undertaking. it is the right thing to do. it's going to help our country. it's going to reestablish our patent laws in ways they should be. it is going to stop the fee diverse that's -- the fee diversion that's been going on asssuming we can get help from the house as we will. i believe we will. it is a bill that we'll have to go to conference on and hopefully perfect it even more. i am grateful to all who have been involved, and i just hope and pray that we can get this through both houses of congress and establish this monumental bill at a monumental time. it's very important in all of our lives. madam president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: mr. president? the presiding officer: the senator from new hampshire. a senator: mr. president, i ask that the quorum call be vitiated. the presiding officer: without objection. mrs. shaheen: thank you. i also ask unanimous consent to extend morning business until 5:30 p.m. with senators permitted to speak therein for up to ten minutes each. the presiding officer: without objection. mrs. shaheen: thank you. mr. president, we have now almost a 9% unemployment rate in

this country. i think the good news is that unemployment dropped to 8.9%, but it's still way too high. we have a $1.6 trillion deficit, and yet despite these enormous challenges, congress still has not passed a federal budget for this year. our deadline to pass a 2011 appropriations bill was september 30 of last year, but congress still has failed to meet that deadlines. and last week we passed our fifth -- that's right, one, two, three, four, five -- fifth short-term continuing resolution to keep the government open. at some point soon, i think maybe even this evening, i think we're going to be voting on the house republicans' package of budget cuts that i believe threaten our economic recovery. and after moving on from that,

we'll still need to pass another continuing resolution by the end of next week in order to avoid a government shutdown. now, while we're debating the short-term continuing resolutions, in china and india and germany, they're debating long-term investments in education, energy, technology and research. those are the decisions with the potential to shape the global economy for many decades to come. meanwhile here at home, we're fighting about whether we're going to keep the government open for two weeks. this kind of short-term budgeting isn't just hurting our future, it's hurting our economy today. just last week i heard from a company in new hampshire about the effects of congress's failure to pass a full-year budget. the company is called nitro

security and it's located in portsmouth, new hampshire. it's at the forefront of the emerging cybersecurity industry. even in a difficult economy over the last couple of years, they were named one of the 600 fastest-growing private companies in the nation. yet despite most of their business coming from the private sector, nitro security also has significant contracts protecting data systems at the department of defense, nasa and even the food and drug administration. they should be creating jobs and helping to get our economy moving again, but because congress can't conduct its business on time, their stalled contracts intervene they have not been -- contracts mean they have not been able to hire new workers. we are missing out on these jobs because washington's budget process is broken. congress needs to do better. in the last 30 years congress

has only completed the annual budget process on time twice. just two times in the last 30 years. that's a 7% success rate. solving our long-term deficit problems and reinvigorating our economy is going to require tough choices, but we're never going to be able to make these choices until we change the way washington does business. that's why i joined senator isakson in proposing the biepbl budgeting and appropriations act to bring sorely needed oversight and long-term planning to the federal budget process. our legislation would dedicate the first year of a congress to appropriating federal dollars and devote the second year to scrutinizing federal programs to determine if they're working and deserve continued funding. because of annual budgeting, members of congress don't have the time we need to conduct careful, thorough reviews of

federal programs, and federal agency staff are required to dedicate countless hours every year to preparing the budget and to explaining what they do rather than accomplishing critical missions. as a result, we continue to spend money on projects that are duplicative, sometimes failing, and often no longer useful. in fact, just last week the government accountability office released a landmark report on government duplication and overlap. the report reveals that in as many as 34 different areas across the federal government, agencies are offering overlapping services to similar populations. now, as we think about how we need to address our debt and deficit, we should begin by eliminating these kinds of duplicative programs. that's the type of reform we

should be considering. we should be eliminating duplication and making targeted cuts and investments in our future. we should be making investments in projects like the memorial bridge which connects new hampshire and maine and is a critical economic engine for the sea coast region of new hampshire and maine and the shipyard that is so vital to making sure that we can upgrade the ships in our navy. now even though this bridge has been recognized as a national priority and it enjoys support from the maine and new hampshire senate delegations, the project to replace the bridge is being threatened by ill-considered reckless cuts in the house of representatives continuing resolution. these are the consequences of short-term budgetary thinking.

they're penny wise and pound foolish. in another example we have in new hampshire, the bureau of prisons has recently completed construction of a federal prison in a community called burlin and it costs $276 million. as the construction was wrapping up, the bureau of prisons requested activation funding for fiscal year 2011. to hire rank and file officers and begin getting this prison ready to oefplt but because -- ready to open. because we're operating on this short-term continuing resolution, we now have a state-of-the-art $276 million prison that's just sitting vacant. we have a warden who's there who's waiting to hire staff, and the bureau of prisons needs the

1,280 inmate beds that the facility will provide. the community needs the $40 million annual economic impact from this prison. and the 340 jobs that this facility will provide. but none of these important objectives are being met because our budget process is not working. instead the bureau of prisons is spending $4 million a year to maintain an empty building. as members of congress, we're entrusted with the responsibility of spending taxpayer dollars wisely. our current budget and spending process makes it all too easy for waste and inefficiency to remain hidden and at the same time important priorities are neglected by the whims of a chaotic annual budgeting process. switching to biennial won't

solve all of our programs but would be an important step toward greater oversight, increased accountability and a more responsible government. thank you, mr. president. i yield the floor. a senator: mr. president? the presiding officer: the senator from iowa. mr. harkin: mr. president, first i want to thank my colleague from new hampshire for her great leadership about which she just spoke, and that is the necessity of moving beyond our old system of having appropriations bills every year. i have advocated for a long time exactly what she is taking the lead on, and that is every two years do the appropriations. then we can do oversight. as the senator from new hampshire correctly pointed out we don't do oversight because

we're always wrapped up in some other measure every single year. it is time we move and move as rapidly as possible to biennial budget so we can find out what's working and not working and have oversight. i thank my colleague from new hampshire for her leadership in this area. mrs. shaheen: i would -- mr. harkin: i yield. mrs. shaheen: i would thank you, senator harkin, for your efforts over the years to try and move us to a biennial budget and a process for getting a budget done that makes a lot more sense and allows us to be more thoughtful about how we're supporting programs in the federal government. thank you very much. mr. harkin: just make sure i'm on your bill, okay. mrs. shaheen: we will. mr. harkin: you're right on, and senator isakson. it is a bipartisan -- it should be a bipartisan effort. i talked to a number of my colleagues on the other side of the aisle who feel the same way as we do about this. so hopefully we can have a good bipartisan approach on this. mr. president, i just wanted to

take a few moments to talk about the budget and what we're confronting right now here in the congress. first of all, we all agree -- i think we should all agree that the deficits we have now are unsustainable. they are a drag on our economy. they jeopardize our future. they've got to be brought under control. and i am committed to finding a bipartisan approach to try to get us through this and to have this important goal of bringing the budget under control and balanced for the future. i might just say, mr. president, for the last three decades i'm proud that my party, the democratic party has been the party of fiscal discipline and balanced budgets. that may come as a shock to some people. let's review the president. when bill clinton became president in 1992 he inherited the largest deficits in u.s. history. he joined with democrats here in congress to join a balanced

deficit reduction law that resulted in the largest surpluses in history and put us on a path by the year 2000 to completely eliminate the national debt within a decade. i was here then. every single republican voted against it. every single one. likewise today president obama inherited from president a deficit in excess of, are you ready for this on one -- $1 trillion. and a deep recession that made it even worse. once again, we democrats are committed to bringing this under control and to do it in a fair and balanced way. but, as a former president once said, here we go again. in december, my friends on the other side of the aisle, the republicans insisted we extend tax cuts largely benefiting the wealthy. as $354 to the deficit this year, even more next year, then they voted to repeal the health

reform bill, which would ad add $210 to the deficit, and now these same people are shedding crocodile tears an claim to be worried about the deficit. let's be clear, there's a right way to balance the budget and there's a wrong way we can balance the budget in a way that's fair or we can do it in a way that's manifestly not fair that will deepen the gulf between the rich and poor and further erode the middle class in our country. h.r. 1, which i assume we'll be voting on here shortly embodies the republican approach to reducing deficits driven by ideology, it rules out any tax -- it holds the bush tax cuts for the wealthy to be sacred. they take a meat ax to the budget, everything from cancer research to education to safety-net programs for our most vulnerable citizens. well, we've seen this movie

before. give tax breaks to corporations and the wealthiest people in our society and balance the budget on the backs of the middle class an low income in america. these are bad priorities, they're bad policies and they're bad values. the right way is a balanced approach. this must include spending cuts. we've made cuts in my own appropriations bill buvment it also includes necessary revenue increases. while making room for vit kal investment -- kri critical investments for job creation in the future. we know this balanced budget approach can work, because i said that's what we it in the early 1990's under press clinton. we did both. we cut spending and we raised revenues. as i said, every republican voted against it. but that single act of congress and that bill signed by the president led to the largest budget surpluses and the longest

economic expansion in u.s. history created 22 million new jobs. now, h.r. 1, that has come over from the house, their approach on how to bring the budget under control will kill jobs. mark zandi, top economic adviser to senator mccain's campaign estimated that h.r. 1 will kill some 700,000 jobs. federal reserve chairman bernanke estimates it will kill 200 now jobs. nobody knows for sure. but everybody agrees on it will kill jobs. with about 9% unemployment, a fragile economy, we're just now starting to increase employment in this country, why would we ask to vote for a bill that we know that everyone agrees will kill hundreds of thousands of jobs? well, you don't reduce the deficit by decreasing unemployment. that's what h.r. 1 would do.

it would slow economic growth, drag us back into a recession, make deficits even worse. h.r. 1 slashes the entire gamut of education programs that are so essential for keeping a ladder of opportunity for a younger generation in this country. it slashes the safety net for our most vulnerable citizens, infants, seniors, people with disabilities. if you vote for h.r. 1, the house bill, you're voting to slash title 1 grants to school districts by nearl nearly $700 million. it means that 2,400 schools serving one million disadvantaged students could lose funding. if you vote for h.r. 1, you're voting to slash community health centers by about $1 billion. that means you eliminate funding for 128 clinics in 38 states. if you vote for h.r. 1, you vote to slash head start programs.

why would you want to take it out on kids? why would you want to say, we've got to balance the budget, so we're going after head start kids? that's what it does. it eliminates service for 218,000 children and their families. if you vote for h.r. 1, you're voting to slash child care. the child care and development block grant would be cut by h.r. 1. if you vote for h.r. 1, you're voting to undermine social security. people say, how is that? social security isn't involved in h.r. 1. well, it is in this way. we know because of the recession, more and more people have applied for s.s.i., supplemental security income, applied for disability. they've gone on disability or basically they've just retired. well, in order to take care of this huge increase in the number of people applying, you've got to have people that will take the cases in, review them, make

sure people are eligible, cut the checks and get the money out. well, that's called the social security administration. well, h.r. 1 cuts the funding for doing this $125 million below last year's funding level. that means that every american filing benefits this year will have to wait even longer. right now it's almost 400-and some days, that's over a year. that's over a year. think about if you're on disability, you're disabled, you can't work and file for disability claims and you're waiting a year and a half in order to even get your first check. well, this h.r. 1 would cut it even more and would probably increase waiting times up to two years or maybe even more than two years. so it really undermines the safety net of social security. if you vote for h.r. 1, you're voting to slash student aid. it cuts the pell grant by 18%

below where we are now. you might say that's not that big a deal. well, it is. i tell senators, check with two things. check with your private not-for-profit schools in your states. they do a great job of educating low-income students because they were able to utilize pell grants plus endowments, they put them together and they do a great job in every one of our states of educating really poor kids. you start taking away that pell grant, you lower that pell grant, that means a lot of kids won't be able to go to school. the private nonprofits would have to raise the tuition on other kids, that means some of them may fall and you start an escalator effect in our colleges. i just had the president of the university of iowa, president mason, in to see me today talking about one of our great universities in iowa, the university of iowa, and she told

me, president mason said a cut in pell grant would afrect probably close to -- affect close to 5,000 students at university of iowa. sometimes this is the different between whether they're in school or not in school. or it could be the difference between a pell grant or they've got to go out and borrow more money and take on more debt. if you vote for h.r. 1, you're cutting student aid. if you vote for h.r. 1, you you're voting to slash job training programs. the house bill that came over, h.r. 1, completely eliminates federal funding for adult training, dislocated worker assistance and youth training programs. completely eliminates it. these programs provide job training and reappointment services to about eight million americans every year. eight million. they just do away with it. if you vote for h.r. 1, you're voting to slash the community services block grant. well, they cut abou

about $305 million from that that provides services to some of our lowest income people an elderly. if you vote for h.r. 1, you're voting to cut investments in infrastructure, highway funding, sewer and drinking water funds, rural economic development funding because h.r. 1 slashes community development block grants by 62%. now, i say go out and talk to your mayors, talk to your city council, talk tower boards of supervisors in your counties. ask them if they can take a 62% cut in their community development block grants and what it's going to mean to them. well, mr. president, i can't but also speak to my own constituents in iowa about what this means for my own state. if h.r. 1, the house bill, which passed the house, if it were to be passed and enacted into law, well, mentioned about the cuts that we're having in job corps,

it would basically kill the dentist in iowa job corps center that employs 163 people, it provides training to 450 at-risk students and we have a new job corps center just being built and that would probably come to a screeching halt. and it's supposed to be opening later this year. it would shut down at least the community health center in centerville, iowa. that's h.r. 1. h.r. 1 would be cutting down the community services block grant -- community services block grant would shut down the red rock community action agency serving boone, jasper, and rural pope county. h.r. 1, as mentioned would eliminate funding for job training programs which assisted more than 35,000 iowans in the last year. as i mentioned, it would slash pehl grants for our kids who go

to all of our colleges in iowa the private nonfor profits, and our regent institutions. 2,000 low-income iowa kids that now attend head start would be cut off in iowa. and, lastly, mr. president, it's not only just the cuts and the slashes to these vital programs which will increase unemployment and send us back into another recession. there are riders in this bill. what we call legislative riders. -- riders that are pernicious. they do terrible damage to our country. for example, just one. there's a rider in the bill that says no money can be used or spent to -- to -- to continue the implementation of the health reform bill that we passed last year. well, what does that mean? well, that means that right now

in law because of the affordable care act that we passed last year, kids can stay on their parents' policy until they're age 26. ed that be gone. the question would be, the ones that got on before this, would they be able to stay on or not. no new kids would be able to stay on their parents' policy until they're aged 26. we put in and as you know right now, it's in law right now, an insurance company cannot impose a lifetime limit on individuals now. that was in the bill last year. ed that be gone. they -- that would be gone. they can start reinstituting lifetime limits and annual limits. they could also make sure another thing that we had is we had the -- a provision in the bill that provided for a medical loss provision. let me try to explain that. in our bill we said that insurers and health insurance companies have to pay at least 80 cents of every dollar of

premium they collect on health care rather than profits, bonuses, overhead, fancy buildings and corporate jets and all that kind of stuff. they had to pay 80 cents of every premium dollar has to go for health care. done away with under h.r. 1. we could not enforce that at all. so, again, for those who have seen benefits to themselves from -- from the health care bill that we passed, whether it was keeping their kids on their policy or elderly people now who get free mammograms and free health checkup every day with no he coulco-pays, no deductibles,t ends with h.r. 1. and, so mr. president, the bill passed by the house is bad policy and bad values. it's not the values of our country. i hope that the senate will

resoundingly -- resoundingly defeat h.r. 1. consign it to the scrap heap of history, the history of ill-advised ideas -- of ill-advised programs. there have been a lot of them that have come along in the history of this country. fortunately, i think the congress in most instances have turned them down and we've moved ahead. we can't afford to go backward and h.r. 1 is exactly what it would do. it would take this country backwards, lose jobs, cut kids out of getting an education, close down head start centers. as i said, it would again widen that gulf between the rich and the poor in our country. we can't continue to go down that road. we don't want to wind up to be another third-world country. we have a few at the top, nobody at the bottom, and everybody in between. it's the middle class that built this country, and we can't

continue to erode the middle class in america. that's what h.r. 1 would do, erode that middle class, widen that gulf between the rich and the poor. so, mr. president, i hope that the senate will recognize h.r. 1 for what it is, a detriment, a body blow to our recovery efforts in america, and i hope the senate will resoundingly defeat h.r. 1. mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from vermont. mr. leahy: mr. president, i suggest the absence of a quorum -- no, mr. president, i ask unanimous consent the quorum call be dispensed with. the presiding officer: without objection. mr. leahy: mr. president, are we in morning business? the presiding officer: morning business closed at 5:30. we've returned to the measure. mr. leahy: mr. president, then we're back on the american invents act. we brought this about a week

ago. this reflects several years of work, and for my colleagues, i understand that we have an excellent chance we will be voting on this in a very, very short while. and i would hope the vote would be as overwhelming as the cloture vote was yesterday. i want to emphasize this is legislation that should promote innovation, it will help create jobs, it will help energize the economy as we continue our recovery. legislation can be a key part of a jobs agenda. it can help unleash innovation. we can promote american invention. we can do all this without adding a penny to the deficit. it's common sense, bipartisan legislation. as we begin this debate, i referred back to the president's

state of the union address and his challenge to the nation to outbuild and outeducate our global competitors. this act is key in meeting the challenge. reforming the nation's antiquated patent system will promote american innovation, create american jobs, it will grow our economy. i thank the president and his administration for their help and support for this bill. i especially thank senators hatch and grassley and others who cosponsored this bill. we have shown it can be a bipartisan effort. commerce secretary locke has been a strong partner in our efforts. director campos of the patent and trademark office has been an indispensable source of wise

counsel. this is the product of eight senate hearings over the last three congresses, years of work and compromise by both republicans and democrats have brought us to this point. the senate judiciary committee has reported a bipartisan fashion patent reform legislation to the senate each of the last three congresses, this last time unanimously, and the house has seen efforts over the same period, led by congressman lamar smith of texas and howard berman of california. and the legislation we're acting on today is structured to -- on the original house bill. it contains many of their original provisions. during senate debate over the last week, our bill has been approved by a number of senators who contributed amendments. senators bennet, coon, menendez,

bingaman, coburn and kirk have all contributed. i thank them for working with us. i thank our ranking republican on the committee, the comanager of this measure, senator grassley. his staff, colin davis and rita laurie for their dedication to this effort. i want to thank my friend from utah, senator hatch, for having stuck with this bill for so many years. the two of us have been through more markups and more hearings and more meetings than we'd like to think. and senator kyl who has worked with us both in the hearings but also has helped us put together bipartisan meetings and interest groups and those who have an interest in the patent legislation. i want to extend my personal thanks as well to senator klobuchar of minnesota. she was active during committee consideration and she has helped manage this legislation effort in the senate and she has been

outstanding, and of course like so many times the senate's action could not have been accomplished without the hard work of many dedicated staffers and individuals and companies. i'm happy to be on the floor with aaron cooper, counsel on the senate judiciary committee who, along with bruce coen, our chief counsel, ed begala, my chief of staff have worked so hard on this. susan davies now at the white house who spent years on it before she left. but it's been almost six years since chairman smith and congressman berman introduced the first version in 2005. we have worked together, and we can -- we can get this

accomplished. i -- i find my voice leaving. it has been a bit of a travel day coming back from our -- by vermont's standards, the unique snow time, and so i'm -- i'm going to soon yield the floor. i will put my -- ask consent to put my full statement in the record. the presiding officer: without objection. mr. leahy: and, mr. president, i will shortly suggest the absence of a quorum, but i would hope that we could have this bill finished in the next 20 minutes or so. so, mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. reid: i ask consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i now ask unanimous consent the reid amendment number 152 be withdrawn. that that amendment number -- that the reid amendment number 143 be modified with the changes at the desk, the senate proceed to vote on the amendment as modified with no amendments in order prior to the vote. that there then be 30 minutes of debate equally divided between the two managers or their designees. that s. 23 be read a third time. that a budgetary paygo statement be read. the senate then proceed to a vote on passage of the bill as amended, and the motions to reconsider be considered made and laid upon the table with no intervening action or debate. further, i ask consent that at 12:00 noon wednesday, march 9,

the senate proceed to the consideration of calendar number 14, h.r. 1, the defense appropriations long-term continuing resolution for the fiscal year 2011, that there be three hours of debate on h.r. 1, the democratic alternative inouye substitute amendment number 149, with the time equally divided between the two leaders or their designees prior to vote on passage of h.r. 1. that the vote on passage be subject to a 60-vote threshold. if the bill achieves 60 affirmative votes, the bill be read a third time and passed. that if the bill does not achieve 60 affirmative votes, the majority leader be recognized to offer the inouye substitute amendment number 149. the senate then proceed to a vote in relation to the substitute amendment. the substitute amendment be subject to a 60-vote threshold. if the substitute amendment achieves 60 affirmative votes, the substitute amendment be agreed to, the bill as amended be read a third time and passed. if the substitute amendment does not achieve 60 affirmative votes, h.r. 1 be returned to the calendar and no motions or amendments be in order to the substitute amendment or to the

bill prior to the votes. further, that all of the above occur with no intervening action or debate. the presiding officer: is there objection? without objection, so ordered. mr. reid: mr. president, with this agreement, i ask consent that the cloture vote with respect to the motion to proceed to h.r. 1 be vitiated. the presiding officer: is there objection? without objection, so ordered. mr. reid: mr. president, even though there has been a few turns in the road, we're at the place where we need to be. we need to be able to show the american people where we are on these two measures, and i express my appreciation to my friend, the republican leader, that we -- as i said, things don't always work smoothly around here, but they usually work. now we're at a point where we can vote on these two measures, which is what we need to do. the presiding officer: under the previous order, amendment number 152 is withdrawn and amendment

number 143 is modified with the changes at the desk. the question is on amendment number 143 as modified. all in favor say aye. those opposed, no. the ayes appear to have it. the ayes do have it. t the amendment as modified is agreed to.

mr. leahy: i suggest the absence of a quorum and i ask unanimous consent that the time be equally divide. the presiding officer: without objection. the clerk will call the roll. quorum call:

the presiding officer: the

senator from vermont. mr. leahy: mr. president, i ask unanimous consent the call of the quorum be dispensed with. the presiding officer: without objection. mr. leahy: mr. president, i discussed with the republican leadership and we're prepared to yield back all time on both the democratic and republican side. the presiding officer: all time is yielded back. mr. leahy: mr. president, i ask for the yeas -- i ask for the yeas and nays on the bill. the presiding officer: is there a sufficient second? there appears to be. the clerk will read the bill for the third time. the clerk: calendar number 6, s. 23, a bill to amend title 35, united states code, to provide for patent reform. the presiding officer: the question is on the bill, as amended. the clerk will read the paygo statement. the clerk: mr. conrad, this is the statement of budget effects of paygo legislation for s. 23 as amended. total budgetary effects of s. 23 for the five-year statutory

paygo scorecard, net reduction in the deficit of $590 mill job. total budgetary effects of s. 23 for the ten-year statutory paygo score the card, net reduction of $750 million. also submitted for the record as part of this statement is a table prepared by the congressional budget office which provides additional information on the budgetary effects of this act. the presiding officer: the question is on passage of the bill, as amended. the yeas and nays were ordered. the clerk will call the roll. vote:

vote:

vote:

the presiding officer: are there any senators in the chamber wishing to change their vote? if not, the yeas are 5 -- 95, the nays are five, the bill as amended is passed. a senator: mr. president? the presiding officer: the senator from vermont. mr. leahy: mr. president, i move to reconsider. a senator: move to lay on the table. the presiding officer: without objection. mr. leahy: mr. president, this has been many years getting here. i can't tell you how proud i am in my fellow senators, both republicans and democrats, and i thank the senator from iowa, who's been here with me, and so many others i mentioned earlier.

it is nice -- it is nice to finally have this bill through the senate. i yield the floor. notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. leahy: mr. president? the presiding officer: the senator from vermont. mr. leahy: i ask consent to call off the quorum call. the presiding officer: without objection. mr. leahy: i ask unanimous consent the senate proceed to a period of morning business with senators permitted to speak for up to 10 minutes each. the presiding officer: without objection. mr. leahy: mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. menendez: mr. president? the presiding officer: the senator from new jersey. mr. menendez: millimeter plp, i ask tha --mr. president, i ask e quorum call be vitiated. the presiding officer: without objection. mr. menendez: i understand we're in a period of morning business. the presiding officer: that's correct. mr. menendez: i ask unanimous consent to speak for -- i ask unanimous consent to speak for 20 minutes. the presiding officer: without objection. mr. menendez: thank you, mr. president. and thanks for your assistance as well. mr. president, as someone who voted to freeze the salary, to

end earmarks in this process -- budget process, as someone who has already voted to cut $45 billion from the budget, i rise today in recognition that business as usual can't continue. i recognize the critical importance of addressing our federal deficit, a deficit, i would add, inherited by this administration. a deficit driven by two wars, both unpaid for, and the unprecedented need for governmental action to mitigate the wild excesses of wall street and american financial markets. excesses that were effectively condoned by the last administration whose policies took this nation to the brink of a second great depression and cost millions of american jobs.

i never forget, mr. president, that time in late 2008 when chairman bernanke, the chairman of the federal reserve, came before members of the banking committee and members of leadership, and described the circumstances that were unfolding in the country in which a series of financial institutions, according to chairman bernanke, and then secretary paulson, the secretary of the treasury, said we're going to have a series of. financial institutions collapse. and if they collapse they will create systemic risk to the entire country's economy and every american will feel the consequences of that collapse. and i remember how hushed that room was and i remember also the question being put to chairman bernanke, surely you must have enough tools at the federal reserve to get us through this period of time.

and i remember the response to that question, which was basically, senator, if you and your colleagues don't act in a matter of days, maybe a week, we'll have a global -- global financial meltdown. which really meant a new depression, mr. president. now, chairman bernanke is an ecomidition, how this nation got into the depression, how roosevelt got us out of it, so when he made that statement, it was all the more chilling, and it is from that moment in 2008 before this president took office and democrats were in full control here that, in fact, we are facing the challenges that we are today. and so those of us who believe

in a free market also know you can't have a free-for-all market. and so we had economic policies for the bush eight years, two wars raging abroad, an unregulated market that allowed for the free-for-all that brought us on the brink of a new depression and that's what we are meeting the challenges of today. those choices then and the choices we make, what we choose to cut and what we determine is in our interests preserved will speak volumes about our values, our priorities as a people and as a nation. mr. president, i favor smart cuts, not dangerous ones, and an independent analysis, you know, h.r. 1 that we're going to be voting on tomorrow, the republican vision of where we should take the country, is about losing 700,000 jobs.

we are trying to grow jobs in america. we have finally gotten into positive gross domestic product of our nation's economy. h.r. 1 takes us back the opposite way and threatens the very essence of this economic recovery. 700,000 jobs, but it's not because i say it, mr. president. it's because those in the know say it. ben bernanke, the g.o.p.'s plan will cut jobs. economist mark zandi, the g.o.p. plan would cost 700,000 jobs. another analysis, house spending cuts will hurt economic growth. so what we have is economist after economist telling us that h.r. 1 is a recipe for disaster

when it comes to the question of jobs in america. now, that analysis that says that we would slash 700,000 jobs directly impacts the lives of middle class and working families struggling to get back on their feet. they are severe cuts that run roughshod over the green shoots of economic recovery just to satisfy a political agenda. now, i favor smart, commonsense cuts, cuts made with a surgeon's knife, not a meat ax, cuts that are thoughtful, surgically precise, cuts that actually reduce the deficit, not cuts that eliminate jobs and disinvest in educational opportunities for millions of promising young americans. not cuts that hurt middle-class families struggling to make ends

meet, make our work force less competitive, our communities less safe and strip away basic protections americans have come to take for granted. in my view, we can, we can preserve our values and invest in the future, invest in outeducating, outinnovating, outgreening and outgrowing the world and still cut the deficit. to begin with, secretary gates of the department of defense has identified $78 billion in defense spending cuts alone. he has identified $178 billion in program reductions over five years, including delaying or terminating high-profile weapon systems. i agree with secretary gates that we can live without the marine corps variant of the f-35 joint strike fighter as well as the marine corps expeditionary

fighting vehicle. the secretary has identified identified $54 billion in cuts in overhead costs and improved efficiency across defense agencies in the civilian bureaucracy by reducing the number of defense contractors and culling redundant intelligence agencies, among other improvements. again, smart decisions that do not burden military families or affect our defensive capabilities. i would add to that list of smart defense cuts the elimination of $1.75 billion for the f-22 aircraft and and $439 million for an alternative engine for the f-35 joint strike fighter program, a cut that i voted for. these, among others, are smart cuts, but i think it's a mistake to pursue a budget-cutting strategy that costs this nation 700,000 jobs through 2012 as the republican plan will do.

20,000 of those jobs are in my home state of new jersey, including more than 3,000 community health-centered jobs, 3,400 transportation and infrastructure jobs. another smart cut would be to do away with corporate subsidies that have nothing to do but pad the profits of companies that do not need them to be profitable and grow. we can repeal, for example, oil subsidies as i have proposed that would save $33 billion over ten years on a windfall giveaway program to big oil that hardly needs a government handout. over the past decade, b.p., exxon, chevron, shell, conoco have combined profits of just under $1 trillion, and yet we have a system that provides the

billions in subsidies every year. that's simply outrageous. even traditional oil industry supporters like former president george w. bush and shell's former c.e.o. have admitted that when oil prices are this high, oil companies do not need subsidies. they all have the economic incentive they need to explore and drill. in 2010 alone, last year, they made over $75 billion, and that includes the $41 billion b.p. has spent trying to clean up the spill in the gulf, cleaning up the environment and paying for the economic damage they caused. the fact is cutting unnecessary defense programs and cutting oil subsidies are among the smart cuts that will save money while doing no harm to middle-class families.

but the republican plan, on the other hand, will take money away from the one thing that will allow millions of young people to reach their goals and prepare them to help america its competitive future, namely a good education, and that's a terrible mistake. it's a mistake to cut the average new jersey undergraduate's pell grants by more than $845, an 11% cut. it's a mistake to take take $115 million in pell grants from 183,000 promising students in my state, as the republican cuts would do. it's a mistake to cut funding to 18,000 students in union county, new jersey, or 16,500 in middlesex county or 15,500 in essex county, and to continue to cut pell grants by $56 billion over the next ten years. it's simply a mistake not to

invest in education. mr. president, we are globally challenged for human capital in the delivery of a service or the production of a profit. the boundaries of mankind have largely been erased in pursuit of that human capital, so that an engineer's report is done in india and sent back to the united states for a fraction of its costs. a radiologist's report is done in northern ireland and read at your local hospital by your doctor. or if you have a problem with your credit card as i recently did because there was a charge that wasn't mine, you end up with a call center in south africa. in the pursuit of human capital for the delivery of a service or a product, we are globally challenged, which means for the nation to continue to be a global economic leader, it needs to be at the apex of the curve of intellect, the most highly educated generation of americans the nation has ever had. that's how we're going to grow this economy and prosper and compete in the world, yet the republican budget moves us exactly the opposite way.

it's wrong to leave 4,000 new jersey children without access to head start while at the same time continuing tax cuts for millionaires and multimillionaires. it's shortsighted to cut job training. i went to a job training site in one of our counties, the place was packed, packed. individuals who have worked in the past, unemployed now, looking to get the additional training that will make them competitive in a tough job market. and so instead of helping our fellow americans be as competitive as they can for the job opportunities that may exist, we're going to cut job training for 70,000 new jerseyans rather than seriously look at cutting farm subsidies. we need to be smarter about the cuts we make. i think we would all agree that there are certain farm subsidies that are no longer needed, and we could certainly make smart cuts in some of those programs.

we're well aware that farm subsidies are not about the small american farm. i want to nurture that small american farm, including back home in new jersey. we call new jersey the garden state. we're proud, number two in blueberries, number four in asparagus. you had cranberry for thanksgiving last year. probably time from the pine barons of new jersey with cranberry bogs. but that small farmer is not what we're talking about. this is about systemic efforts to move lands from small farms to large corporate farms that mass produce commodity crops like cotton. we pay out billions in agricultural subsidies every year that have created problems like the ones we saw in brazil earlier this year. brazil went to the world trade organization and complained that what we were doing was an unfair trade practice and the world trade organization agreed. so to avoid retaliatory

tariffs -- in essence, taxes -- against our products by brazil, the united states agreed to pay pay $147 million in assistance to brazillian producers. yup, you heard me right. $147 million that the american taxpayers are now subsidizing, not american farmers but because of our unfair trade practice, we are now subsidizing brazillian farmers. with our tax dollars. something is wrong about that process. we need to put an end to such ridiculous policies and save taxpayers billions of dollars, but instead of saving billions in smart cuts, by that the republican plan under h.r. 1 goes after homeland security funding. that bill will cut homeland security investments by $3 million in my home state

of new jersey alone. home, according to the f.b.i., of the two most dangerous miles in america because of the chemical causeway along the hudson waterfront that creates a real challenge, directly affecting the budgets of first responders by the courageous men and women who responded on september 11. it's dangerous to cut more than than $22 million in port security grants and more than than $16 million in transit security grants from the port authority of new york and new jersey. mr. president, i have worked really hard from implementing the 9/11 recommendations to fighting on port cargo screening. we don't need a nuclear or biological weapon coming into our ports or a threat like we saw from the terrorists in mumbai and our transit systems that would result in a devastating attack and then further threaten our economy,

but yet, that's exactly what the republican budget does. and i believe it's dangerous to cut $4.5 million in transit security grants for northern new jersey, more than $3.5 million from the philadelphia area in southern new jersey, leaving families in my state and throughout that corridor who travel between states less safe. so, mr. president, i have a different take than my republican colleagues on how we achieve deficit reduction. quite simply, it comes down to one truism that we should keep in mind during this budget process, and that's this. you show me your budget and i'll show you your values. we have that in our own family budgets. families struggle together to have a place to call home for their families, educate their children, put food on the table, to be able to have them hope --

to realize their hopes and dreams and aspirations and how we both spend our money as families speaks to our values and of course the work that we do to earn that money. and that's true about the nation's budget. the nation's budget is a reflection of our collective values as a country. those values are clearly evident in what we choose to fund and what we choose to cut. i would remind my colleagues this debate is about more than numbers on a page. it is a portrait of america, a reflection of who we are and what we want this nation to be. to make cuts simply to reach a numerical goal that isn't established by any sound science is to say that we care more about the bottom line than about investing in people, investing in jobs, in education, in infrastructure, in building and growing this economy and

protecting a safe, clean way of life that we have too often come to take for granted. i want to talk about that for a moment. from the moment we get up in the morning to the moment we go to bed at night, the republican plan would make cuts that affect the daily lives of millions of americans and millions of jobs in every economic sector. in america, when you turn on the tap for a glass of water or take your child fishing at a local lake, someone is at work, someone with a family who is making sure the water is safe to drink and the lake isn't polluted. the republican plan cuts $700 million from the clean water state revolving fund and $250 million from the drinking water state revolving fund that have helped municipalities and communities put people to work on the type of water quality protection projects that make sure that we're safe.

the republican plan cuts almost a billion dollars from clean water, and that means not just cutting funding, but jobs of those who work to keep our water safe and clean. is that a smart cut? does that reflect who we are and what we want this nation to be? if you live on a river or a floodplain or on the coast and a storm strikes, you know that in america, there will be someone there to help if there's a flood or coastal emergency. the republican plan, even after the disastrous experience in the wake of katrina, cuts $30 million from the flood control and coastal emergencies. is that what we learned from new orleans? is that what we as a nation believe is a smart cut? if you wake up in the middle of the night and your child is sick and you don't know why or you think that child may have accidentally ingested something poisonous or your child is diagnosed with a

life-threatening disease, in america, you can call the poison control center. take your child to a community health center, know that the centers for disease control is doing its job. in america, you know that the national institute of health is working everyday to find the next treatment or cure that afflicts our families, friends and neighbors. 300 million of that in new jersey, bringing thousands of new 21st century jobs to my state to help continue our economic recovery and find the cures that beset our families. but the republican plan cuts $755 million for the center for disease control, a billion dollars from the national institutes of health, $27 million from poison control centers, $1.3 billion from health -- community health centers, and 3,400 community health center jobs in my state of new jersey alone -- $3,400

more un-- 3,400 more unemployed new jerseyans. we may not immediately always make the connection between what these cuts mean in our lives, but it has a consequence to our lives. it has a consequence to our prosperity. it has a consequence to economic growth. and it also means there's some family who loses a job. this morning, millions of americans got up and maybe scrambled a few eggs and made some bacon for breakfast. fortunately in this country, we know that it is someone's job to inspect those eggs, that it was someone's job to inspect that bacon and make sure it was safe to eat. but the republican plan cuts $53 million from food safety and inspection services. the loss of more safety inspectors at a time when we've heard numerous reports of tainted food and the need for more, not fewer, food inspectors keeping our food supply safe. is that reflective of our

values? is that what we think as a safe life here in america? if you were a middle -- if you were a middle-class new jerseyan, who after a year of looking for a job finally had an interview and wanted to take the train because you thought it would be faster, easier, and more convenient way to get to that interview, you may find that there aren't as many opportunities because the republican budget cuts $224 million from amtrak. in a post-september 11 world in which multiple modes of transportation are critical to our security -- so we learned on september 11, that when there is no trans-hudson's crossings through the tunnel or the path, which is the rail connection between new york and new jersey, we had ferries that took people out of lower manhattan and brought them to new jersey hospitals. multiple modes of transportation is not only about economic opportunity, it's about security

in a post-september 11 world. yet the republican budget cuts $224 million from amtrak, which is how we move between cities, send our business people to sell their products between cities, go to great research universities and hospitals to be cured. so you'd be forced to take the car, buy the gas, burn the fuel, fight the traffic, and park in the city to get to your interview. is that how we invest in our infrastructure? is that the type of smart growth we want to achieve a greener, cleaner future? and when you park the car and walk to your interview, you expect to have enough police on the street to protect you from ganggangs and criminals. well, the republican plan cuts the national drug intelligence center by $11 million. it cuts law enforcement communications by $52 million, the u.s. marshal service that goes after fugitives by $10 million, the f.b.i. that deals with domestic terrorism,

among other things, cuts $74 million; state and local law enforcement assistance by $256 million; juvenile justice by over $2 million; and the cops program that puts people on the street and provides them with the state-of-the-art equipment they need by $600 million. that means fewer police officers on the street. are those the type of cuts we want? are those the kind of cuts that will help our communities be safer? are they smart cuts that reflect our values in a post-september 11 world? finally, let me mention one other thing that is not a cut but it is in the republican plan and it goes to the very heart of the quality of our lives. it's something that i believe runs contrary to our belief as a nation that the air that we breathe should be clean and safe. the legislation presented by the

republicans eliminate many environmental protections that exist in the law with cuts to the environmental protection agency's budget. but it is also loaded with policy riders designed specifically to gut the clean air act. this has nothing to do with budget and spending or cutting deficits. i believe that's wrong. i believe it runs contrary to american values, and i consider any attack on the clean air act to be an attack on new jersey. because of the emissions of dirty out-of-state coal plants, every county in my state is deemed to be out of compliance with the clean air act. one of these coal power plants is right across the delaware river in pennsylvania. it emitted 30,000 tons of sulfur dioxide in 2009 alone, almost three times -- three times -- the amount of all seven of new

jersey's coal plants combined. that sulfur dioxide wafts into warrenton, sussex and hunter counties and they act to cause a whole host of respiratory illnesses ar, from asthma to het disease. we simply cannot gut the one piece of legislation that protects the very air that we collectively breathe as americans and makes it safe for our children to go out and play without fear of being sick. this republican plan, h.r. 1, guts the clean air act and that does not reflect our values as a nation. it is simply not reflective of who we are, what we want this nation to be, or what we want for our children's future. so, mr. president, a list of h.r. 1's shortsighted disinvestments in this nation's future goes on and on. show me a budget and i'll show

you your values. mr. president, the republican proposal before us is, in my view, an affront to american values not a reflection of them. i, for one, do not believe for one second that it reflects who we are and what we want this nation to be, and i do believe at a time that we are finally growing this economy that these indiscriminate cuts, as many economists have said, will throw this economy right back to the deep recession that we are coming out of. and that means less jobs here in america. that certainly can't be part of our values, and that's why i'll be voting against h.r. 1, to present american values and protect american jobs. mr. president, with that, i yield the floor and observe the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: quorum call:

quorum call:

mr. bennet: mr. president, i'd ask that the quorum call be vitiated. the presiding officer: without objection. mr. bennet: thank you, mr. president. i ask unanimous consent that when the senate completes its business today, it adjourn until 9:30 a.m. on wednesday, march 9. following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day. following any leader remarks, there may be a period of morning business until 10:40 a.m. with senators permitted to speak therein for up to ten minutes

each, with the time equally divided and controlled between the two leaders or their designees, with the majority controlling the first half and the republicans controlling the final half. at 10:40 earnlg the senate recess until 12:00 noon for a joint meeting with the honorable julia gillard, prime minister of australia. that following the joint meeting, the senate requeen at 12 -- reconvene. senators are encouraged to gather in the senate chamber at 10 dlon 40 a.m. and we'll proceed as a body to the hall of the house at 10:45 a.m. for the joint meeting of congress. furthermore, senators should expect two roll call votes at 3:00 p.m. tomorrow on passage of h.r. 1. the defense appropriations and long-term continuing resolution for fiscal year 2011, and the democratic alternative offered by senators inouye, which is

amendment number 149. if there is no further business to come before the senate, i ask that it adjourn under the previous order. the presiding officer: the the presiding officer: the

ben national association for business economics is holding its annual conference this week in washington. today members her from austin goals become chairman of the president's council on economic and pfizer's. this portion is 15 minutes. estimate is strikes me we are going from phase one to phase two. faiths to was the rescue phase. i believe it is inherently more controversy will because there

wasn't any -- there wasn't any alternative to the heavy government direct involvement in the economy. for anybody who believes that in phase one we should have just not done anything and would it take care of itself, i would suggest respectfully that you were not paying attention. [laughter] we were very close to being in a depression. the depression most financial crisis plus the procession leading to the collapse of the entire financial sector which he based essentially all of the self correcting mechanisms of the business cycle and we went down a hole we couldn't get out of for ten years. we have a financial shock bigger than 1929. the impact on household balance sheet was larger net worth. the household sector went down more than. the worst recession since 1929

and the financial system this close to coming unraveled. i also believe it could have been worse than the depression in that financial -- the financial sector is far more integrated and the rest of the economy now than it was in 1929. so phase 1i could understand this controversy, but as i will go through and the data it feels like phase one is over. we are now transitioning to a growth phase, and as we should come as the conditions change and the private sector and the financial system both show clear signs of life standing up, the policy shift of what is the appropriate response also changes. incentives replace direct government involvement, if focus on growth and competitiveness on the longer-term investments becomes totally appropriate

emphasizing the partnership between the public sector and private sector where we can do things to rely on the private sector to stand up and drive growth and become totally appropriate though i do think there is a bit of an element if you have just gone through a period you are running into the burning hotel and teaching children and throwing them down into the pool to save their lives, it's not right to evaluate them as if it was the olympic diving contest, and we had a little bit of that. [laughter] when the president came into office we are losing 800,000 jobs a month and we, the fed, the congress, other governments were trying to save the lives of the economy. we got from phase one to face to is a testament to a lot of

people's worth in the private sector and the public sector and the fed and the administration. i do think that we tend to have a bias towards the present an hour, if only in our expectations it's kind of a i used to drive a car pool with a bunch of kids in chicago and one of the kids in the car pool got to the guitar hero video game, and he had a guitar hero 1980's edition and i said let me see that. i looked and i remember all these songs. >> you were alive in the 1980's? [laughter] and the thing is when i start listening to people analyzing i kind of get this sense they have

total for getting what in the previous business cycle, for getting what it was like in the beginning of 2009. if you had said in march of 29 when we just lost almost 800,000 jobs a month that the gdp is in the steepest decline in more than half a century that by march of 2011 we are going to have grown for six straight quarters, added jobs for 12 straight months. spreads are going to be back than lower than they were before the financial crisis and i would have given you a kiss and said please from god's years to your lips. and i do feel like we have turned a very serious corner. partly i based that on the

business cycle data that you guys to observe every day. the gdp has turned around. when the recession was over and actually even before that. with the blue chip survey keeps going up. in november of 2010 not five months ago, the blue-chip for 2011 was open to be 2.9%, and by this february that raised to 3.5%. if you look at the purchasing managers' you've got strong indicators that manufacturing is coming back on the expectations of jobs it's the highest in really decades that business confidence appears to be coming back by any of the measures consumer confidence the highest in at least three or four years. separate from the data coming in on the stronger side,

anecdotally if you talk to business people, the closer those business people are to the cycle, the stronger are their expectations for the coming 11 and 12 so the big durable goods manufacturers, business equipment, high-tech sectors that are historically cyclical, the of the strongest expectations. as you move towards the less cyclical industries they are positive but my older that feels like anecdotal evidence backing up what's coming in from the business cycle data coming and the one exception i will return to in a moment is small business which is historically quite cyclical. one of the first to go down and one of the first to come back. small business has tended to lag this recovery and mom tried it and so that's why that's been a policy area of focus. so i think the data suggests

transition from phase one to phase two. if you look at the labour market which is obviously the top of mind for a lot of folks, as bad as the economy was, something happened that is still under dispute that makes a lot of difference and that is the law breaks down so as bad as the gdp is doing, unemployment rises substantially more than anybody predicted. it wasn't just my predecessor predicting the baseline unemployment rate was going to be lower than in the of being. all of you made the same predictions and the private sector mistook with the baseline was going to be for unemployment and the relationship from unemployment broke down from its historical basis. so we got 1.5 to two extra points of unemployment than

anyone would have predicted from how the output listing at the end of 2008. the president in the state of the union now lines that he's going to release a budget that cuts discretionary spending down to a share of the economy that it hasn't been since the leak was dwight eisenhower was president. then he said look, once we do that let us look at one another and agree that only 12% of the budget. that's not what the problem is to read that if we want to hold hands and together in a bipartisan way think about the aging of the population and the exhibition of health care costs, think about the tax rates on high-income people over the long run let's do that in a my partisan way but not continue saying the problem is one of the discretionary spending cuts that this will present the budget and that is high and we are running

a deficit in 2010 and 2011 because of the business cycle. now growth is going to be a key component of getting the deficit down. so if you say that in 2000 before the financial crisis the deficits may be two or 3% of gdp. it goes up to something like 11% of gdp. most of that 11 per cent is from the business cycle. getting the business cycle reversed on the growth path is critical to getting it down to let's say four or 5% and then getting from that to primary surplus has to come from cutting, but getting the growth going is fundamentally important. remember that from 1947 to something like 1979 the united states cuts the debt to gdp

ratio by 85 percentage points and it runs a surplus only three or four times in the entire year period. the main thing that gets the debt to gdp ratio down as the gdp grew at a sustained basis and needed a big difference so we've got to live within our means. we've got to think about the entitlement, but that is an issue we've known about for 30 years and that cannot be done in a partisan way. so if the argument was why doesn't president obama just come forward and say here's my partisan plan to just go ahead and change entitlements and the formula we went through a period in the health care bill that there was the private subsidy, the minister advantage program was not even medicare and that was transformed into the president wants to kill your

grandma. [laughter] in an environment like that we are not having an adult conversation about the aging of the population and the acceleration of health care costs. [laughter] so we can't be in that environment. now there are hardening things in the fiscal commission you had sitting senators from both parties say look what's cold hands and come from these issues, let's confront them in the future. it's not about right now. you also had a sitting members of the house say absolutely not. we won't have anything to do with it. so, in some sense we have to see how this one plays out. but the president is committed to a strong budget tight on the discretionary side which if enacted would get discretionary spending levels down to somewhere they have not been for many decades. there are two ways to mortgage the future.

one is by running up deficits that you leave the bills to your kids. the other is by not investing in the things our children will need to have productive careers and good paying salaries in the future such as education, investing in r&d, investing business investment and physical capital. both of those are important and we've got to preserve -- we've got to live within our means and make the investments we need to make. there are such things as bad cuts to make. cutting things critical for our growth are -- that is not a good idea. if you are going to go paul waide the financial aid of 9 million college students in the middle of the school year so that thousands of them drop out, that is not a good idea. that doesn't pay for itself. that is a cut which costs you money. if you're talking about cutting things like the $30 billion of

terminations and reductions which are things the president has already said we can afford to do without these. but you're cutting things that are duplicative, wasteful spending. when you're not in phase one rescue mode any more, you can afford to get rid of a lot of things. what matters is not just some aggregate number of what should be aggregate spending of the government. this kind of a phase one argument as you move the growth phase i if you have to be judicious about. lastly, there are clearly concerns. we are in a recovery, we are shifting to phase two boe we are not yet recovered and we still have some fears on the horizon. the most obvious, the price of oil. the great challenges for the world over the next several years is going to be held to be

harnessed the benefits of globalization and mitigate the challenges and the disruptive elements that also come from the increased competition that emerges from globalization? we can't deceive ourselves into thinking globalization that means disadvantages or challenges for certain groups of people who find it difficult to adjust to the international competitions. the opportunity for for a future growth and jobs and incomes and other two indy 500 these rapidly growing domestic markets particularly in an environment where the consumer demand in the country for the time being is going to be relatively modest all the wood is picking up somewhat, but the growth in the consumer demand or demand for infrastructure around the world far exceeds that at least most parts of the emerging world than

we see in the united states. so i see a historic challenge fund united states faces today. we can either decided the we want to retreat from the world economy or at least take very tentatively the international positions in the world to impose protection measures or refrain from participating in international trade agreements or try to shelter ourselves from the challenges of the global economy, shelter from various people who want to come to the united states and create jobs companies or go to school here or we can look at it another way as internationalization or globalization and it's an enormous opportunity. an opportunity for identifying and taking the advantage of the

new markets. an opportunity for attracting investment from countries around the world that have accumulated a lot of capital and are looking to diversify their investments as all of us do and it's sort of natural phenomenon to the countries to develop large amounts of reserves. do we want to try to maintain our openness to the best and brightest and of the world who want to go to school here and come here and start companies, who want to go to work in american companies as we have some of the past, do we take advantage of these networks of international research that are increasing in terms of intensity and in terms of quality of the cross border research or do we try to avoid this for fear that

we are losing too many opportunities by sharing our knowledge with the other parts of the world? these are the kind of challenges i think the united states faces today. and the last challenge is international in the sense that it affects our ability to compete in the world, but it's largely domestic in terms of the kind of policies we need to pursue. and i think austan goolsbee probably spoke about this but let me reemphasize the point, and that is we tend to look a lot and be focused a lot on what other countries are doing and many countries are not playing by the global rules. there's piracy of intellectual property, there are countries like china that have policies that force the transfer of technology or the innovation from american companies to chinese companies as a precondition for growing business. there's a number of countries that engage in dumping or

countervailing duties and of that give special preference is to their companies when it comes to the government procurement. all of those are issues where the united states has to take a tough position on behalf of the company's particularly the protection of intellectual property because intellectual property is so critical to the future of american companies. most of our companies don't thrive because they will wage companies because the if innovative ideas and creative talent and come up with new ideas. all of these things are important for us to take very strong positions on international negotiations and to be sure the rules are fair and intellectual property is protected and the wide range of other things to defend our economic interest and we are doing that in the state department and all other agencies as well. no matter how well we did in

that area in protecting our interest, the key point from the american competitive deafness point of view is what we do at home in terms of education, what we do in terms of developing new sources of clean energy so that we don't need to be as formidable to the disruptions in other parts of the world as we are proceeding now dealing with infrastructure and in many cases antiquated infrastructure while china and india and brazil and many other countries are building moderate infrastructure american infrastructure has in many cases deteriorated at a minimum simply not kept up. how do we maintain in our and the environment which enables us to develop new ideas and keep the culture of innovation going which depends largely of course on the private sector but also depends as we've seen in the past three institutions like

darpa and reproductive role and innovation and in the end not so much that china and india and others are becoming more competitive that was inevitable. these countries for years hadn't undertaken major reforms. china started doing it in 1979, india in the early 90's. the reforms were bound given the talent the country's seventh dockery and others. the countries were bound to increase their competitive capabilities to increase their technical skills to become more important financially and commercially. this was part of the change in the world economy that you could have predicted and also probably not predicted how dramatically it would occur but nonetheless

the direction, the sign was fairly evident. the key point now is not to wring our hands over the fact other countries are more competitive for some cases not playing by the rules we think they should play by. we should focus on that and take tough action. how we conduct of international economic policy in terms of protecting trade rights and other things we are just not going to be as able to provide the benefits for our children and grandchildren and maintain a strong national economy unless we deal with these fundamental issues the president talked about in the state of the union speech that i am sure austan mengin yesterday and that is what we are doing at home strengthens the environment particularly the environment for the entrepreneurial creative business for business to grow and come up with new ideas, for business to hire new people the

depends on education, infrastructure, energy availability, sound fiscal outlook, and we have to focus a lot more today. the president mentioned we are in a sputnik moment and he was quite. but i would even go beyond that and sputnik was sent up by the soviet union. now we are seeing sputnik from all over the world. sputnik in china, malaysia, they are all doing very innovative things and new technologies and going of every day, every week with competitive challenges and the key for the united states today is to identify the kind of things we need to do with a sense of vision about our own future to make ourselves a competitive economy, but most importantly to ensure the companies that work here, the workers who have jobs, the students cling to school

expecting a better life when they go out and get out of school to get all these people to opportunities to thrive in this more competitive world and that is the big challenge. the chinese plan the five-year plans, and number of other countries are thinking long term. we have to begin to think today what we need to do now to make ourselves and make our companies and of students and mekouar workers more competitive in the global economy, not just today but over the next five, ten, 15 years. it's an enormous challenge the requires vision, leadership, by partisanship and requires the critical mass of national understanding that we are in the challenge we haven't faced before in our history and we are going to have to live up to it. thank you very much. >> today the senate budget committee heard from the co-chair of the national

commission on fiscal responsibility. part of that hearing is set next. we hear from former senator on the nation's debt issues and the committee's recommendations. this is 20 minutes. .. that we are incurring on an annual basis are like a cancer, and they are truly going to destroy this country from within unless we have the common sense

to do something about it. i was with former senator kerry, bob kerrey, about a year ago exactly and he said erskine, look at the nation's current income statement and let me tell you what you will see. you will see that 100% of the revenues that this nation produces today are eating consumed by our mandatory spending and the interest on the debt. that means that every single dollar that we spend today on these two wars, on our military, on national security, on homeland security, on education, on infrastructure, on high-value added research is borrowed and half of that is borrowed from foreign countries. that is a formula for failure, and if we do nothing, if we just

take the ostrich theory in this room, then we will be spending a trillion dollars a year in interest costs alone by the year 2020. think about that. that is a trillion dollars that won't educate our children. it is a trillion dollars that won't delve a highway or want bring broadband infrastructure to rural south carolina. that is a trillion dollars that won't create the next new thing in this country. it is a trillion dollars that is going to create the next new thing somewhere over there from the people we are borrowing money from. it is crazy. and this is not a problem we can grow our way out of. you could have double digit growth for the next two decades and not solve this problem. so don't think we can grow our way out of it. and this is not a problem we can tax our way out of. raising taxes doesn't do a darn

thing to slow the rate of growth of health care or to change the demographics of the country. and in fact if you want to try to solve this with just taxes, you will have to raise the highest marginal rate to around 70%, the corporate rate to 80%, the capital gains and dividends rate to 50% and what kind of country will we have? you are not going to have any business is started or business is growing with that kind of tax structure. so we can't simply tax our way out. and we can't simply cut our way out of this problem. you know when i see people go on the sunday shows and they say oh, look, we are going to cut our way out of this problem that we are not going to touch medicare and we are not going to deal with medicaid and we are not going to mess with social security and for sure we have to stay safe and secure so we are not taking a dollar out of defense and oh by the way we have to pay the interest on the

debt. you know if we exclude all those things you know, you have got to cut everything else by 65275%. that is not going to happen. that is not a real mystic world. so what al and i try to do was to present a realistic plan, a balanced plan, a plan that turned out to be a bipartisan plan, and it is based on six basic principles. the first is we didn't want to do anything that would disrupt a very fragile economic recovery and the economy isn't in recovery. this growth is real today, the old boy we can lose it and lose it quickly. so when we look to cutting spending as senator crapo knows, most of our spending cuts come

in 2013. that is where we get back to 2008 levels in real terms to the pre-crisis level, which i believe we can do. now i expect that the republicans will be getting back to the 2008 levels in 2012. we simply were afraid to do that because we didn't want to disrupt what is a very fragile economic recovery. we have real cuts in 2012 that we get back to 2008 levels in real terms in 2013. the second principle, we didn't want to do anything that would harm the truly disadvantaged and that is why if you look at the cuts we made in mandatory spending, we didn't touch things like food stamps or unemployment or ssi. we let left that off the table, the income supplement plans and when you look at medicare, we did a couple of things that made

our job more difficult. we increased the minimum payment up to 125% of poverty. to protect the truly disadvantaged and we gave that 1% bump up a year to what is called the older old, people between 81 and 86. both of those costs money and in our plan be paid for that but we wanted to do the right thing and when we raise the retirement age, we did put in a hardship provision to protect those people that have those backbreaking jobs, those manual labor jobs that really can't work as long if we raised the retirement age. so we did our best to try to protect the truly disadvantaged. third, we do want to keep this country safe and secure. now i am not personally one that believes we can afford to be the worlds policeman but i will put it in more basic terms. i don't think this country can

afford to spend more on national defense than the next 14 largest countries combined. and, have enough money to invest in education, infrastructure and high-value research which we have got to do in order to be competitive in a knowledge-based global economy that we all compete in today. fourthly, i do think we have to make these investments in education, infrastructure and high-value added research. it doesn't mean we have to spend money willy-nilly. i just finished five years as president of the university of north carolina. it is a 17 university system, and so i saw where some of your research dollars go. today we have 375,000 research projects that you all were funding. on 3000 separate university

campuses. now all of that is not great research. some of it keeps us from going down a lane and it ends up dying but it is good research because it makes you from making a bad decision. some of it actually ends up and -- but some of it is not high-value research. in a time of limited resources, we have to spend our money more wisely. fifth, for god sakes let's reform the tax code. the tax code is our cage. it was created when america dominated the world. we live in a global economy today. you saw it every day when you are at ustr. it is a fact. what we have proposed was broadening the base, simplifying the code, eliminating or greatly reducing these tax expenditures, bringing down rates and using

some money to reduce the deficit we went to what is called a zero-based plan and if you eliminate all of these $1.1 trillion worth of tax expenditures, i call them tax earmarks, you all have been so bold to get rid of the $16 billion of earmarks in the spending part of the budget, but we have $1.1 trillion that we are spending in the tax code and it is just spending by another name but if you eliminate those you could actually take rates to 8% up to $70,000, 14% up to $210,000 a maximum rate of 23% you could take the corporate rate to 26% and you can go to a territorial system which will bring all of those trillions of dollars are billions of dollars back to the country that are captured overseas and create jobs over here. so i hope we will reform the tax

code. lastly we do have to cut spending and we have to cut spending wherever we find it. we can't just deal with domestic discretionary spending. you know, the democrats as near as i can tell from reading the paper are talking about cuts of $10.5 million in discretionary spending and republicans are basically talking about 61 billion-dollar tax. but let me tell you something. $61 billion out of a 3.7 trillion dollar budget is 1.6%. i can cut my budget 1.6% tonight by tomorrow morning. if i took $625 million out of a 3 billion-dollar budget at the university of north carolina. 1.6% is nothing. the problem is that you all are focusing on taking 1.6% out of a very narrow part of the budget, out of 12% of the budget so some

of the cuts are having a disproportionately adverse effect on certain groups of people. but if you are talking about the gross amount of 61 billion, hey, stop it. we take 1.7 trillion dollars out of discretionary spending. we take 430 billion dollars out of health care spending. we take $215 billion out of other mandatory spending and we get social security solvent for 75 years. our plan reduces the deficit by $4 trillion. it takes the debt-to-gdp ratio to 65% by 2020 and 260% by 2023. it cuts the deficit in half by 2015, two 2.3% of gdp. the president acid to get to 3% of gdp.

eventually to bounce. i came here today simply to ask you to act. i know these cuts are politically difficult, but this is not a decision we can postpone. we have got to act and we have got to ask now. if we do, the future of this country has never been brighter. we can compete with anybody, but we have to get our fiscal house in order. thank you mr. chairman for allowing me to come. >> thank you. i think you have made the case about as clearly and persuasively as it can be made i want to thank you both for again the leadership that you have provided. let me ask you this. what happens if this doesn't get done? in other words, erskine and i

didn't give all the bona fide of erskine bowles when i introduced them but this is a man who is chief of staff of the united states, head of the omb and head of the small business administration has been the administrator for the college system, the university system and the state of north carolina. a pretty good set of bona fides and every place he has served he has produced results. let me ask it again. what happens in your judgment to the united states if we fail to get an agreement in the range of what the commission concluded was necessary? speedy hearing what he said about me reminds me of when my uncle sam died in north carolina, and the obituary editor of the greensboro daily news called to ask about it and my aunt went on and on about all the things he had done.

finally he said ms. bowles you do know who we now charge $5 award for every word be put in the paper. she said oh no i didn't know that. she said in that case just put it in there that sam died. [laughter] >> i thought you were going to say the one about look in a casket and see if that really is your old man. [laughter] you know, al said and i used to say that i got into this thing for my grandchildren. i have eight grandchildren under five years old and i have one more in a week. my life is wonderful and it is wild. but this problem is going to happen long before my grandchildren grow up. this problem is going to happen like the former chairman of the fed said or moody said.

this is a problem we are going to have to face up to. it may be two years. it may be a little less, maybe a little more but if our bankers over there in asia began to believe that we are not going to be solid on our debt, that we are not going to be able to meet our obligations, just stop and think for a minute what happens if they just stop buying our debt. what happens to interest rates? and what happens to the u.s. economy? the markets will absolutely devastate us if we don't step up to this problem. the problem is real. the solutions are painful and we have to act. >> allen do you want to add to that? >> i would just say, and i know it is repetitive, if you can understand here with the people

of america as we travel around and we do stuff. we go to the business council's. we go to the conservative group in dallas, the policy institute, the economic club of new york and wherever we go, people get it and then we tell them that if they just go to the internet and go to www.fiscal commission.gov, it is 67 pages. if we leave that out they will never read it you see because they say oh my god it must be as high as this box. it isn't and it wasn't risen to four politicians are panderers. it was written for the american people and they use terms like going broke and shared sacrifice. let me tell you what was stunning for us. there has never been any sacrifice required of the american people since world war

ii, except for our military, god loves them, and that is the sacrifice and they chose to do it. they are volunteers. and so when someone says well, you can't use that word, well the american people are using that word. it is called shared sacrifice. and it is a puzzling thing, and it is the right and the left. they are not involved in social issues deeply. they just now have risen to number one or good jobs, very important and this number one or number two copies the debt. they understand that. because in their own home they have been wiped out by debt. the first thing that anyone did during this crash that had any brains at all was to gather their loved ones around and say we have got to get out of debt. that is first. and you know my wife and co-and lucy has saved you many times.

she said they had off, al. in graybill we paid cash. so i said okay, it's a deal. i guess i think it would come before two years. i think that when the people that hold this paper look around and all you have done is cut waste, fraud and abuse, foreign aid, air force one and the losey's aircraft in all this in congress pay that they know that you didn't get anywhere. you've got to 5% of the whole length they are going to say you didn't do it and when the debt limit extension comes up you have got about 85 guys over there saying hey i am never voting for that under any circumstances. they say wait a minute and then you will hear the cracking of knuckles and elbows as they say if you don't do this you are going to impair the full faith and credit of the u.s. and might even have to shut the government some of them are going to say

that's why i came here. at that point there will be a sound of loan against flesh but at that point to matt, i can't imagine shutting the government. our party tried that once and it was just about the biggest disaster that i have ever seen. >> at noon wednesday the senate will consider funding for the rest of fiscal year 2011. a vote on final passage of the measure is expected at about 3:00 p.m. eastern. today on the floor senator mark warner spoke about the federal budget and the proposed cuts. this is 10 minutes. >> mr. president, i rise today to add my voice to the debate that has been going on in thisn chamber about spendingropo proposals. and how we get through the balance of this current fiscal year and ensure that we don't end up with a government

shutdown and some of theircu repercussions that will come about excess of that. mr. president i represent a state that is not only aes disproportionate share of federal employees but also has a large number of private sector employees that rely upon predictability from the government. and unfortunately, these kind oo lurching from two-week extensions we are not providing that predictability. mr. president, as you know, iis strongly believe that this is a moment in time for this body ane our colleagues in the the house and the president and others to come together regarding the question of how we no longer simply look at our debt and deficit on a piecemeal basis but we actually take on this issue in a comprehensive basis as so

many elected officials and financial officials continued te make. as a matter of fact mr. president i came earlier todayy from testimony provided y former senator alan simpson and erskine bowles about the consequences of our failure to act if we don't get ouref comprehensive deficit and debt under control. it is a problem that is not going to get any easier. every day we fail to act we had $4 billion to our national debt. unfortunately, some of the proposals coming particularly from the house at this point, the house budget plan says nothing significance to address our long-term deficit and debt.r issues. mr. president i travel around virginia and yesterday i was with her colleague senator chambliss where we met with literally hundreds of business leaders from across centralvi virginia.

and their message was clear. no more games, no more showmanship, get something done and that something they want done is a comprehensive approaca to our nation's fiscal challenges. that will mean yes, cutting down on spending. that will mean as well making our tax code more efficient so american business can grow and compete. it will also mean at the same time recognizing as part of that tax reform effort adding revenues because trying to deal with this problem on simply cutting or simply taxing will not be sufficient. f folks across from jane -- virginia and across montana are saying as well this is a moment in time we have got to put everything on the table and we have got tond ensure that werm actually provide a long-term t solution.ng one of the things that has been most frustrating as i have

listened to this current debate about cr's and what we are going to do for the balance of this fiscal year is that the debate has focused almost entirely onod the spending cuts proposed from the house on domestic discretionary 60 plus billion dollars at the house of all comes from that one narrow slice of the pie. discretionary spending accounts for less than 12% of our federal spending. you cannot fault the $1.5 trillion current yearit deficit or the over 14 trillion-dollar long-termri debt without going beyond that 12% of our budget. and what is particularly i thinl should be particularly challenging to our colleagues is the fact that every day we fail to act we are seeing not only

our debt grow but we are seeing the amount of taxpayer dollars that we have toar spend to pay f current interestay rates or interest payments continue to rise. i as a matter of fact it isome expected at some point over the next three or four years, the amount that we pay out of every dollarnt collected simply on interest, simply on interesteed will exceed the 12% of ourrt current spending on domestic discretionary spending so all of this current fight about these t current cuts that are being proposed all will be subsumed ia interest payments that we wills all have to make as americans. dollars that quite candidly don't go to build another school, to make another investment and build another road. dollars that are not recycled in this country but increasinglyne

are owned by folks abroad, increasingly hire bankers in asia and a disproportionate number from china. so mr. president when we have a chance to vote on h.r. 1 this b afternoon i will be voting no.g i will be voting no because i think this narrow focus on domestic discretionary spending only four cuts will not get us to the point of where we need to be in terms of long-term deficit reduction. and let me just again point out where i think the house proposal is so short-sighted. one of the things erskine bowles and alan simpson said today, there is no silver bullet int in this challenge we have in front of us. is going to take significant spending cuts. it is going to take looking at the revenue side through the aspect of tax reform but those twose things, revenues and spending still won't get us out of this problem. we have got to have a third lego of the triangle in the third leg of the triangle is growing i

economy. we want to growing economy in a place where america is still thg world's leading economy does not drive the economy the way it did even 20 years ago. when we saw 20 years ago thatve the world would have to wait on america to get its financial act together. the world is not waiting right now. b china, india brazil countries abroad are getting ahead. for going to remain competitive we have got to continue to invest smartly. the president said we have to make sure we educate. we have to invest in our of the structure and we haveat got to o able to out innovate and that means targeted research and development. unfortunately the house proposas on domestic discretionary to the exclusion of other areas of spending, but it also locus as s these cuts on remaining six to seven months of our fiscal year makes a disproportionate whack out of the key areas where wee must attain certain levels of investment if we are going to

grow the economy to make sure the other cuts and the other revenue won't have to be as draconian. let me give you a couple ofi examples.ng i know the presiding officer comes from an energy rich state. he also realizes we have got to diversify our energy mix in this country are no longer bepe dependent upon foreign oil. one of the things that those of us who have followed the benefits of the internet over the last 20 plus years are quick to point out that the internet came p about because of initial government investment through arpa. that led to the development of the networks that created theop internet that has spawned tremendous economic growth in this country. i believe and i gi think any o colleagues on both sides of the aisle believe that we need a similar investment in the energe field. well, that was created the arpa-e program at the department

of energy.if if we move forward with the house budgethe proposal that a t of billion dollars out of the kind of a sick research we need to make sure we have got a full portfolio of domestic energy sources. renewable energy sources. i for one believe that they also have to include conservation, nuclear, increase continued domestic oil and gas and coal. all of these have to be part of the mix but we have to do it in a smarter and cleaner way and right now at this point a sick next-generation research and development of the same kind of research and development that ie the i.t. field created thee internet would be short-sighted and i think most business folks mind. another area, america we have to get our health care costs under control. get heart of getting our health care costs under control means continuing to unblock innovation per capita one of the greatest l

fields in the next 20 years and something i know the chairman of the judiciary committee has been working on in terms of this patent reform is making sure that in the life sciences area america continues to lead in terms of innovation. well, where does does that inn innovation come from in terms of government dollars beings leveraged four, five and six times? that comesan from investment in nih. unfortunately the house budget proposal cuts $1.3 billion from nih funding. if you are in stage ii or three of the next-generation cancer development drug, to have thoset cut out, to have that basic research cut rack not only in terms of american economic programs but the personal toll it could take on folks who are f desperately waiting for solutions to the disease i believe this again not a good c

job -- my policy choice at thisf moment. as we move forward as well we have to make sure we have educate our competitors. com no one believes in america's future is going to be based on b low-wage labor. it is going to be o based on a well-educated, innovative and. well timed workforce. i think we have seen and one of the areas this president has not got appropriate credit for the fans that he has advanced dramatically education reform within his proposal. unfortunately, the house bill will cut $5 billion from the department of education in over a billion dollars from the headstart o program. when we are trying to look at our kids competing with kids c from india and china does it really make sense at this point if we are going to grow our economy to slash education programs if we are going to have that well-trained workforce? so mr. president i do believe that the house proposal is short-sighted