others provided an important boost to output and employment compared to what would have happened in the absence of that legislation. >> florida receive about $4.5 billion just for medicaid over

that time. another two $0.2 billion was received for education. -- $2.2 billion was received for education. it was huge. is coming to the end of that time and what do you think is going to happen? >> the winning of the effects of the recovery act of the economy is one of the reasons that the economy is not growing more rapidly over the next few years in our projection. >> so we see less of a robust recovery as a result of all of going toral money don'not the states. they're not roads and bridges being built. it is medicates and education funding going to the

states. as a result of that going away, it will lessen the acceleration of the economic recovery. >> i think that is right, senator. it is analogous to what happens with the automatic stabilizers. in downturns, picture the economy running into a whole. the shot -- the whole is more shallow. on the way out, the recovery is also more shallow. the trade-off that you and your colleagues in the front is that the accumulation of debt to pay for the recovery act and the automatic stabilizers and all those things in the past few years has pushed debt-to-gp in a way that damages and risks itself. >> that is one consequence. baez not being able to send more money to the states -- by us not being able to send more money to the states, it will slow the economic recovery. us look on the other side.

we passed the health care bill. the health care bill, as it is passed right now and as it is law, will roughly save the federal government about a quarter of $1 trillion over the next 10 years. add your projections for the second 10-year period, that the federal government spending will be saved about $1 trillion. is that correct? >> senator, you're right. we think that, over the next decade, the repeal of the health legislation would increase

budget deficits by something in the order of two hundred $30 billion. -- in the order of $230 billion. enacted without any future changes, the effect -- the repeal would widen future deficits. we think that it is difficult to get a good sense of dollar figures in an economy with rising prices and that is growing. we said that repeal of the legislation would increase federal deficits in the second decade and a broad range of 1.5% of gross domestic product. you want to convert that yourself to dollars as some of the members of the committee

have. for our purposes, we think it is more constructive to report the number in that sense. >> ok. but the average american does not understand that percentage of the gdp. in our calculations, has not been, mr. chairman, widely accepted the that it is in the range of $1 trillion. >> yes. on $0.30 trillion -- $1.30 trillion. so one-half of 1% would translate into $1.30 trillion. >> ok. i think it is pretty clear, as we go forward, we will have a slowed economic recovery because we helped all the states for two years with massive infusion of money into the states that people do not ordinarily see,

such as medicaid spending as well as education. we enacted a health care bill that, from a physical standpoint, does help the economy -- from may fiscal standpoint, does help the economy of close to $1 trillion in the next 10 years. so let me conclude by asking you -- now, if you would -- let's get a fine point on this on social security. we went through a long discussion of that with one of the other senators earlier. what is it that is happening in or about the year 2007 with social security that we need to underscore. -- underscore? >> the social security trust

fund will have redeemed all of the bonds that it holds and it will have incoming peril tax receipts that are not sufficient to pay the benefits -- incoming payroll tax receipts that are not sufficient to pay the benefits under current law. the full benefits could not be paid without some action by congress and to increase the money going into the trust fund or reduce the benefits being paid out. >> ok, that is 26 years down the road. what will happen 10 years down the road with social security? >> there are increasing numbers of beneficiaries. at the end of the decade, there will be about a third as many social security benefits as there are today. that will increase benefit payments.

but there will be enough money coming in and money in the trust fund. actually, there is a picture on the back of the outlook shows the path of the social security trust fund. if you want to check, it is on page 123. the trust fund, and our estimate, the trust funds together will be running a surplus at the end of the decade, including the interest payments they receive from the treasury on the bonds in the trust fund. i should mention perhaps that to disability -- there are two trust funds and are legally separate. the disability trust fund will be exhausted in 2017 and we need further action to pay benefits after that. >> may i just say that we have gone beyond the time? >> i have. as you have been very generous and liberal with other members of congress, may i conclude with

this one question? >> go ahead. >> at the end of this 10-year decade, what is the effect of the trust fund of social security on the operating budget deficit of the u.s. government? >> i am not sure what you mean by operating, senator. >> the budget deficit that we are working on. >> social security, there will be a surplus, as i said, reflecting the direct flows from payroll taxes and benefits, but also interest payments to the rest of the government. including interest payments, social security will be in deficit. the benefit payment will exceed the collection to payroll tax receipts and other courses of

revenue. apart from any interest payments from the rest of the government to the social sector a trust fund, it will be in a desperate situation. the dedicated revenues will fall short of the benefit payments promised. >> thank you. we are now past the hour of 12:30 p.m. we promised to get the director out by that time. so that would mean that senator tune would not have time to ask questions. because he is from south dakota and i'm from north dakota, that seems fair. [laughter] at least to this senator. but i am sure it does not sound fair to the senator from south dakota. the senator from south dakota is recognized. >> thank you. i welcome the opportunity to serve on this committee. there are big issues being debated here. i look forward to engaging in that debate.

i want to thank you for your service and willingness to take on another stint here in what is, under the best of circumstances, a very difficult job, but, under these circumstances, and even more difficult job. you touched on this a little bit in response to some questions already. chairman greenspan recently said that the odds of a debt crisis and the next few years is probably 50/50. i know you have trouble when define that, but what is your view? >> i think it is very difficult to make an assessment of that sort. the crisis depends not just on the existing level of debt. i think it depends on the projections of debt. in this case of some countries, it means how much that they had to roll over a short time. it depends on the willingness of foreign investors to hold the assets of this country.

and it depends most crucially on investors produce -- investors perception of what legislation is being enacted. things generally turn out badly unless they correct course. but exactly what the to pinpoint might be is beyond our analytic capacity. >> but the odds were some blogger we wait, correct? >> right. that's relative to the size of the economy and a hired gets -- debts relative to the size of the economy, the greater the fiscal crisis. >> you spoke in response to some questions about the fiscal impact and energy costs.

you talked about $100 per barrel of oil, which is what we are approximating now. that is one thing. if it were to go up to $150 per barrel, have you done some sensitivity analysis about how that impacts inflation? how much of the inflationary assumptions that you maker based upon the cost of energy? >> energy is certainly important for our projections of four overall consumer prices. it -- of overall consumer prices. it matters a little bit because some amount of the increase in oil prices and the price of energy more generally will be passed through to the cost of other goods and services in a way that it could be built into the underlying inflation process of the economy. on a year-to-year basis, the changes in the price of energy affects the household budget.

but those movements tend not to become ingrained in the inflation process. over the past two decades, the similar point can be said about the prices. it is important to household, but they do not seem to get built into the air inflation prices as they rise and fall. i don't think it is as large a risk for inflation over the long run as one might worry. >> perhaps the biggest factor impact on rates, if inflation starts to pick up, the markets will start demanding a premium pour that. and that impacts our barn costs and everything else. how confident are you in your inflation assumptions? based upon what you see globally right now, a lot of european countries and asian countries

are experiencing upticks. we saw a little bit in december, probably not as much as other places in the world. but we got to where we started having an issue with inflation. i suspect there's a correlation between inflation and interest rates and will drive borrowing costs. what is your level confidence in your assumptions with regard to inflation? >> you are right. if inflation goes up, interest rates will go up, too. that would create for the damage for the federal budget. we do not think inflation will get high. it is currently below the rate that the federal reserve seems to view as a system with their mandate for price stability. it is falling -- it has fallen a good deal in the past two years. it has been consistent with a lot of evidence that, with tremendous amount of people are unemployed and a tremendous amount of its secret is not being used, firms restrain price

increases and inflation comes down. as the economy recovers, we think that inflation will move back up, but we see no reason why it would move above the range that the federal reserve is aiming for. the fed balance sheet come as a rebuttal understand, is very large and we need to withdraw the liquidity to prevent inflation from going up. but we see no obstacle to their during that period stems from turbot -- statements -- during that -- but we see no obstacles to their doing that. >> you said that it would

include an additional $1.25 quarter. what does a 1% in interest rates add to the borrowing costs that we have today? the number i saw in the 2012 estimate is that interest will be at or exceed the amount that we spend on national security. if we are assuming that number or thereabouts, you saw a 1% increase in interest rates -- what does that do to the annual finance charges and borrowing costs for the federal government? >> if an increase occurred right now, it would not raise interest costs that much in the near term. much of the debt -- you have a fixed rate. some of the pattern that we show for rising interest rates, it rises over time. by 2015, it would be about $100 billion in that year. >> that is a one percentage point increase annually.

>> by the end of the decade, it would be about $200 billion per year. it is growing because the debt is growing rapidly. that is in addition to maturing securities. >> all right. mr. chairman, my time is expired. >> i think the senator. >> for a moment, like to follow- up on this point. i think it is very important for people to understand. in a forecast, you are trying to give us the best assessment. critical variables, your turn to give us what an assessment on growth, interest rates, rate of inflation, and how that comes together to affect federal expenditures and revenues to give us an assessment of what is happening to the deficit and debt.

many economists have told us that they do not believe the economic world is perfectly predictable with respect -- especially at the brakes. when something turns, it can turn rapidly and no forecast tends to capture that accurately. how would you assess the risk of the basic underlying assumptions in the forecast that you provided to assist your day? on economic growth and inflation and interest rates, of those three, which are you most concerned about in terms of your underlying forecast not coming true or being of some significant variants?

>> mr. chairman, i worry about all of them. enters rich or the one that can move around most dramatically -- interest rates are the one that can move around most dramatically. it is the most terrible. all three are very important to the federal budget -- it is the most variable. all three are very important to the federal budget. those are the three that we examine. i would hate to convey a sense that i am not worried about any of them. but i think the interest rates are the ones that are the most local and, given the government's fiscal position and the fiscal trajectory, they're the ones that are of the greatest risk. >> thank you for that. i think it is important that we have that on the record for the

benefit of the committee. senator sessions. >> is it not a fact that the fed is artificially keeping the interest rate low through the quantitative being? there is a limit in some haunts about how much that can utilize. >> the fed is keeping interest rates low. i wouldn't describe the current situation as any more artificial than what they normally do. they move interest rates up and down to affect inflation and the path of the economy. it is right that they have pushed interest rates down, both the federal fund rate and also the interest rates with a longer maturity they have pushed down through longer processed through quantitative easing. >> someone could interpret your testimony as saying that the

health care bill, if eliminated, would raise the deficit. under one method of accounting, perhaps that is so. but, under these circumstances, i have to say, in my view, it is not accurate. we know that medicare will be going into deficit. and they will call their bonds. it is not as if we do not know what side of this 10-year window what will happen. the united states treasury spends money on a new program and that money is borrowed from medicare and medicare, we know, is heading into default. it increases the debt of the united states. debt.creases the internal tha

it increases the overall debt of the united states. >> your correct. it increases the internal debt. i agree that medicare will redeem the bonds at some time in the future. that obligation can only be met by revenues that are available in the future. when i refer to deficit affects, and refer to my many predecessors. you're correct -- i refer to my many predecessors. you are correct. let me go back one more time to the internal debt, the gross debt. i agree with you on the effects of gross debt. the way that cbo looks at budgets, we focus on the unified budget, the debt held outside of the government and held by the

public. the initial projections of spending for medicare and social security and medicaid and so on going forward. we think that the best way to assess the current financial state of the government in terms of the immediate obligation is debt held by the public or debt net financial assets. the way to look at how the fiv government -- the future medicare payments are not lost. they appear in the projection of the spending revenues that i have shown that lead to that the debt that most of this hearing has been about. i understand that there is different ways of looking ahead pieces of the budget that may be useful to you and others for some purposes. >> is it your policy decision to

use a unified shore? is that statutory or congressionally mandated that you use a focused unified budget score? >> that began in the 1960's with the commission on budget concepts. what that commission did was that, at the time, there were a lot of pieces of the government where money was being kept track of, observe separately. i think most budget experts in the 40 some years have found that it is most effective to look of the budget of the government as a whole and assess the demands on credit markets and the crowding out the private borrowing and assessing the government's fiscal production. it does not mean all those people have been right, but it has been the standard in place. >> it has been standard and you have made clear how you accounted. i am not criticizing you.

>> we have a budget responsibility in this committee. we understand that economists look at this and they prefer looking at it on a unified basis. the problem of leads to use, when you look at this from a budget perspective, that alters your view. the hard reality is that all of this debt has to be serviced. and it has to be serviced out of current income. the frustration that some of us have had and that the press tends to focus on is the unified concept. we understand that. that is what affects overall borrowing by the government. on a unified basis, when you look at everything coming in and everything going out, that is a unified basis. the problem that we run into in

a budget context is that those bonds that social security holes that are not real assets, the redemption of those bonds can only occur out of current income. what has been happening from a budget perspective is that the general fund has been borrowing from social security and we borrowed well over two dollars trillion. that money has to be paid back. how will it be paid back? it will be paid back by the other general expenditures of the federal government being reduced to make way for the payments we have to make on those bonds. so it has a very specific and dramatic impact on budgets. we have been joined, in effect, a subsidy from the social security trust fund of several hundred billion dollars per

year. that is about to change. in fact, it will change. i want to correct something i said earlier. alice working on the old forecast that social security -- i was working on the old forecast of the social sure you would go cash-in five years. but it has gone terminally cash- no negative now. >> yeas. >> instead of having several hundred billion dollars a year coming in from social security that we could send somewhere else, those days are over. those days are over. >> yes. the bonds held in the social to treat trust fund and those in the hospital veterans trust fund are much less than the

future obligations. that's why we say that they will swap their resources at some point. so the projections we do for spending for social security and medicare under current law capture all of the benefits that would be paid under current law. in that sense, the gross debt you're talking about is only capturing a subset of the future obligations. if you look at our projections for total spending and total budget deficit over a decade and beyond, it does not just those for which there are bonds tucked away. and there are things in gross debt that may not reflect future obligations. it is not just social sector across. that is a big part of it. there are two $0.30 trillion held by other government $2.3unts -- there are two 0. trillion held by other government accounts.

>> again, we recognize the professional job that cbo does. and we respect that there has to be an independent scorekeeper in your id. we also know that these things -- >> all we have got. >> yes. we know that these are based on assumptions and up to make assumptions about growth, inflation, an interest-rate. and we know that they will all be wrong. there will be wrong because we can look back in history that they have been wrong in the past and are likely to be wrong going forward. but they're the best and most professional estimates that we can have the time and that really has to be what governs our decisions. let me just conclude by saying

that i think we will leaneeded o focus more brilliant talents and their budgetary effects longer- term at some point. i know we do not have the schedule at this point. i will talk with senator sessions about this. there is so much misunderstanding, i find, in the general public and in the news media with respect to the liabilities of the united states. i think we may need a hearing just on that. a lot of new members that make them understand how these funds flow and how the budgetary impact far, as well as other economic impacts. with that, thank you very much. >> thank you. >> we stand adjourned.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] .

>> i have never believed that the budget committee -- the actual authority we have the fits very well to that task of a long-term plan to get the deficit under control. we do not have the requisite authority. but, you know, who else is going to do it? i know there are some press reports that i criticized. i am not criticizing the president. i am just working with reality. to me, " would be the most of

effective is to have some kind of negotiation -- the third problem of the budget is the president never get the resolution. it is a congressional document. ultimately, the president has to be at the table because he can veto legislation. maybe, with all of that said, -- you know, i have been really trying to think of a way to get for a the bodyy a plan debate that needs to occur. what is a way? that is why i made the comment that i did.

i do not have a more formal plan. however imperfect the institutional boundaries are here for the budget committee to take this on, maybe we are just going to have to do it. >> a are you frustrated by a lack of ideas? you wanted a budget summit, and you seem to be proposing this because nobody is a bleeding in it. biting it. >> yes, but this is not a criticism of the president. i think the president made a quite clear that working at it discretionary spending is now going to get us where we need to go. that the kind of comprehensive plan that was laid out by the

fiscal commission is what is required, looking at both the spending side, and not just non- defense and discretionary spending, because that is such a small part of the budget. we have to look at all the spending of the federal government, and we have to look at the revenue side of the equation. while the budget committee, because of the authority of this committee is really not well positioned to come up with a comprehensive multi-year plan of the type that is needed, who else is going to do it? that is the frustration i have. institutionally, of the way things are structured here, we do not have a mechanism, we do not have a place that really has the authority to deal with the

kind of multi-year, long-term plan that is required. so, i am struggling with this myself. >> have you talked to other congressional leaders about a solution to this? >> no, i have not. >> can you talk about the legislation you are working on? you guys are very close to introducing this. >> no, i do not think that would be fair. getting distracted a -- getting this drafted and scored is a large undertaking. we are a long ways off. >> [unintelligible] >> and different people might be

talking about different things. one track is to get the commission report and a legislative forum so it could be considered. that is one track. there is another track to have a feel safe trigger that would be pulled that would have automatic effects if congress is not putting in place a plan that gets us back on firmer ground. that is something that can be prepared more quickly. that is not nearly as involved. >> can you explain that a bit more? >> it is not agreed to. >> would that be in tandem [unintelligible] >> i am workshopping ideas. ok, i got to go.

>> can you talk about the consequences [unintelligible] y >> of the federal government -- the rest of the budget which has been getting in flows from show so security -- from social security, that has stopped. that is a cash drag on the rest of the budget. i have to go. thank you. >> thank you, sir.

the presiding officer: without objection. so sorded. mr. harkin: madam president, i ask unanimous consent that hal halliday be granted privileges of the floor for today's session. the presiding officer: without objection. mr. harkin: madam president,

exactly 16 years ago in january of 1995 for the first time in eight years i found myself as a member of the minority party here in the senate. at the beginning of that corntion republicans outnumbered democrats 53-47. the exact same majority-minority ratio that existed today, just in reverse order. even though i was opposed at that time to the majority party's agenda, i introduced legislation to change the senate rules regarding the filibuster. my plan would have ensured ample debate and deliberation, which i always hear is the stated purpose of the filibuster, but it would slays allowed -- but it also would have allowed a bill or nominee to receive a "yes" o. "no" vote. my proem proposal didn't pass. i first proposed this at a conference of our democratic senators that was held in 1994.

and because at that time i saw -- understand a predicted and it is in the "congressional record" -- i predicted at that time that there was an escalating use of the filibuster that was being used not for debate purposes, not just to slow things down but to actually provide for a veto of pending legislation by the minority. i predicted at that time if this arms race were not nipped in the bud, it would escalate, because it had been escalating since the 1980's. democrats were in power. republicans would have "x" number of filibusters. and then when the republicans were in power, the democrats would do the same to the republicans. and the republicans would come back in power, and the democrats would do the same to them, and back and forth. but each time it escalated.

escalating arms race. i predicted at that time if we didn't do something about it, it was going to get worse. unfortunately, my prediction became all too true. in the intervening years because of the extraordinary use of the filibuster the ability of our government to legislate was saoefl jeopardize -- severely jeopardized. 16 years after i introduced my proposal it has become more pwaoerpbt must -- apparent we must reform the use of the filibuster. there are some who say senator harkin would not be doing this if he were in the minority. i repeat, in 1995 when i was a member of the minority party, i first introduced my proposal. the truth is in the future, whether the chamber is controlled by democrats or republicans, i will continue to work to accomplish a couple of things. one, to provide that there is -- if there's going to be a filibuster, that it's a real

filibuster. that the filibuster is used to slow down processes, to give the minority ample time to debate and discuss and to amend. but in the end, the majority rule must come to the united states senate. madam president, i thank senator schumer and senator alexander for the effort they made to negotiate a package of badly needed reforms. of course eliminating secret holds is long overdue. it's wrong not only for the majority to block the minority from action, but too often without accountability. and eliminating low-level branch executive nominees i think is a meaningful step. while i fully support these steps they are far from the

meaningful reforms i think are essential to make the united states senate a properly functioning legislative body. keep in mind, we are a legislative body. the filibuster was once an extraordinary tool used in the rarest of instances. across the entire 19th century, there were only 23, 23 filibusters. from 1917, when the senate first adopted rules on this, until 1969, there were fewer than 50 that whole time span, less than one a year. during the 104th congress, in 1995, when i first introduced my resolution, there were 82 filibusters. but it was not until the 110th and 111th congresses that the abuse of the filibuster would spin wildly out of control. in the 110th congress there was an astonishing 139 motions to end filibusters. when the 111th congress ended there were 136, 275 filibusters

in over four years t. has spun out of control. this is not just a cold statistic of 275 filibusters. it means that the filibuster, instead of a rare tool to slow things down, has become an everyday weapon of obstruction, of veto. on almost a daily basis one senator is able to use just the threat of a filibuster to stop bills even coming to the floor for debate and amendment, let alone a final vote. just in the last congress the filibuster was used to kill many pieces of legislation that enjoyed majority and often bipartisan support. the reality is because of the way the filibuster is abused today, the minority -- the minority -- has unchecked veto power over public policy.

when i say minority, i don't say republicans. i say the minority. it could be the democrats, it could be the republicans. think about this, we are a legislative body elected by the voters of this country every six years to legislate, to pass legislation with the house to send it for the president. or to defeat legislation one way or the other through our votes. but it would seem to me that reason alone, reason alone would suffice it to say that legislation should be able to be passed with a majority vote. that's not what's happened in the senate. the power to pass legislation has been given to the minority.

reason alone would dictate that there's something inherently wrong and inherently unconstitutional about this. as james madison noted when rejecting a supermajority requirement to pass legislation, here's what james madison said -- and i quote -- "it would no longer be the majority that would rule. the power would be transferred to the minority." unfortunately, madison's prediction has come true. we are the only democratic body in the world, and i challenge anyone, i challenge anyone to contradict me on this with proof. we are the only democratic body in the world where the minority, not the majority, controls. in today's senate, democracy -- democracy, democracy, to which we all claim to be such strong supporters of, democracy is turned on its head.

the minority rules, the majority is blocked. the majority has responsibility and accountability but lacks the power to govern. the minority has power but lacks accountability or responsibility. this means, as we have seen recently, that the minority can block bills that would improve the economy, create jobs, and then turn around and blame the majority for not fixing the economy. the minority can block popular legislation, then accuse the majority of being ineffective. again, i want to note when i refer to the minority here, i'm not saying republicans. i'm saying the minority. both parties have abused the filibuster in the past, and both will absent real reform, abuse the filibuster in the future. the republicans are currently in the minority, there is no question that control of this body will change again at some point as it always does periodically. some have argued that filibuster

reform is nothing more than a -- quote -- "power grab by a democratic senator reacting to the recent elections in which his party lost seats." i've heard that said. well, it's true that it is now harder for either party to obtain the 60 votes needed to pass legislation. but i want to make clear that the reforms i advocate are not about one party or one agenda gaining an unfair advantage. it is about the senate as an institution operating more fairly, effectively and democratically. i want to repeat again that i first introduced this in 1995 when i was in the minority. as we say in law school, in the court of equity, i come with clean hands. the truth is as it's situated right now, with republicans controlling the house, any final legislation will need to be bipartisan with or without a filibuster. let me also say again here that

for a bill to become law it has to be passed by the house and the senate in the same form. in the same form. and then it must go to the president. the president can veto it. then it takes two-thirds vote to override a veto. a lot of checks and balances out there. a lot of checks and balances. so the need for the check on legislation by the minority with the ultimate power to veto that is not needed. not needed. in fact, inimical. inimical to a democratic institution. it was former republican majority leader bill frist who said when he nearly shut the body down over the use of filibusters to block a handful of judges, again by democrats, here's what former leader bill frist said -- quote -- "this filibuster is nothing less than a formula for tyranny by the

minority. for tyranny by the minority. further, i want to make it clear that it's not those of us who seek reform who are engaged in a power grab. it is those who insist on hanging on to an antiquated rule that are grabbing for power. it's those who have taken an extraordinary tool once used sparingly to ensure ample debate and deliberation and turned it, turned it into a monstrosity, destroying the power of the majority to govern, turning over effective control of the senate to the party that failed to elect a majority of senators. that's the real power grab. that's the real power grab. moreover, despite the dire predictions of opponents of reform, filibuster reform does not mean the end of minority rights in the senate.

senators of all parties will continue to have ample time to make arguments, attempt to persuade the public that a majority of their colleagues. the reform proposals that are being considered fully protect the rights of the minority to full and vigorous debate and deliberation, maintaining the hallmark of the united states senate. republicans presently have stated that the filibusters were necessary because democrats employed a procedural maneuver to deprive them of the right to offer amendments, this so-called filling of the tree. not withstanding the rejoinder that republicans' use of amendments, such as offering amendments totally unrelated to the pending matter -- and there again this is when you get into the chicken and egg, who did it first to whom. nonetheless, i am sympathetic to the argument. the argument that the minority

ought to have the right to be able to offer amendments. that's why i've included in my resolution guaranteed rights to offer germane amendments -- germane amendments, germane amendments -- not an amendment dealing with something totally unrelated to the legislation on the floor, but to offer legitimate germane amendments which the minority feels would improve or change to the minority's liking whatever legislation, amendment or bill might be on the floor. too many people, i believe, confuse minority rights with minority winning. having the right to debate and to deliberate and to offer amendments does not mean you have the right to get your way. being allowed to vote on your amendment does not mean you have the right to win the vote. the minority does not deserve the right to prevail in every

instance. if the minority can obviously convince some of the majority to join them, then they become the majority on a given issue and a given amendment. and that used to happen all the time around here. there's nothing wrong with that. but the minority, i submit -- the minority, i submit does not deserve the right under our constitution nor under any reasonable interpretation of a democratic legislative body, they do not have the right to systematically block action by the majority and to veto, to have veto power over what even can be considered on the floor of the senate. the fact is provided that the minority is vested with ample protections, as it is in my proposal, and that the end -- at the end of ample debate the majority should be allowed to

act. what is so radical, what is so strange about the notion that in a legislative body, the people's representatives should vote up or down on legislation or nominee? as senator henry cabot lodge stated many years ago -- quote -- "to vote without debating is perilous. but to debate and never vote is imbecile." to vote without debating is per willous. -- is perilous. but to debate and never vote is imbecile. i think at the heart of this debate is a central question that we're not coming to grips with. do we really believe in democracy? do we really believe that the issues of public policy should be decided at the ballot box and not by the manipulation or

procedural rules? i think the truth is both parties appear to be afraid of majority rule, afraid of allowing a majority of senators to work its will. at its heart, those who hang on to this outdated rule, those who vigorously oppose the majority having the ability to govern, i believe fear the american people. they fear the american people. they fear that the people's choices and wishes will be translated into action here in washington. the central question, i think, for this body is very clear: do we or do we not believe in democracy and majority rule?. elections should have consequences. as ample protections for minority rights, the ma report party in the senate, whether

democrat or republican, duly elected by the american people, should be allowed to carry out their agenda and be allowed to govern. should i be opposed to reform of the filibuster because i'm afraid that republicans someday will become the majority party in the senate and proceed to enact their agenda? no. i believe in democracy for republicans and democrats alike. i believe in majority rule for republicans and democrats alike. the distinguished minority leader a week or so ago said, in regards to our proposal, said, you know, the majority, the democrats, ought to be concerned because a couple years from now, the republicans might take over this place and we'd be able to undo a lot of the things that they did. fear, fear that somehow the

republicans will get the majority and be able to enact their agenda. i say to my friends, god bless you. if you win the election and you become the majority party, you ought to govern. now, what are the checks and balances? well, we don't know what the president will be, whether it will be a democrat or a republican. we don't know what the house is going to be. there are still a lot of internal checks and balances in the committee structure. the minority under my proposal can still slow things down. i read in the paper the other day one senator said that it ought to be the right of the minority to slow things down. i believe that. in the senate, i believe that the minority ought to have the right to slow things down. that's why my proposal provides for that. provides for that. there's sample opportunity to slow things down, throw some sand in the gear box of the majority.

but in my proposal, at the end of a period of time of eight days, the majority, the majority can govern. the majority can govern. so you can slow it down, the minority can still slow it down and slow down everything -- slow down every amendment, slow down every bill -- so compromise and negotiations would still go on. someone -- some people say well, what if in the future the tea party -- i hear that on my side -- what if the tea party gains the majority in the senate. we'll need the filibuster to stop them. i say to my friends on this side, it's a sad day in america when the only way we can stop the tea party or any other extreme group is through subterfuge, through filibusters, secret holds, and parliamentary trickery. we have to have a fundamental confidence in democracy and the

good sense of the american people. we have to have confidence in our ability to make our case to the american people and to prevail at the ballot box. we must not be afraid of the american people. we must not be afraid of how they cast their votes and for whom their cast their -- they cast their votes. i'm not afraid of the will of the american people expressed at the ballot box. that's what sent me to this chamber. i should note, it used to be the operating principle of this body but over the years, especially recently, it has become grossly distorted. now, we all have our views on the recent election of what the american people said. everybody's got a view on it. so i'll say what i think my view s. the american people spoke loudly that they're fed up and angry with washington, with government, with congress. they want change. they want an end to the

dysfunction in this city. in too many critical rairs -- job creation, immigration, energy, just to name a few -- people see a congress that is simply unable -- unable, unable -- to respond effectively to the urgent challenges of our time. madam president, my proposal's basically the same as i offered 16 years ago. it would amend the standing rules of the senate to permit a decreasing majority of senators over a period of eight days to invoke cloture on a given matter. so again, a determined minority could slow things down for eight days. senators would have ample time to make their arguments, attempt to persuade the public and a majority of their colleagues. this protects the rights of the minority to full and vigorous debate and deliberation. again, maintaining the hallmark of the united states senate. at the end of ample debate, however, there would be an up-or-down vote on an amendment,

a bill, a nominee. my proposal would restore a basic and essential principle of representative democracy. majority rule in a legislative body. i also think there's another advantage. i think it would lead to greater compromise. many have argued that it's the filibuster that forces compromise and collaboration. i disagree. the fact is, right now the minority has no real incentive to compromise. why should they? if they can totally block something and then go out and campaign on the message that the majority just couldn't get anything done? so again, the minority has a great deal of power but zero incentive really to compromise. i think my proposal would encourage a more robust spirit of compromise. if the minority knows that at the end of the day, at the end of eight days that 51 votes will

be enough to bring a bill to the floor or to end debate on an amendment or a nominee, it would seem to me that they would be more willing to come to the table and compromise. and for the majority -- for the majority, the reason to compromise is because for the majority party in the senate -- and i say either one, democrats or republicans, whoever's in the majority -- one of the most valuable things is time. allocation of time here in the body. so the majority always wants to save time. so rather than chew up eight days on a nominee or amendment, the majority would like to get it done in a day or so. the minority, knowing that at the end of eight days, 51 votes can pass something, would say well, maybe we ought to compromise now and get what we can out of it without dragging it out eight days.

right now, there is literally zero, zero incentive to compromise. i also strongly encourage my colleagues to support the talking filibuster proposal of senator merkley's. they claim it's about silencing the minority. but the fact is, the filibuster today has nothing to do with debate and deliberation. it's used to prevent consideration rather than to serve to ensure the representation of minority views and to foster deliberation. the minority uses the filibuster to prevent debate and deliberation. the filibuster has been used to defeat bills and nominees without their ever receiving a discussion on the floor. so the world's greatest deliberative body, the senate, has now become the world's greatest nondeliberative body. i think a "yes" vote today on a vote for reform, for change and for a government that can effectively address our nation's challenges is a vote to move

ahead. it's a vote for progress. or you can vote for continued gridlock, continued obstruction and broken government. this body, madam president, does not function the way it's supposed to. to be sure, the founders put in place a system of checks and balances that makes it enormously difficult to enact legislation. as i said, it must pass both houses of congress. first of all, it's got to go through committees, pass both houses of congress, go to a conference committee, then it goes to the president and he can veto it. and then it can be challenged in court. all very significant checks. now, one last -- a couple of last things. i often hear opponents of reform claim what i'm proposing would turn the senate into the house of representatives. turn it into the house of

representatives. because at the end of the -- end of eight days, there would be 51 votes could move something. i ask my friends, when did the senate become defined by senate rule 22, which is the filibuster rule? i thought the senate was defined in the constitution of the united states. rule 22, the filibuster rule, is not the essence of the senate. regardless, the senate will continue to be totally different from the house. we have two senators from small states, two senators from large states. we're elected every six years. we have sole jurisdiction over treaties, impeachments. and the senate operates, as we know in so many instances, based on unanimous consent. and that will continue. that will continue. so the power of one single

senator renien remains to objecy unanimous consent request. so eliminating the filibuster will not change the basic nature of this body, not the constitutional structure of the united states senate. for most of the senate's histo history, there were very few filibusters, at most, one or two a year. can someone suggest that the senate of henry clay or daniel webster, lyndon johnson, everett dirksen, that that senate was the same as the house of representatives? i mean, even in my short time here -- i've been here now, what, 26 years -- we used to have amendments on the floor that we would debate and vote. and if you got 51 votes, you won. we don't do that anymore. under the present structure of the senate, under the present

rule 22, the way it is being used today, every measure that passes the senate must have 60 votes. whatever happened to the idea of majority rule? now you have to have 60 votes. and i've heard some say that, well, if you have to have 60 votes, this encourages compromise to get to the 60 votes. well, i'm all for compromise. i've brought a lot of legislation to the floor in my time here. some have been adopted 100-0. farm bills, appropriations bills, others that i have brought to the floor, both as a majority -- in the majority party and in the minority party, as the ranking member on a committee, and we didn't need 60 votes.

if someone offered an amendment, they had the right to offer an amendment and get 51 or 52 or 53 votes and win. i have never -- i have never stood at that desk, either as a committee chair or as a ranking member and insisted on i a bill that we had on the floor, that it had to have 60 volts in order t -- 60 votes inorder to pass at that is what has happened now in the senate? some say, well, that promotes compromise. but anybody, anybody that has a bill or an amendment, wants to get the most votes possible, right? so you want to get more votes. it's the very nature of legislation. but sometimes, sometimes there is a bill or an amendment that does not lend itself to easy compromise. it may be contentious.

and you have to take a hard vo vote, and maybe it only gets 51 votes. should that amendment go down to failure because it got 51 or 52 or 53 or 54 or 55 or 58 or 59 votes? go out and explain in to the american people. go out to your next town meeting and say, no matter what happens, you got -- you can't pass anything with 51 votes. you have to have 60 votes to pass anything in the senate. giving the minority the right to veto anything. you see how you're -- see how people react to that. i think if they understood it, they'd say, it's nuts. we all stand for election. every six years, if we only get 52% of the vote, maybe we shouldn't be here because obviously there was no consensus among the people who vetted for us that we should represent them if at the -- who voted for us that we should represent them if

we didn't get 60% of the vote. is that what's coming, that if we don't have 60% of the votes we shouldn't serve in the united states senate? i'm taking that to the extreme. but it boils down to the essence of what we're saying. without adopting the reform of the filibuster is that, yes, we as a united states senate believe that a minority has the right to veto anything in this senate. i would much rather be on the side that says the minority has a right to slow things down, the minority has the right to debate, the minority has the right to amend, and the minority has the right to win those amendments with 51 votes, but the minority should not have the right to veto and stop legislation. that's what my proposal does. adequate time for debate, adequate time for amendments,

ensuring that the minority can offer an amendment, but in the end, the majority would rule. it was never intended, never, never, never intended that a supermajority of 60 votes would be needed to enact any piece of legislation, any amendment or confirm any nominee. indeed, the framers of our constitution were very clear about where a supermajority was required. there were only five in the original constitution. ratification of a treaty, override of a veto, votes of impeachment, passage of constitutional amendment and expulsion of a member. it may come as a shock to many people, but the filibuster is not in the constitution of the united states. in fact, historically, the first senate when it met included a rule that permitted the majority to end debate and bring a measure to a vote with a majority.

it was called the -- voting the previous question. but they had the right to do that. it was done away with by aaron burr, then-vice president of the united states. we know what happened to him. but that was done away with. and so the senate embarked upon almost 100 years, a little over 100 years of really having no rules, but then, again, the senate didn't do much. they really didn't do much. however, in the 21st century, as a major superpower, with things happening with lightning speed around the world, we have to be able to react a little more rapidly than what we reacted in the 19th century. moreover, reform of filibuster rules stands squarely within the tradition of updating senate rules as needed to foster an effective government that can respond to the challenges of the day.

the senate has adopted rules that forbid the filibuster in numerous circumstances, such as the war powers in the budget. think about that. for some reason, the senate at some point in time said you can't filibuster the budget. imagine that. you can filibuster other things, you can't filibuster the budget. how about the war powers act? what could be more important than whether or not we go to war or not, a power granted to the congress by the constitution, but you can't filibuster. think about that. so we have rules that forbid the filibuster, we have passed four significant reforms of the filibuster since 1917. today, unfortunately, it has become abundantly clear that we cannot govern a 21st century superpower when a minority of 41 senators can dictate action or inaction to a majority of the senate and a majority of the american people.

a majority of the american people. we had a bill here last year that was called the disclose act. the house passed it twice overwhelmingly, sent it to the senate. now, what did the disclose act say? all it did is it said that the supreme court decision in citizens united that allowed corporate money to be fund into campaigns, to defeat or support an opponent, and did not have to be accounted for did not have to be made public. many people suspected that there was foreign money coming in through various sources to influence campaigns in the united states because they didn't have to report it. so the bill came through that didn't overturn the supreme court decision, just said that

if you're going to do this, you have to disclose where you got the money. it passed the house. polls show that it was supported by well over 80% of the people, the majority of republicans and democrats around the country. it came to the senate twice. 59 votes. it got 59 votes. why isn't it law today? because you need 60 votes, 60 votes. go back and explain that at your town meetings. go back and tell them that we don't have that today, we don't have that sunshine law because you need the 60 votes even though we got 49. this is not the kind of representative democracy the founders envisioned. it's not the kind of representative democracy that our sons and daughters have fought and died for for over 200 years.

how many of our young men and women in uniform today risking their lives in afghanistan, iraq or around the globe, how many of them know that they're risking their lives for minority rule, for minority rule, not majority rule, minority rule? very few, i submit, very few. it's time to end the paralysis, the drift and the decline here in the united states senate. yes, let's commit ourselves to debate and deliberation. nothing wrong with that. nothing wrong with extended debate. and there is nothing wrong with having compromises, but there come times when maybe a compromise is not in the cards, but should that mean you can't vote on it, i say to my friends? should that mean that if you can't get 60 votes, you don't

even deserve to have a 51-vote or 52 or 53 votes? is that what we're saying? i -- i've heard my friends on the other side, i think i heard heard -- i don't know exactly who it was earlier today say well, the 60 votes really promotes compromise. i'm all for that, but what if you can't get the compromise, i say? then are you saying you can't have a vote because you can't get 60 votes? that's in essence what they're saying. it is not the bedrock of democratic principles to deny the majority to rule to finally take a vote. so there may be a lot of misinterpretations of the amendment that i'm offering. oh, it's going to make us like the house. nonsense. it's going to take away minority rights. nonsense.

it's going to take away the right of the minority to slow things down. nonsense. what my amendment does is finally -- it says finally at some point in time, we're going to exercise our constitutional obligation. and i will close on this. every six years, we elect when we go down here and we hold up our right hand and we swear an oath, we swear an oath to uphold and defend the constitution of the united states against all enemies foreign and domestic and to bear true faith and allegiance to the same. i submit, madam president, that we are not living up to our oath of office, in terms of bearing true faith and allegiance to the constitution when on the other hand we enact rules that deny the majority the right to

govern. when we deny the majority the right to govern. so i -- i say, madam president, every senator has a lot of power here. the power of a senator comes not from what we can do but from what we can stop. i've often said that's kind of the dirty little secret of the united states senate. well, i think it's time for each of us to give up a little bit of our power, to give up a little bit of our power for the good of the country. to give up a little bit of our power to be able to stop something in order that the majority, whoever that majority may be, can carry out their be agenda on behalf of the american people. i do not fear, i do not fear the

voters, i do not fear the ballot box. what i fear is that this senate will continue to be dysfunctional, it will not be able to act, we will continue to drift. we will not be able to respond to the exij yen sis of our -- exigencies of our time. the american people will get more and more frustrated and disappointed in the workings of our government, and the end result will be a decline in america. so i -- look, i'm not pollyannish. i know that none of these proposals will succeed. it takes 67 votes, they say, to change the rules of the senate. madam president, i believe that is inherently unconstitutional, unconstitutional. can one congress bind another? can one congress bind all future

congresses? can one senate bind all future senates? can one senate in a moment of time say that you need 90 votes to pass anything here because 90 members happen to be of one party, so they enact a rule, they say you've got to have 90 votes to change any rule, knowing it will probably never happen again. as senator byrd said one time -- i know he is being quoted a lot around here today when it comes to these debates. he said -- quote -- "we should not be bound by the dead hand of the past, the dead hand of the past." i believe it is the inherent right of the senate to change its rules by a majority vote at the beginning of any congress. that's what it says in the constitution. each, each house shall make its rules. it doesn't say each house makes

its rules and every succeeding house must abide by those rules. they didn't say that. so, madam president, i think what we're really left with is we are left with a situation where the senate, where the senate cannot live up to its constitutional obligation. i think it is almost inherently impossible for the senate to do so. and therefore i think that we must now have to look to the courts to provide some relief in this matter. just as the supreme court decided in baker v. carr that legislatures could not reapportion themselves, and so therefore they found it unconstitutional.

i, quite frankly, think a case could be made to the courts that the senate rules as they are now applied with the 67-vote threshold prevents me, a senator from iowa, prevents a senator from georgia, prevents a senator from oregon from fulfilling his or her constitutional obligations to their constituents, to the people who elected them to try to get legislation passed on a majority basis. so, as i said, i'm not pollyannish. i know where the votes are here today. i know that my proposal won't get many votes. it didn't get many in 1995 either. people say well, harkin, why are you doing this? why do you do it when you don't get many votes? i do it because i believe in it. i believe with all my heart and all my soul that the senate is

not operating constitutionally right now. so i feel that this fight must continue. and, as i said, madam president, i now come to that point in time where i feel that perhaps we must look to the courts for their decision on whether or not the senate is capable ever of fulfilling its constitutional responsibilities and obligations. so i hope that we don't have to go there. i hope that we could adopt some of these reforms such as the merkley amendment or my proposal quite frankly, the essence of it is the proposal by the senator from new mexico. that is the heart of it. can a majority of the senate change its rules at the beginning of a senate?

i believe it is constitutionally not only permissible, but i think we are obligated by the constitution every two years to adopt the rules of the senate by a majority vote and not by 67 votes. so i -- i close my part of the debate by appealing to the conscience of our senators to think about majority rule, to think about rights of minority, but to think about the rights of the american people to have their voice heard here by a majority vote -- by a majority vote and not by a supermajority. i believe that's our constitutional obligation. madam president, i yield the floor. the presiding officer: the senator from georgia's recognized. mr. isakson: madam president, i

rise briefly to address a few remarks made by the distinguished senator from iowa and to compliment my colleague from tennessee. first, all these talks about our founding fathers and the constitution, if our founding fathers had not intended supermajorities to pass -- why would two-thirds have to -- three-fourth of the staff have to vote to ratify one. if they had -- if our founding fathers not intended minority representation to exist i wouldn't have two senators like california or like everybody would have proportionate number of senators. and finally with regard to the question we're the only democracy in the world to have a rule where majority rules, the fact of the matter is that may be true. we're also the richest, safest, most prosperous democracy in the world, and that has to do with how we govern ourselves. i wanted to make those three points, if i could, i wanted to congratulate senator wyden,

senator mccaskill and senator grassley to make sure that we have total transparency. i think that is right and that's exactly what the american people would express. and, lastly, i want to thank the senator from 10 attend the senator from new york. i think in the last few weeks they've done a lot of work, yeomen's work to make sure that this senate doesn't rush to judgment. the senate in the end is all about senators putting their shoulder to the grind stone and making things work. i think in this case there's no question that senator alexander has done exactly that and i want to compliment him on his work and yield back the floor.

a senator: madam president? the presiding officer: the senator from new mexico's recognized. mr. udall: thank you, madam president. and -- and i -- i want to thank all the senators who have come down on this debate and these are just a couple of cleanup house keeping things that i'm doing. first of all, the charge was made that we're trying to make the senate like the house and rather than get in a long debate there, i would just ask unanimous consent to put federalist paper 62 and a letter from a number of scholars that testified before the rules committee. i ask unanimous consent to put those in the record. the presiding officer: without objection, they'll be included in the record. mr. udall: and i have also -- have a full statement on this particular issue and others have a full statement that answers that specific charge, the senate

and the house, and i ask that full statement be put in the record as if read at this point. the presiding officer: without objection, the statement will be included in the record. mr. udall: and then there was also the -- to the first -- to the first u.c. with the federalist paper there was also an additional statement that -- to back that up. i ask unanimous consent to put that in. the presiding officer: without objection, included in the record. mr. udall: madam president, we're at this point in the debate, the concluding point in the debate where i think it's very appropriate to just thank staff. my two staff members that have worked the hardest, all my staff has worked very hard on this, but matt nelson and tim woodbury deserve individual recognition for their tireless work on this. i know, as a result of this, we put a lot of pressure on the rules committee, jean borderwich

and her crew has done a good job and the parliamentarian shop we've had great assistance from them in terms of answering questions and working with them. so i would applaud allen and all of the parliamentarians. at several places in the record, a variety of different items were mentioned. and to clarify the record, i ask unanimous consent to insert in the record a "new york times" editorial from january 25th, that's the first one. the second one, a harvard law and policy review article that i authored, number three, quotes from -- from constitutional scholars an conservative -- and conservative scholars and number four, an op-ed from "the washington post" entitled "fixing broken senate rules." the presiding officer: without objection, they'll be include

ntd record. mr. udall: -- included in the record. mr. udall: and then, finally, i just want to thank again our leaders here, lamar alexander, chuck schumer have done a remarkable job in terms of negotiating. leader reid and leader mcconnell have made a decision which was announced earlier today and that decision was to change some of the rules to let us vote on some changes to the rules, and also i think one of the most significant things, and i know senator alexander has mentioned this is to try to change behavior. and more than anything i think that could be very significant as they have talked and said we'd like to do this differently, we'd like to get back to the senate functioning where we bring things up, we debate them, we allow robust debate, we allow the amendment process to work forward and as -- as i know senator

alexander said at one point in his heritage speech, the senate is a shadow of itself well. , that -- we want to get back to that the senate with that robust debate and amendment. and i think both sides have tried to pull that together. so, with that, i would just say i hope -- i very much hope that this is a -- a new day in the senate as a result of this, and, with that, i yield the floor. the presiding officer: the senator from tennessee is recognized. mr. alexander: madam president, i've earlier congratulated senator udall and i -- i have earlier congratulated senator udall and wyden and merkley and -- and senator harkin for stimulating a good, full discussion about two objectives, one, how do we make the senate the best possible place to deal

with serious issues that come before our country because we have plenty of them right now starktsing wit -- starting withr national debt and the high unemployment rates. they've done a good job of that. they have led us to adopt two important steps. one having to do with secret holds, another having to do with -- with taking time away that might otherwise be better used by reading from the -- by having the clerk read an amendment. it's also produced a couple of other things, one is a -- the broader support we've had in a number of years on dealing with the persistent problem of the difficulty a president has in staffing the government. senator reid and senator mcconnell, when they were whips, tried deal with this. we had three bipartisan breakfasts on this working with

the white house two years ago. senator lieberman and senator collins, who are the committee chairs, have tried to deal with this and we have all failed so far. but senator schumer and i will be introducing a bill and will have the support of the leaders, senators mcconnell and reid, and -- and it will have the active involvement of senator lieberman and senator collins and what we hope to do is two things, one is reduce the number -- senator harkin spoke about this a little earlier, he's a chairman, he's been a ranking member and a chairman. he's basically saying, we don't need to spend our time here. -- here having senate confirmation of hundreds of boards and commission members and the p.r. official for some department. we ought to focus our attention on jobs and debt and terror and the issues that affect the american people. and perhaps we can deal with that. and the second thing we should

do is to end this practice of -- of -- of making it so that citizens who are invited by the president of the united states to -- to serve in our government, to become innocent until nominated. we drag them through a maze of -- of conflicting forms, many of them created by the executive branch, many of them created by us that trap them an trick them and embarrass them and it's surprising anybody will accept -- accept the opportunity. i remember majority leader howard baker was nominated by president bush to go to japan, everybody said it, knew him very well. he was voted most admired senator by senators on both sides of the aisle, cost him $250,000 to fill out the forms so he could be the ambassador to japan. i could give many examples of this. washington, d.c., is the only

place where you hire a lawyer and accountant and ethics rosser before you find your house and put your kid in school if you come to work here. and we need good people in the government and we need to be able to attract them here and we should fix that. and i greatly appreciate the work that senator schumer, reid, and mcconnell and lieberman and collins and others have done and i hope that our colleagues will bring this in an expedited way. i ask unanimous consent to include remarks i made on march 9, 2009, entitled "innocent until nominated." the presiding officer: without objection, that will be included in the record. mr. alexander: only two other things. i want to congratulate senator mcconnell and senator reid for -- for leading us in this way. changing rules is an important step forward. i do not in any way want to diminish what i believe we're about to do here. but we need a change in behavior more than we need a change in

rules and this has caused us to talk across party lines about what we want. and i think what we want is what senator udall said as a whole. we'd like most bills to come through committee. most bills then to come to the floor. most bills then to have a chance for most senators to be able to offer most of their amendments and then to get votes. that's what we should try to do most of the time. sometimes the republicans will want to repeal the health care law and the democrats will use all of their resources to defeat it. and the democrats in the house will send over a bill to repeal the secret ballot and union elections and republicans will try to defeat that. so we'll use all our resources then. that won't be most of the time. most of the time we will be able to do our jobs better to be able to represent the people who sent us here. i hope that those who have provoked this discussion feel a sense of satisfaction about what they've don't even though i know in every case they didn't get exactly what -- what they wanted. and then, finally, i -- there is

a long response to senator harkin's excellent comments on his amendment, which he's been fighting for for 16 years, but with a couple of exceptions i'll put in the record. i ask unanimous consent to include at the end of my remarks an address i made to the heritage foundation on january 4. the presiding officer: without objection, included inned record. mr. alexander: he believes that we ought to bring every debate eventually to 51 votes. and so i would respectfully term his amendment as a sort of hang me now or hang me later. i mean, you know, eventually it's not 60 votes you're going to require, it's 51. he says that's the way it ought to be. i disagree. so do many others and i'll just cite two distinguished senators who spoke on the floor of the senate about five years ago when a number of republicans got it

in their mind that they would like to change the filibuster rule as it affects judges. this is what the democratic whip, harry reid, said then. the filibuster is far from a procedural gimmick. it's part of the fabric of this constitution that we call the senate. for 200 years we've had the right to extend the debate. it's not a procedural gimmick. some in this chamber want to throw out 214 years of senate history in the quest for absolute power. they want to do away with mr. smith as depicted in that great movie being able to come to washington. they want to do away with the filibuster. they think they're wiser than the founding fathers, i doubt that's true, said senator reid. and then another senator, the senator from illinois, barack obama. then in the majority, referring then to the republican majority, then to the majority, said senator obama, chooses to end the filibuster. if they choose to change the rules and put an end to democratic debate, then the fighting and bitterness and the

gridlock will only get worse. i would suggest, madam president, that as a result of this discussion, we preserve the senate as an institution, a forum for deliberation where minority rights are protected, but we've also taken some important steps forward or about to with rules changes to make the function better and we've reached a consensus among ourselves informally, any heway, that's represented by the colloquy placed in the record that will be placed in the record by senator reid and senator mcconnell. oology ever and so what we really want is an opportunity to represent the american people the way they since the here to do, to take these difficult pieces of legislation, bring them to committee, bring them to the floor and for us to have a chance to amend and debate and vote on nem. that would be most of the time. and some cht time we'll exercise all of our minority and majority rights to defeat a bill, because

that's all what we're sent here to do. soy thank the senators for this spirited debate and as far as i sew noi l. know, there are -- and as far as i know, there are no more speakers on the republican side. the presiding officer: the sno senator from new york is recognized. mr. schumer: thank you. i believe i am the lft speaker. preceded by months and months f serious discussion. i think every one of success better. we went through this process, we understand the senate better, we have deeper feelings about this hallowed snurks about what it has done and what it can do. and what is wrong with it as we will. and i think every one of us agree that the senate needed to be fixed and every one of us also agreed that we did a lot last year despite the fact that it was broken, and we had different paths to fix it. but fix it we must and fix it we

will. and i would just say this. obviously there are going to be some rules changes and some statutory changes. but a lot of what will make this work is the agreement, informal but serious, between senators reid and mcconnell that senator alockbox ander and i were a part of. -- alexander and i were a part of. i would say, hopefully we are opening up a bit of a new era where bills are allowed to come to the floor, except under administered circumstances, where amendments are allowed to be added to those bills except under extraordinary circumstances and there is vigorous debate. i would ask my colleagues to forebear -- it is very easy for any senator to stand up. but the spirit of this new agreement says think twice, three times, even for times before you do because that was the path that lysed to the dysfunction.

i, too, want to just once again salute my colleagues, senator harkin, senator udall, senator merkley for the great job they did, senator i woulddon and senator mccaskill and senator grassley will have a descreem of theirs neablghted into the rules momentarily. this that be a fine debate. i would hope and pray -- i don't think the talking filibuster cuts against anything my colleagues on the other side of the aisle have said. and i will going to proudly vote for that provision and maybe miracles of miracles it'll get two-thirds but at least there'll be a vote and maybe we can work towards that in the future. i also do believe that the proposal to not invoke the constitutional option for this congress and next congress gives us some time to figure all this out without closing the door on this forever because some is on

our side i know was worried about that. so let us go forward in a spirit of comity that we have seen since the lame-duck. let us go inured a bipartisan way that we've worked on these rules changes and move forward in the next few months and try to legislate in the way many of us who have been here longer than a few years used to love and enjoy and relish. if we can bring those times bark the senate will be a better place for every one of us, no matter our party or our ideology. so i thank all of my colleagues -- my colleague from tennessee, the two leaders who stepped up to the plate and the so-called young turks, some of whom have been here much