the presiding officer: the senator from ohio. mr. portman: mr. speaker i ask unanimous consent the quorum call be dispensed with. the presiding officer: without objection. mr. portman: i rise today to offer an amendment to the underlying bill. this amendment is designed to give american employers some relief from the regulatory burdens that continue to hold back our economy and hinder job creation. this amendment is actually identical to a bill i introduced in april s. 817 which has been

endorsed by both the chamber of commerce and the national federation of independent businesses. it's the same amendment i also introduced on the small business bill the economic development administration bills and it's also part of the larger regulatory relief bill i introduced in june which currently has 22 cosponsors. last week, as we know, we heard more troubling economic news. this time it was the june jobs report which unfortunately showed the unemployment rate had actually risen to 9.2% and hiring slowed to just 18,000 new jobs. these are, of course, very disappointing numbers but much more important is about the families who are affected by it, families in my home state of ohio and across the nation who are struggling to find a job and to get the paycheck they need to make ends meet. the real discussion in washington this month in particular has been focused on the fiscal reforms and we need to get our fiscal house in order to get the economy back on track, but there are other

things that we can do as well, and one, of course, is to reduce the regulatory burden, particularly on small businesses. i hear from them all the time. i'm sure my colleagues do as well. this burden is increasing. one recent study commissioned by the small business administration put that burden at $1.75 trillion annually. by the way that's more than the i.r.s. collects in income taxes. i have been encouraged by what the current administration has been saying about these regulations, but i continue to be deeply concerned about the new regulatory costs that this administration is imposing as we meet here today on the private sector. we've seen a sharp uptick over the past two years in what's called a major or economically significant rule. these are regulations that have an economic effect of $100 million or more. according to the office of management and budget, in the obama administration and also -- and the obama administration and also the g.a.o., current administration has been regulating at a pace of 84 of these major rules per year, which, by the way is a 50%

increase over the average regulatory wrought output during the clinton administration, which had 56 major rules per year. these figures include both the executive branch agencies and the so-called independent agencies. today i was pleased to see that president obama issued a new executive order that specifically addressed independent agencies. these are the regulatory bodies that are not within the executive agencies but are considered independent. they would include the commodities future trading commission the securities and exchange commission and the newly created consumer financial protection bureau, which is subject to a lot of debate here on the floor. these are all independent agencies which are designed by law to be insulated from presidential control. this new order the president issued today and the accompanying presidential memorandum endorsed two goals. first, it asks independent agencies to participate in ongoing regulatory lookbacks.

that means looking back retrospectively at rules that are already on the books to see whether they make sense. every administration since president ronald reagan has done this undertaken some kind of a look-back, and it's important this work continue. second and more importantly, in my view, it calls on independent agencies to evaluate the costs and the benefits of new regulations. as executive agencies are already required to do under executive orders, including an executive order by president clinton and an executive order by president obama in january. i am encouraged by the words of this new executive order and presidential memorandum on independent agencies. it endorses a very commonsense principle that independent agencies no less than executive agencies should evaluate the costs of new regulations before imposing a new burden on the economy. it's common sense. it's also consistent with these amendments that i've been offering on legislation this year and the independent agency part of the regulatory relief bill that i introduced in june.

the problem is that the president's order today is entirely nonbinding because independent agencies don't answer to the president. so it has no force of law. the amendment i'm offering today would effectively right the president's -- wright the president's new request into law. so the president has now agreed with this principle. we need to expand this cost-benefit analysis to independent agencies, but we need legislation in order to do it because these independent agencies are not answerable to the president. specifically, this amendment would extend the unfunded mandates reform act of 1995 which was a bipartisan piece of legislation where i was the republican cosponsor in the house and it expands it to independent agencies. major rules issued by what's sometimes called the headless fourth branch of government are today exempt not only from the unfunded mandates reform act but also from the cost-benefit review overseen by the office of information and regulatory affairs, oira, at the office of management and budget.

so this amendment would change that. effectively making the president's order that he issued today binding on these independent agencies. they'd be required under the unfunded mandates reform act to evaluate regulatory costs benefits and less costly alternatives before issuing any rule that would impose a cost of $100 million or more on the private sector. or on state local tribal governments. based on the g.a.o. data it appears that there are nearly 200 independent agency regulations that have been issued between 1996 and 2011 that would be considered major in other words have over $100 million impact on the economy and they were excluded, again from review under this cost-benefit analysis we've been talking about. in 2009 and 2010 alone the last couple years independent agencies issued 56 economically significant regulations representing billions of dollars in regulatory costs exempt from

the standard cost-benefit analysis rules. this affects our economy in big ways. it affects jobs and our ability to get this economy back on track. closing this independent agency loophole is a reform that those of us on both sides of the aisle should join the president in supporting. this is the right vehicle to be able to achieve that. no major regulation whatever its source, should be imposed on american employers or or on state and local governments without a serious consideration of what the costs are what the benefits are and whether there is available a less burdensome alternative to achieve the same objective. this amendment moves us closer toward that goal. it's a commonsense amendment again, taking the president's executive order and memorandum of today and actually putting it into force through the force of law. thank you mr. president. i yield the floor and i note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

the presiding officer: without objection. mr. whitehouse: thank you mr. president. i rise to discuss the ongoing negotiations on the federal budget and our rapidly approaching debt ceiling. i think we all here agree that the situation we face is increasingly grave.

i believe every responsible person agrees that a failure to act on the debt limit would have awful repercussions and set back our fragile and tentative economic recovery. surpassing the debt limit could inflict a triple economic harm on our struggling economy. the economic harm of pulling 40 cents out of every federal dollar all at once out of the economy. the economic harm of shutting down every work project that depends on federal permits contracts, or regulatory approvals. and the economic harm of driving up interest rates for our constituents and for our country. we must, therefore act and act quickly to ensure that we avoid that outcome. i also believe that the debt limit presents an opportunity to make some tough decisions on our unsustainable deficits. the longer we wait to make these choices, the harder they will

be. it is my strong belief that any agreement we reach to reduce the deficits must be based on real savings and must not be made at the expense of our most vulnerable citizens. that is why i'm so concerned about reports that social security and medicare benefits have been raised as possible sources of deficit reduction. cuts to social security and to medicare benefits are unnecessary are wrong and should not be on the table. social security is not the cause of the deficit and beneficiaries of social security should not be made to shoulder the benefit -- sorry to shoulder the burden of deficit reduction. a balanced deficit-reduction package is certainly within our grasp. i want to commend our chairman, senator conrad chairman of the budget committee, for his proposal which would cut the deficit by $4 trillion over the

next decade. his plan would cut the deficit by more than the house republican budget and it would do so without cutting social security or medicare benefits. chairman conrad's blueprint would balance $2 trillion in spending cuts with an equal amount of tax loophole closers for wealthy individuals and corporations. his budget would call for shared sacrifice, not just go after the elderly and other vulnerable americans. we should not as americans balance the budget on the backs of those who can least afford it. that is why today i rise to offer a resolution is expressing the sense of the senate that any budget agreement should not include cuts to social security or medicare benefits. social security is funded through the contributions of our nation's workers and businesses. it currently has a trust fund balance over $2.5 trillion and

is projected to be fully solvent for another quarter century. so while i'd agree with steps to strengthen social security, it is a vital program any changes should be considered independent of this effort to reduce the deficit and under no circumstances should we cut social security benefits. indeed the solvency of the program can be extended significantly just by applying payroll taxes to a greater portion of the earnings of millionaires and billionaires. what we should never do is to put elderly americans' security to risk in the stock market or increase the retirement age or cut benefits through backdoor methods such as lowering the cost of living adjustment. mr. president, like you i've heard from hundreds of folks from my home state. rhode islanders who agree with me and particularly the rhode island seniors that i've listened to at community dinners and senior centers throughout

the state who are concerned that they have already gone two years without a cost-of-living adjustment when prices are going up all around them. awed dpri middletown told me that after his husband died, she had many expenses but no income except nor his social security check, which enabled me to go on living she said. simply, but adequately, without being a burden on my sons and losing my dignity as well. ronald from cumberland, rhode island, has been on social security for a number of years. he wrote me to say "it seems that it's always the people that need the help the most who get cut from the federal government. why is this? no social security cola for two years, yet prices for the basic needs still rise. in a country like the united states of america this should not happen." the threat to medicare is just as real. earlier this year, house republicans passed a budget that would in ten years put an end to the medicare program as we know it.

estimates suggest that their proposal would end up forges a typical 65-year-old senior to pay, on average $12,500 each year in out-of-pocket expenses starting in 2022. more than double what is senior is estimated to pay under the current system. in rhode island, where the average senior only gets about $14,200 per year from social security charging an average $12,500 for seniors would be an exercise in poverty creation. the republican budget would also throw seniors right away in the next year back into the medicare prescription drug doughnut hole that we have just begun closing through the affordable care act and it would eliminate the lifesaving preventive services that were added by that health care reform law. cutting medicare benefits is the wrong approach to balancing our budget especially while

republicans continue fighting to protect every single tax break every single loophole, every single earmark in the tax code enjoyed by millionaires and billionaires and by corporations, many of which pa no taxes at all -- pay no taxes at all. medicare and social security are cornerstones of our nation's prosperity and they benefit all of us. these programs allow americans to live their lives free from worry about their retirement security, for the we will far and health treatment of their -- for the wellf fare and health treatment of their parents. while we should always be open to improving these violate programs, we must not cut the benefits our seniors and disabled americans have earned and rely upon. i'd like to thank senators blumenthal sanders senator

sherrod brown, you are servings the presiding officer, senator merkley, and senator franken for their support in cosponsoring this resolution, and i hope that my colleagues will join us in protecting the promise we have made to our nation's seniors through social security and medicare. in closing mr. president the challenge before us is a formidable one but i truly believe we can reach an agreement on the deficit and debt ceiling without compromising the security and well-being of our seniors. i thank the chair, and i yield the floor. mr. president, on the pending mexico, i ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. the clerk will call the roll.

vote:

vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not on this motion, we have 69 yeas, 27 nays. the motion to proceed is passed. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: could we've order in the senate, please. the presiding officer: order in the senate. please. mr. majority leader. mr. reid: thank you, mr. president. mr. president -- the presiding officer: clerk will report the pending motion. the clerk: calendar number 93, s. 1323, a bill to is reserve the sense of the senate on shared sacrifice in resolving the budget deficit. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: the senate has just adopted the motion to proceed to our bill to express the sense of the senate on shared sacrifice

-- the presiding officer: the senate will be in order. mr. reid: mr. president, the senate has just adopt add motion to proceed to our bill to express the sense of the senate on shared sacrifice in resolving this budget deficit that we've been so concerned about. it is my understanding that the minority has amendments that they would like to have considered. i'm happy to work with the republican leader to figure out a way for this to happen. in the meantime, i need to push forward. we all immediate to push forward. so i'm going to fill the tree and file cloture on this bill. but i am happy to continue to talk with republican leader and anyone else that's interested in having specific amendments to this legislation that we're now on. i'm not grg to allow this legislation to be dogged down by by endless -- by endless lists of amendments. it is to important to reassure

all americans including millionaires and billionaires and corporations contribute to the collective effort to reduce this deficit. mr. reid: this is commonsense that we should believe in simple fairness. middle-class families and seniors have already been asked to sacrifice too much. democrats have gone on record saying that the wealthiest of the wealthy should be asked to contribute to this effort and make similar sacrifices. we hope our republican colleagues will finally join us in this effort. over the past several weeks i've had good conversations with the republican leader and the chairman and ranking member of the appropriations committee. about trying to work through appropriation bills under regular order. as a result of these conversations --

-- as a result of these conversations mr. president and in effort to move forward i am going to file cloture on the motion to proceed to the military construction-v.a. appropriations bill tonight. hopefully we can show the senate that we -- and the country that we can work through an important appropriation bill without getting bogged down. remember there's different rules on these matters. you can't deal with legislative matters on appropriations bills. so i would hope that we can have some amendments on our sense of the senate resolution dealing with having the wealthiest of the wealthiest contribute to our problems we have in this country with the deficit and -- and following that, i hope that we can move to military construction-v.a. our servicemen need this. our veterans who have served our country so well they're certainly in need of our help. so mr. president, i have an amendment which at the desk.

the presiding officer: the clerk will report. the clerk: the senator from nevada mr. reid, proposes an amendment numbered 529. at the end add the following new section section 2 effective date. this provision of this act shall become effective three days after enactment. mr. reid: mr. president on this amendment, i would ask for the yeas and nays. the presiding officer: is there a sufficient second? there is a sufficient second. mr. appears to be. the yeas and nays are ordered. mr. reid: i now have a second-degree amendment at the desk mr. president. the presiding officer: the clerk will report. the clerk: the senator from nevada mr. reid proposes an amendment numbered 530 to amendment numbered 529. mr. reid: mr. president i have a motion to commit the bill with instructions which is also at the desk. the presiding officer: the clerk will report the motion. the clerk: the senator from nevada mr. reid, moves to commit the bill s. 1323, to the committee on finance with

instructions to report back forthwith with an amendment numbered 531. mr. reid: i would ask for the yeas and nays on this, mr. president. the presiding officer: is there a sufficient second? there appears to be. the yeas and nays have been ordered. mr. reid: i have an amendment to the instructions at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada mr. reid, proposes an amendment numbered 532 to the instructions of the motion to commit. mr. reid: i ask for the nays and yeas and nays on this amendment? the presiding officer: is there a sufficient second? there appears to be. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada mr. reid, propose amendment numbered 533 to amendment numbered 532. mr. reid: i have a cloture motion at the desk, ask the clerk to -- the presiding officer: the clerk will report. the clerk: cloture motion. we the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close the debate on

s. 1323 a bill to express the sense of the senate on shared sacrifice in resolving the budget deficit. signed by 17 senators as follows follows: reid of nevada durbin, murray inouye, coons whitehouse boxer casey sanders lautenberg brown of ohio, reed of rhode island, feinstein merkley cardin, levin, schumer. mr. reid: mr. president i now move to proceed to calendar number 91, h.r. 2055. the presiding officer: the clerk will report the motion to proceed. the clerk: motion to proceed to calendar number 91, h.r. 2055 an act making appropriations for military construction, the department of veterans affairs

and so forth and for other purposes. mr. reid: i have a cloture motion at the desk, mr. president. the presiding officer: the clerk will report the cloture motion. the clerk: cloture motion. we, the under undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, hereby move to bring to a close the debate on the motion to proceed to calendar number 91, h.r. 2055 an act making appropriations for military construction the department of veterans affairs and related agencies for the fiscal year ending september 30, 2012, and for other purposes. signed by 18 senators as follows. mr. reid: mr. president, i would ask unanimous consent that the reading of the names be waived. the presiding officer: without objection. mr. reid: i ask unanimous consent the mandatory quorum required under rule 22 be waived with respect to both cloture motions. the presiding officer: without objection. mr. reid: i now withdraw my motion to proceed. the presiding officer: the motion's withdrawn. mr. reid: mr. president, i would ask unanimous consent that we

now proceed to a period of morning business, senators allowed to speak for up to ten minutes each. the presiding officer: without objection. mr. reid: i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. president? the presiding officer: the senator from colorado. mr. udall: mr. president i'd ask unanimous consent that the quorum call be lifted. the presiding officer: without objection. mr. udall: mr. president i rise today to honor one of colorado's great educators and community leaders, david getches who passed away on tuesday july 5 2011, at the too-young age of 68. mr. president, this is more than a poignant moment for me. i had planned to come to the floor and discuss david getches' career and character because he was stepping down after eight very productive years as the dean of the university of colorado law school. and we all have had this terrible experience in our lives where somebody who we love and respect suddenly finds that they

have a cancer that's aggressive beyond aggressive and just literally a month ago, david was diagnosed with pancreatic cancer. and in the four weeks since that time and today that cancer stole him from us. but he was always upbeat. he was always someone who we looked to for enthusiasm and inspiration, and i'll be inspired my remarks today by what he did and i'll attempt to not dwell on his loss. as i said, dean gechez served as the dean of the university of colorado law school and with him at the helm, it became one of the most forward-looking institutions of legal training in the country. and i want to share a few examples of his vision and leadership. i couldn't cover all of those

examples if i had a full hour. but i want to share some of those with the senate and with his friends and admirers. he steered the school through the construction of the new lead-certified wolf program which put the law school at the cutting edge of sustainability and energy efficiency, two ideas that were intimately connected to the values that gechez was committed to fostering throughout his career. he had served previously as the executive director of the colorado department of natural resources and as an advisor to the interior secretary in the clinton administration, and he had an extensive background in water, environment environmental and public lands law. through his work, gch echez impressed upon all coloradans the importance of good stewardship of our state's precious natural resources. i do know that dean's efforts to teach and share the legal framework that protects our resources could not have been

more critical to presesqui our western way of life. david gechez's also left a lasting impression on the law school. he was comiflted to a student body composed of people from many different backgrounds and cultures and that commitment made ann delible imablght on the school and on the legal commun n2008, the hispanic bar association awarded him their community service award for increasing hispanic enrollment and he also assembled one of the most diverse administrative teams of any law school in the country. he didn't stop there, however. he then create add commission to produce a groundbreaking report on diversity in the legal profession and how to increase diversity in law firm recruitment. and in the high lee skilled and diverse alumni of the c.u. law school reflects his efforts and successes. david gevment chez's also built a legacy of legal education for

awvment he worked to expand scholarships and financial aid awarded by the law school to worthy students regardless of their financial background. increasing scholarship awards from $600,000 in 2004 to a hefty $2.1 million in three short years, by 2007. in 2008, he worked with the colorado state legislature to pass a law allowing public universities to offer loan repayment assistance grants to graduates practicing public interest law and more recently founded an endowment towards grants to c.u. law school graduates in the public sector. what dean getcees did was make public service a viable alternative to private practice for bright, idealistic graduates of the law school. without question, those students c.u. law school, state of

colorado the country will reap the benefits in the future from david getchezs's efforts. i think we know we all can learn from dean david getches passion for giving back. he led a life of service and he also compiled an impressive academic record as well as serving as the dean of the c.u. law school. and he was at his core committed to the future of his children, our children, our grandchildren and his grandchildren and he had a deep love for the western -- rocky mountain western way of life. he was an avid outdoorsman, he was fit any physical challenge he as ifed just like he faced intellectual and emotional challenges. as i said in my beginning remarks, he was a mentor to all of us.

and he always had his eye on the future and i know as painful as it is for all of us who knew him to lose him so suddenly, he would want us to be focused on the future. dean getches did this and much more for colorado and our curntion and i want to close with this, mr. president: we've lost a unique man and a towering colorado figure. mr. president, i yield the floor. mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: mr. president the situation involving the need for a budget and the situation involving the need to raise the debt limit for the united states is getting more and more crucial, it seems by the hour. i have been a firm and consistent critic of this idea

that's been developing the last several years in the congress that a few people meet in closed secret meetings and somehow reach a decision that i'm supposed to assume is good and decent and ought to be conferred by a vote here -- confirmed by a vote here in the senate. and i feel that there are 100 senators and some a lot smarter and more capable than i but i feel a personal sense of obligation and duty to ensure that when i vote on an important piece of legislation, that my constituents care about, that i know what's in it, and i understand what's in it and it's hard to know. when you have a bill that comes out that proposes to have changes in the trillions of dollars involving federal spending for a decade and a budget or some other fashion it

requires us to be careful about that. so i would express again my dissatisfaction and belief that this senate -- not the house really -- the senate has failed in its duty to participate in an open process concerning our budget. the house of representatives did did. the republican house promised to have open hearings. they had a bill on the floor a budget. they passed it within the time required by april 15. it completely changed the debt trajectory of america puts us on a sound footing. it reduced spending by $6 trillion not $2 trillion -- $6 trillion. and it didn't raise taxes on the american people. in fact, it reduced taxes in a way that they felt would

engender better economic growth, which is the best way to engender more tax revenue is having more people make more money and pay more taxes. so that -- the house i really believe, fulfilled their constitutional duty. well, in the senate we've now gone well over 800 days without a budget. we didn't have a budget when our democratic colleagues had 60 senators, the highest number that one party has had in probably 70, 80 years maybe longer. they didn't pass a budget. you can pass a budget with 50 votes, 51 votes. thewith the vrntion vice president 51 votes. budgets were passed when parties only had a one-vote majority in the senate. it is an odd, odd thing that we have gone two years without a

budget. but it is not odd that in part because of that no budget, we've seen the largest surges of debt the nation h's ever seen -- the nation has ever seen. president bush was criticized for running up debt. he had in one year his last year $450 billion deficit. he was roundly criticized for that. some of that was this tarp money that they scored as money spent and it was properly, accurately scored. so it came out $450 billion. the year before was $160 billion deficit. president obama's first budget deficit was $1,200,000,000,000. his next budget, $1,300,000,000,000. this year's budget, by september 30, is projected to be around

$1,500,000,000,000. we haven't had a budget. is anything connect there? and so i want to say, first of all, one of the ways that you act responsibly is when you do it out in front of the people. i notice president obama today at the press conference, when asked about some of these matters, pushed back and said, well wept to have an agreement -- we want to have an agreement right now. we don't want to wait any closer to the election. and he was basically saying -- it is pretty clear really; i'm not exaggerating anything. he was basically saying, when you get close to the election, senators a and congressmen don't like to sphroart more debt and they don't like to vote for more taxes. so what's wrong with that? the american people don't want debt. they don't want taxes.

they want us to bring this government under control. but that's what they're suggesting. oh it's politics. something corruptly political if you believe that you shouldn't bail out the big spenders in washington by taking more money from hardworking americans. and taking it out of the private sector to give to the public sector that has mismanaged the money that they have. well you had these big deficits. it's because y'all cut taxes. we haven't cut taxes in years. president bush cut taxes. revenues are much higher today than when those taxes were cut. we've gone into an economic decline n. and this recession

has real estate duced our income -- has reduced this income. that is the truth. it is not so much the rate of taxes. it is the rate of provment. it is the rate of income. it is the rate of money if people -- people are being paid. so they don't have as much money and they are not paying as much taxes. we can run around and try to find anybody left with money and try to tax them but at some point that begins to be self-defeating. so i guess i'm trying to raise the point how did we get here? well, there is another way we got here. these huge deficits that we have. in the keynesian philosophy of economics we had a big spending bill called the stimulus bill. i opposed it. i remember reading nobel laureate professor becker of the

university of chicago's piece not long before the vote saying it was not going to create jobs. it was not sufficiently stimulative to be a good stimulus bill. a fact in his mind as a nobel prize-winning economist. that's exactly what happened. it didn't create jobs. it went to social programs. it went to state aid. it went to things other than the infrastructure that we were told it was going for. only 4% of that money went to roads and bridges. 4% out of $850 billion. every penney penny borrowed to create, stimulate jobs, they said. we're going to redon't our infrastructure, they said. it with a not done that way. it was social spending overwhelmingly. and it didn't create growth and

economics -- in the economy. so i'm -- and then another reason we have the debt is because the baseline spending was surged under the democratic leadership and president obama. non-defense -- defense department has gone up 3% or so the last couple of years in spending. non-defense discretionary spending, the things that we do, like energy programs and road programs and aid and grants and things we spend around, that went up 24% in taboo years. -- in two years. t-and we're having a dropoff in income a dropoff in tax revenue revenue, and we increase spending dramatically. we never had 10% -- 12% increases in spending a year. and hold your hat.

the budget that the president submitted to us in, what, i believe february of this year, several months ago proposed increases for the education department of 10.5% proposed increases for the state department 10.5% 9.5% for the energy department, and 60% increase for the transportation high-speed rail projects. we don't have the money. all of that would have been borrowed. we couldn't have sustained flat spending without borrowing money. 40 cents of every dollar we spend today is borrowed. so i have been a big critic of this scheme to meet behind closed doors not tell the rest of the congress or the american people what we're doing and to plop down on the floor of the senate some proposed deal that we have to sign at the 11th

hour or the government's going to shut down. why haven't we been talking about this? they talked about it in the house. they voted on it. they reduced spending $6 trillion. our people are saying, claiming in the phantom budget that's been talked about by our democratic colleagues, one they never produced so it can actually be accounted for they claim it would reduce spending $2 trillion, and they're patting themselves on the back about how great they are. but when you take out the interest savings that occur it's only $1.4 trillion in actual reduction of spending. it's a 2.7 we estimate, increase in taxes. senator conrad, the chairman of the budget committee and our presiding officer senator manchin from west virginia is a

member of the budget committee as i am, he does a good job. he is a smart man. he understands, i think the threat america faces. i thought he did although the budget proposal, this phantom secret budget that they just leak out descriptions of whenever it's convenient, has not impressed me really. it just hasn't been impressive. is it a vision. is it a specter of some kind of a budget that nobody can ever grasp their hands around? and it's only what the people who are holding it close to their vest say it is, and all of the rest of us have to accept that? i don't think so. let me tell you, i have become very very uneasy about what we hear in this city of washington about plans and policies.

when president obama announced his budget, it was the most irresponsible budget this country has ever been presentd with by a president. i don't think anybody can dispute that. i'm prepared to defend that against anybody who said so. it increased spending, increased taxes. over a decade, it increased taxes and it increased spending and made the deficit worse than if we hadn't done anything, at a time when the nation should have been working from january till today figuring out how to bring this government under control and contain the growth in spending and contain the debt. he announced -- this is what he said and his budget director at the committee said, mr. lew that our budget calls on us to live within our means and pay down the debt. and the congressional budget office scored the budget.

they analyzed it over ten years. the lowest single annual deficit that was occurring during that time was $750 billion. the lowest deficit almost half, again, higher than president bush's highest deficit. and it starts going up in the out years eight nine and ten to back to over $1 trillion in the tenth year annual deficit. interest on that debt that would be accrued by such an irresponsible budget would go from around $200 billion last year or 240-some-odd this year to $940 billion in one year. that would be larger than medicare larger than social security larger than the defense budget, including the war. much larger than those. so interest is a danger.

now, senator conrad talked this afternoon about his phantom budget and he told us a lot of things he wanted us to know about it, and he articulated in a way that made you think that's not such a bad idea, but we've got real number people, just like president obama said his budget was going to pay down the debt and cause us to live within our means when it had no deficit lower than $740 billion. so he said it's a blueprint. he said it's a framework. he didn't say it was a budget, because it's not a budget. a budget is a document that can be read, ascertained evaluated and scored. so they leaked to "the washington post," not to the members, the colleagues of the senate here.

they leaked to "the washington post" some of the good things he wanted to get on, and then they talk about some of the good things here today. forgive me if i'm not impressed. if it's such a good budget, yes don't you print it up and propose it to us? that's what the house of representatives did. they're prepared to defend their budget. and, senator conrad said this, that he thought it could play a part in this big deal the president is talking about to change our debt trajectory in a positive way. well those words are good words, just like the president's statement that he had a budget that was going to cause us to live within our means and pay down our debt. that's what he said. that's what his budget director

said. you can say things. it doesn't make it true. i can say i'm not standing -- i don't have a desk in my hand. but i've got a desk in my hand, reality being what it is, you know. so, that was not a good budget he submitted and i'm worried about this phantom budget that we're hearing about today frankly. so the way we calculate this phantom budget and the things that have been released about it, it would raise taxes as much as $2.8 trillion and cut spending about 4% over the ten years -- this is a ten-year budget -- at a time when we are projected to add, under the president's plan $13 trillion to our national debt. so we're going to reduce the

debt by 4%, from $13 trillion, an utterly unsustainable figure. the house budget, as i said, would cut discretionary spending $6 trillion. the toomey plan would have cut spending $8 trillion. senator conrad actually said on the senate floor that his budget which raises taxes as i kaeutd, he said -- indicated he said it would reduce taxes by $700 billion. he said it would reduce taxes by $700 billion. how is this accounting accomplished this trick i would suggest, accomplished? to get to that number, he's obviously compared it to a c.b.o., congressional budget office baseline, which assumes that every single tax rate from 2001 and 2003 tax cuts that have

been in place now almost a decade are going to expire, and all those rates go up. so he's saying if he keeps a little of them from going up, he's cut taxes. only in washington can you raise taxes dramatically, change the tax rates that have been in place for a decade, see taxes go up dramatically and call that a tax cut. and, by the way baseline is very important. we don't know what baseline that the chairman of the budget committee is using. he understands it very well. he's one of the most knowledgeable, capable members of our body, and he understands these well. i believe the phrase he used was it's a plausible baseline. a plausible baseline. well let me tell you the baseline we should use. the baseline, when you talk

about whether or not spending increases or whether spending decreases should be what you're spending today. and if you're spending $100 billion today you spend $102 billion, you spent $2 billion more. if you spend $98 billion you spent $2 billion less; right? what they do in washington, and the reason this country is so close to bankruptcy, is they assume growth rates baseline growth rates. then when you reduce the baseline growth rate, tanned's going -- and it's going up $10 billion next year and you reduce that increase to $9 billion you claim you cut spending by $1 billion. and it went up $9 billion. that's the kind of logic that has put us in the difficult decision we're in. so i have decided and told my staff on the budget committee when we get numbers we're going to compare it to the only thing

that's solid, and that's a level baseline. does it go up? does it go down? the ryan house budget that cuts $6 trillion still increases spending. it's not a real cut. so you do have to figure out how much you're talking about and what baseline you're using to know what the numbers are and the best way to do that, the most objective way to do that is use a flat line number and see whether we're up or down. and then we can communicate. but if you get to choose your baseline -- and c.b.o. has one the president has another. it looks like the senate democrats have chosen another one. they call it plausible baseline. i don't know what that means. the debt commission that had their recommendation for using that they chose another baseline. and it makes it hard to know.

so when you talk about a budget that's supposed to really make a difference in our economy and you propose $2 in tax increases for every $1 in spending cuts and suggest this is the kind of thing that you're working with the president on their negotiations maybe we can begin to understand why the members of the house and members of the senate who are being in these meetings have been walking out of these meetings and saying all they want to do is raise taxes. now the president himself said several months ago he thought $3 of spending cuts and $1 of tax increases would be a good mix. what we're hearing today is $2 of tax increase to $1 of spending cuts. that's not acceptable, has no

chance of passage. and if the american people have time to read that kind of legislation and find out that's what is in it, they're not going to be happy with anybody that supports it, in my view. so perhaps that's the reason they want to wait until the 11th hour, claim the country is about to shut down and try to force it through. you know, as the president suggested, you don't want to get it too close to the election when people might remember what you did to them. and goodness gracious, talk about a $900 billion cut in the defense department, that's part of their plan, too. let me just tell you how that gimmick works. you propose a $900 billion cut in defense department and you know that that 20% cut is not going to become law but you go out and tell the public you

saved $900 billion. you plan to cut it from the defense department. and you can't cut that much money from the defense department. so no wonder our retiring fine senator joe lieberman, after the democratic discussions of this, was moved to say -- quote -- "he was worried about what such a budget would do to our national security. well he should be. i've been on the armed services committee. i don't deny that the military has gotten to tighten its belt just like every other department of this government. it may even have to take a real reduction in spending, but we're not going to have an 18% 20% reduction. it can't be -- we're going to have our men and women who place their lives on the line for us, going to have them have to pay

for profligacy in washington? i don't think so. well mr. president, i would ask is majority leader reid, who i believe is the strategist in the senate who told our chairman, senator conrad, that he should not bring up a budget. i think senator conrad was tpraoepd bring up a budget. he was working on one his staff was working on one. we were within days of a markup. he was going to produce a budget. those of us on the republican side had amendments to offer and we were preparing for a debate and they decided not to have it, all of a sudden not to have a markup. and later senator reid said it would be foolish to produce a budget.

i'd say it would be foolish for the congress of the united states to take a paycheck and operate the way we're operating when 40 cents of every dollar we spend is borrowed. that is just unthinkable. how did we get in this position where we're spending $3,700 billion and taking in only $2,200 billion and all the difference is borrowed? and finally, this is really important. a lot of us have heard these numbers but it has not resonated with us about how important they are. professors rogoff and reinhart have written a book called "this time it's different" studying eight centuries of sovereign governmental default on their debts, the kind of things greece is going through today and

they've analyzed how it happened and the consequences and which he chose the name because they said every time politicians ran up debt in their country to high levels and caused a crisis, they say well, it won't happen to us, this time it's different; we're different than those other countries that went belly-up. and then it happens just like that. savagely immediately like the financial crisis that hit us in 2007 and 2008. and what they concluded in further study was something else. not only when you get your debt too high do you run the risk of a financial crisis but your debt slows your comib growth -- your economic growth and that countries who have deficits debts that equal 90% of their economy -- i see my good friend,

senator reid, with the toughest job in washington and i'm not making it any easier for him -- it would be good for him to hear this. i think he knows it. but they have concluded when your debt total american debt reaches 90% of our economy our g.d.p. and goes above that it pulls down your economic growth by 1%. c.b.o. now is scoring our growth to come in at .9% below what it otherwise would be because of our debt. the first quarter we had 2% economic growth. if we'd had 3% economic growth, that would be a 50% increase in growth. if we'd had 1% greater increase in growth that would amount to, according to the white house economic team some time ago an increase of 1 million jobs in

america. so i guess what i'm saying is we've erroneously stated too often i think that the question is about our children and grandchildren. i truly believe that the sluggish growth and the very, very weak job numbers that we've been having is a result of carrying too much debt. we've got to start reducing that debt even if it's painful for us to do so. i hope my colleagues will produce a budget that will actually change the numbers. i'm not confident that will happen. failing that i do hope mr. leader and say this to my leader too that if a bill is brought forth in the senate, we have at least seven days to consider it before we're asked to vote on it. i really believe it will take that long to properly evaluate it. mr. president, i see the majority leader here.

it's always a pleasure to work with him and i would yield the floor. mr. reid: mr. president, i would say before my friend leaves the floor his leader, my friend the senior senator from kentucky and i are representing the senate along with senator kyl and senator durbin at the white house. we've been there many, many days now. and we understand all of us there, democrats and republicans republicans, the significant adverse next huge debt has on our country. everyone there is trying to arrive at a point where we do something about that. we're not there yet. it's difficult to do. we understand it's going to take a mix of -- we believe a mix of spending cuts and some way to generate some more revenue. we're working our best to get this done. my friend is right the debt is a drag on the economy. there's no question about that. and once we're able to raise the

debt limit, i think you're going to see some energy on this economy that we haven't seen in some time. but we're not there yet. i wish i could report to my friend from alabama and the rest of the senate and the country that we have completed our negotiations but we're not. we're going to go back again tomorrow. the president said 3:45 and i said a.m. or psm p.m., and it's 3:45 p.m. tomorrow we'll be back trying to move forward on this. my friend from alabama has an important responsibility as being the person who's the ranking member now of the most important budget committee and i'm sure he's learned a lot having taken this assignment that he didn't know before. that's the way it is with everyone in the senate. i learned a great -- i've learned a great deal working through the c.r., the different iterations of that and now on this work we're doing trying to arrive at a debt reduction

package along with raising the debt ceiling i've learned a lot. so i've got a lot more to learn. i appreciate my friend's intensity of things he believes in whether it's this or as the person running the judiciary committee for the republicans he's always very intense. he and i don't always agree but we agree a lot more than people think. but the one thing no one can ever take away from the junior senator from alabama is the seriousness of his being a united states senator. mr. president, i ask consent that we now proceed to s. res. 231. the presiding officer: the clerk will report. the clerk: s. res. 231 designating september 2011 as national child awareness month and so forth. the presiding officer: is there objection to proceeding to the measure? withoutwithout objection. mr. reid: reid: i ask unanimous consent the resolution be agreed to the preamble be agreed to,

the notion reconsider be laid on the table. the presiding officer: without objection. mr. reid: mr. president, i now ask that when we complete our business today we adjourn until 10:00 a.m., tuesday july 12. following the prayer and the 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 the senate proceed to a period of morning business for up to one hour with senators permitted to speak for up to ten minutes each during that time. the time will be equally divided and controlled between the two leaders or their designees with the majority controlling the first half republicans controlling the final half. following morning business, the senate resume consideration of s. 1323 which is a bill to express the sense of the senate on shared sacrifice in resolving the budget deficit issue. i ask that the filing deadline for all first-degree amendments to s. 1323 be 12:00 p.m. tomorrow. finally, that the senate recess from 12:30 p.m. to 2:15 p.m. to allow for weekly caucus meetings. the presiding officer: without objection.

mr. reid: mr. president i filed cloture on s. 1323 which is on the sense of the senate bill regarding shared sacrifice and on the motion to proceed to h.r. 2055 the military construction construction-v.a. bill. that's an appropriation bill. it's an important bill. unless an agreement is reached there will be up to two roll call votes wednesday morning on these issues. so mr. president, if there's no further business to come before this body, i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until 10:00 a.m. tomorrow morning.

congressional negotiators met with president obama to work on a debt and deficit reduction agreement. right after the budget committee chairman kent conrad came to the senate floor to describe the democrats' plan.the presing this is almost an hour.conradsk ischemic mr. president falling in the remarks the senate will resume the motion to proceed to pr s1323, to express the sharedhared

sacfice sacrifice in resolving the thet d budget deficit with the time div until 5:30 equally divided as to their the two leaders and the will b designees and 5:30 there will be to a roll call vote on the motion to proceed to test 1323. mr. president, you understand that 1340 is at the desk do foriding oicer: a second reading.he second >> the clerk will read the bill for a second time. bl >> to cut and balance the f federal budget. >> i would object to further respt to proceedings with respect to thee presidinficer: bill. >> the objection is heard. >> it will be placed under the calendar of the provisions of rule 14. by thank the chair.midst of >> mr. president, we are in the midst of a defining debate on

the budget of the united states. all of us understand we have a t threat looming over this countrye that is as significant of anything we faced in many years. sene mr. president, democratic members of the budget committee have worked for weeks to devise a blueprint of the thing has merit and deserves to be part of the debate. here so mr. president i'm here today of to outline the key elements ofnk it' the blueprint. first of all think it is critically important we all understand that we are as a tha nation borrowing 40 cents of every dollar that we spend and that is not sustainable circumstance. the would lower the chairman of incated the joint chiefs of staff has debt indicated that the national debtational secur is our biggest national security our country threat. saying the top military man in our most country saying the death threat

is the most serious national security threat.well, because h why does he seeer that?facts. because here are the facts.ebt debt of the united states and all of the debt that leo is now approaching 100 per cent of our hig gross domestic product, thehe highest level since after world war ii. this chart shows a threshold of 90%, gross debt at 90%. why did we draw that line on thehen chart?you cross because the best evidence we have tells us when you cross theny 90% threshold on the debt of any t nation, you are in the danger zone, you are in the red zone. enomist the distinguished economists kneth wrote a book growth in a time of of debt. here is the conclusion. is there we examine the experience of 44

countries standing up to twonturies o data countries of data on theebt, infla government of, inflation and main fding i growth. our main finding is that across the advanced countries and marke emerging markets high debt to gdp levels 90% and above are associated with lower growth mrpresiden outcomes.fact all o mr. president, this is a factto all of our colleagues need to know. you when gross that goes over 90% of your gross domestic product from your economic prospects areat m diminished. cated that means fewer jobs created e co less economic opportunity a mr. pr nation that is at risk.e. an mr. president, that's where we oice are. look at what the congressional budget office says is where we tra je are headed. on the current trajectory, we are headed for a debt that willof

go to 200% of the gross domestic country. product of the country and this publi is of the gross debt, this is the publicly held debt which isdebt. smaller than the gross debt so this char t now looks at the a publicly held debt and says it for is headed for 200% of gdp. on mr. president, we cannot stay on this course. it is critically important that we change direction. for every one percentage point of interest that we payr $1.3 trillion is added to the debt.out for those who say don't worry about the debt limit let's will remind them that what will occur if the united states refuses to pay the bills that it's already wil incurred is that the interest rates will go up. those that have loaned us moneyents if we remain, our commitment to the pay them will then insist on

higher interest rates all borrowers will insist on the high interest rates and for every 1% increase in interest, we will pay $1.3 trillion more who on our debt. so those who think somehow byit not extending the debt limit we are going to help on the debt the opposite is true. the debt will increase and increase dramatically. mr. president here are the the facts with respect to thending relationship between spending ars in and revenue over the last 60 years in this country. line. the red line is the spending line the green line is the this revenue line and what this shows very clearly is that hig spending is the highest it's been as a share of gdp and 60 spe years. yes, we have a spending problem but it is enot exclusively a some spending problem as some of surtor

on this floor because revenue as is the a share of gdp is the lowest it has been in 60 years. to deny that fact is to deny the required t significant element of a compromise required to solve this problem. mr. president, spending is the the highest it's been in 60 years and revenue is the lowest it has in 60 been in 60 years as a share of our national income. both have to be addressed if we are going to solve this problem. not for those who say it's not a revenue problem, yes it is. tha this is an article that appeared sunday may 1st in thepl us "washington post" and on the way to a surplus a 12 trillion-dollar u.s. detour.d remember, in 2001 we were told off we were on the way to pay off the debt of the united states.yori

this article in "the washington 1 post" on may 1st indicated theaying fundamental reasons that instead of paying off the debt we have a debt that is mushrooming.ays this one paragraph says it all.ulprit the biggest culprit by far hasax been an erosion of tax revenue and triggered largely by two recessions and rounds of tax cuts together.he the economy and the tax bills enacted under former president george w. bush and to a lesser extent by president obama wiped out $6.3 trillion in anticipated revenue. that's nearly half of the swi $12.7 trillion swing from the projected surplus to a realstand a debt. federal tax collections now stand at their lowest level as a percentage of the economy in 60

years. the point that i just made. de so mr. president, when democrats on the senate budget committees approach this problem we looked at it and and historical get p ierspectives. how did we get into this problem? half of it is on the revenue side and so we chose to deal with a solution that deals on both sides of the ledger yes to cut spending absolutely. that must be done.lso but we also cut the so-called rea tax expenditures that are really just spending by another name.sions, of loopholes, exclusions deductions, tax preferences tax abusive tax for shelters andgs in t stevens thathe rightfully belongsle avoid w in the treasury. owe t people avoiding what they legitimately owe to the united states by engaging in abusive tax shelters t and savings we will

e hou get into the specifics of that. diff republicans chose a differentf path. they want to focus on have thehe problem.e of the they only want to focus on theation. spending side of the equation. they don't want to touch the revenue side of the equation. that mr. president, that just denies reality. that runs faway from the high in reality of how did we get into this situation, and again, we ding t got there by yes spending thatn 60 is higher than it has been in 60 years as a share of national income but also revenue was lower than it has been any time in 60 years. mr. president, if we aref we're truthful with ourselves we havehave to dp to deaeel with both sides of this the equation. tt mr. president, the plan that the senate democrats on the budgetittee hav committee have agreed on lookswork

t at a budget framework that aunt includes roughly the same amount of deficit reduction as the house republican plan. in fact, we have more deficit reduction than did they. i was $3.9 billion of deficit reduction. our planas $4 trillion.differ is mr. president, the actual difference is about $50 billion rouing, but because of rounding, it turns out it's worth $4 trillion, the actualbout difference is about $50 billion more in deficit reduction. differ the plan worked by democrats onmore the budget committee. so mr. president this is what happens to the deficit as a share of gdp under the framework see that we are offering.he you can see this year the deficit is 9.3% of grossgross do domestic product. we bring we bring it down very steadily

until we get down to 1.3% in the tent here and lower deficits asdefici a share of gdp than the house thank the republican plan. le let me repeat that.crats the senate democrats on thettee budget committee, our plan the reduces the deficit by the tenth the year, by more than the an republicans in total and in the a tenth year we have a lower deficit in dollar terms and a of lower deficit as a share of gdp.s to mr. president, this is what happens to the debt itself, the out gross debt as you can see it peeks out at 100% in 2011 and then we bring it down gradually but steadily to about 98% by th 2021. o the key is instead of having the debt line going up and awayountry burying the country under a mountainou of debt, we stabilize

down. the debt and begin to bring it down. absol something every serious economist has said is essential. in terms of spending, i indicateng i the currents spending is there highest it has been as a share of gdp in 60 years. from our plan takes that down from to 24% of gdp to 23 and freezes it for the rest of this decade.l some will say there go the democrats again spending tooi would much money. s to i would say to them if we cang do get spending down for the levels durin during the ronald reagandministratio administration, would that be acceptable? because that is what we are doing. under the plan of senate budget committee we get spending to the exact same level pertained during the administration of ronald reagan. spen

during ronald reagan's defense eight years spending averaged 22.1% ofg. gdp. that is precisely what ourget spending equals in the budget h framework i outlineder here today. mr. president, we include every part of the federal budget including the defense budget. fiscomm just as the fiscal commission did and as every other birtisan bipartisan deficit reduction plan has included, we look to defense spending because no part of the budget can be off the of table in terms of aay deficit-reduction plan. separ i did say separately social curity security would deal with separately because social security need not be, should not be part of a deficit reduction plan. savings in social security oughturpose to be for the purpose of ing th expanding the solvency of social

security.f but in terms of the spending that is considered on budget, b the defense has to be included in any savings. 19. look what's happened since 1997. a spending onnd defense and the war is gone from to under $54 billion a year to 688 billion a year. it is a key reason spending has fisca explodedl. before the fiscal commission some of the defense analysts analysts the inbest defense analysts in thed country came before us and toldf us 51% of all federal employeesp. are at the department of defense all federal employees are at the department of defense and that doesn't count the contractors n't planas, contractors or their and their response was senator, we

can't tell you. i said is that a matter of security security or? clearances? no senator, we don't know.hat's i said what's the range?how man about how many contractors arehe dep there working in the department of defense? 1 >> the answer was senator, one 9 to 9 million between 1 million to 9 million. right. we can't tell you which is a s right. i mean we've got a seriousrtment ofefense problem of contractors workingense for the department of defense you h and the defense can't even tell you how many contractors they've got working for them. mr. president we've got a problem. the previous secretary of defense, secretary gates said the budget of the pentagon doubl almost doubled and she's right about that, our chart shows that, but our capability didn't mon particularly expand.infras

a lot of the money went into infrastructure and overhead andulture tha frankly i think a culture that had an open checkbook. mr. president, a lot of the money went into infrastructure and overhead and frankly a c culture that had an opene can't checkbook.an ope mr. president, we can't afford an open checkbook anywhere. frd, we've got to go after waste fraud and abuse in every we've department and g go over contrib infrastructure spending that doesn'tim contribute to improvingo the defense. we've got to go after overhead costs that have run amok.aid thi s chairman ryan of the house said sings y ou this about defense. there's a lot of savings you can.. there's a get in defense and waste over there for sure yet when theytheir came up with their plan theyg defense continued the path of increasing year w defense spending year over years the

planhat th without anyey discipline. tlined. this is the plan they outlinedear. the $7 billion a year and that doesn't count the war funding. pla mr. president, and our plan, wecommissi calle have done with the fiscal commission called for. we have achieved the same savings out of security of the se siskel commission $886 billionity fu out of the security function.ously defee that includes defense. obviously defense is most of surity security. but in the security category come also falls homeland security come also is includeds in veterans' spending, veterans spending by the way is one place is we don't cut a nickel. veterans deserve to have the promises that we have made to them kept, and under our budget

dollar every dollar that has beeno to the promised to the veterans will go to them. dsn't mr. president, that doesn't mean out of we can't save money out of the security side of and the siskel the commission which by the way isartisan the only bipartisan plan that has come from anywhere, five democrats five republicans, one plan independent and endorse the plan with $886 billion of savings the over ten years out of the security function and thettee d budget committee democrats adopt that finding. mr. president the budget democrats aren't dancing also s has a government wide savings. members of congress pay forreeze three years.ge we've tspraised the legislative branch and white house budgets for three years and civilian paythat is alr for two years. ado

that has already been adopted, but we include that in our budget. we've reduced the federal vehicle fleet by 20% because find frankly in our investigations we find in this area that there has been an explosion of the peoples in the federal fleet, and i think all of us have seen it with our own eyes this is deral something that has to be taken 20%. on the federal agencies buy 20%.1 we reduce federal printing costs by a billion dollars by 2015 and the number of contractors we mr. pr es previously described. the house republican plan on revenue is really almost impossible to believe. in whic in a circumstance in which we had record debt and a

circumstance in which the countrys revenue of this country is the y lowest it has been in 60 years what is part of their answer?d c cut taxes for the very wealthiest among us and another are the trillion dollars for those whotunate are the most fortunate among us.ircumsta i'm not making this up to leadt, to a circumstance in which we had i have record debt, the lowest revenue we've had in 60 years v and cut taxes for the wealthiest by another trillion dollars by extending the top cuts by $5 million state tax exemption. they actually cut revenue

$4.2 trillion below the cbo t baseline. it let mectua repeat that. they actually cut their plan forthe congronal b $.2 trillionud below the congressional budget office baseline. mr. president, that is inexplicable. it w maybe we can start to understand it when we look at what a former economic adviser said about the house republican plan. s mr. bartlett said this redistribution of income rollin income of house republican plan is a monstrosity. the rich would receive huge tax cuts while the social safety net would be shredded to pay for dg them. and i've even as an opening bid to beginat with the democrats, the rhine and plan cannot be takenist than seriously. it is less of a wish list than a worl fairy tale disconnected from

their real-world backed up by make-believe numbers and on reasonable assumptions. rollin and's plan he sent even an act of courage it's just pandering to a team party. an act of courage would have been for him to admit as all that serious budget analysts note that revenues have to rise to of gabout 19% of gross domestic product to stabilize the debt. revenue today is 14.5% of gdp the lowest it's been in 60 years. if we look at the last five times the budget has been 50 balanced in the last 50 years, here's what we see revenues had of to be close to 20% of gdp. there were 19.7% in 1969 19.9 in 1998 19.8 in 1999 from 20.6 2000,

in the year 2000 and 19.5 in 2001. that's t thime last five times the budget has been balanced. each of those times revenue was close to 20% of gdp. now it is 14.5. we seriously argue when you can solve this problem just on the spending side of the equation is not being serious. that mr. president, the framework that we offer today has revenue at 19.5% of gdp almost during the equivalent to what it was in the clinton years when we have and in ct balanced budgets and in factpay other stopped using social security money to pay of your bills. years during the clinton years, g.d.p revenue averaged 19.4% gdp. under our plan it averages of

19.5%. so the revenue is clearly notther out of line compared to the other times we balance the fa budget andct in fact during the lon clinton years when we have the longest economic expansion inr o theur nation's history for the colleagues who say you can't you'l touch revenue or you'll kill the economy and job creation. how about the historic record? the historic record showss when yohad clearly during the clinton years when you hadth revenue at the same tbhef ts level as we have in this plan you have the longest economic expansion in this nation's 32 of th history, 39 quarters, 42 duringe the clinton years. of the longest uninterruptedf period of economic growth in this nation's history revenue at the same level we are talking about in this plan.

mr. president, facts are stubborn things. a previous president said that. he was right. is the fact is we have the longest period of uninterrupted growth in wch in our economy during the turkoman which revenue is at the level that we are proposing ins a fac this budget.mr. pr that is a fact. framewo mr. president, the proposals in the budgetrk framework also seek we h av to bring us tax fairness. a tax reform that simplifies oo this tax reform loophole, protects the middle class improves the fairness of thein code, promotes economic growth in u.s. competitiveness because we lower the corporate rate from 45% to 29% to make america more competitive and we pay for it by

closing the corporate loopholes.ax we also address the tax capavs offshore tax havens and abusivehat tax shelters and in sure the corporations pay their fairf share. propol mr. president the specifics of the revenue proposal or else follows. the tax cuts the so-called bushehr tax cuts are extended u p for singles earning up tor $500,000 a year and couples dolla earning up to a million dollars a year. so mr. president, 99% of the american people will see note rate increase. none. 99% of the american people willreas see no rate increase. are 1% will and those are those sufficiently fortunate to be a milon d ol running over a million dollars a i year, the top 1% in the country and we ask them to go back to wit the rate of hthe clinton era for the top rate of 39.6%, a cap 2

gains at 20% dividends at 20%. those are the rates that pertainour nation' when we had the longest economic expansion in the nation's killhey've history. those who say it's a job killer they've got to come up here and explain how that can be sensed history shows something their different than their claim. provide mr. president, we also provideum tax for an alternative minimum tax relief. that costs $1.5 trillion.rease that's not a tax increase. lowerin g we are lowering the taxes that minimu would be imposed by the alternative minimum tax that is increingly increasingly gobbling up middle class tax payers and we arehappening preventing that from happening. it costs $1.5 trillion to fix so we are replacing that revenue a with of their revenue.se i don't consider that a tax increase. reve that is substitutingnu a revenue

for revenue we are subtracting to prevent middle class people from been caught up in the alternative minimum tax. we also reform the estate tax going back to 2009 levels at $3.5 million a person 7 million a couple that means over 99 per cent of estates would be completely exempt. . that is a fair plan. $2 tr il we also assume that $2 trillion of additional funds from tax t loops cutting tax subsidiesness promoting tax fairness that ishatax over ten years. we assume the tax preferences for individuals are reduced nine to 17% on the tax shelters that and w e are closed. i and we assume as i indicatedis

earlier that the corporate rate is lowered to 29% offset byexpendites and reducing the corporate tax loophol expenditures and closing corporate tax loopholes specificie policies to be determined by the finance committee as they always a are. mr. president, let me indicate when i indicate there is a range% for reducing tax expenditures from nine to 17% depending on how much savings we get out of the tax havens, here's the math. y over the next ten years the taxr tax preferences or tax expenditures as the sometimes called will cost the treasury $14 trillion.oophol let me repeat that. the loophole, the exclusions,the the preferences in the tax code will cost the treasury 14 trillion of the next ten years. on top of that offshore tax

havens and abusive tax sheltersnother will cost another $1.4 trillion.mittee on that's according to the subcommittee on investigations. no soth mr. president, if we recover to nothing from tax havens to reach'd the revenue numbers you would have to reduce tax expenditures on the 17%. but on the other hand, if you an recover 80% of tax haven losses and shelter losses, the have reduction in the tax expenditures would only have to be 9%. if you 17% reduction in tax no expenditures if you get no savings from tax havens and tax penditur shelters, 9% reduction in the tax expenditures if you recover 80% of the losses from tax s havens and tax shelters. probably the realistic

expectation of to be somewhere in between those extremes. mr. president if cbo scored the commit proposal btey the senate budget committee democrats they would not say there is any tax increase here at all. let me repeat that. if the congressional budget office scored this proposal and they would say there's a 765 billion-dollar tax cut over that ten years.here's how can that be? how can i say there's $2 trillion of additional the revenue over ten years and the congressional budget office saysn by if they evaluated this plan by a the senate budget committee democrats they would say there's a 765 billion-dollar cut the reason is simple to read in ours plan, we extend all of the middle class tax cuts.y in addition we actually brought

in the middle cl ass tax cuts so that nobody is affected by a couple rate increase unless a couple earning over a million dollars a year. minimum we also t provide the alternative minimum tax relief to prevent millions of middle class people from being affected by that. as i indicated earlier thathe cost $1.5 trillion over the next ten years to shield of middle provide class taxpayers and sir, we provide a state tax reform at 99% 2009 levels so that 99% of the shiel estates are completely shielded or completely exempt. mr. president, again, when their republican colleagues say, and some of them do you can't have on a higher tax rate even on those earning over a million dollars will tell if the economy.

how about looking at the facts? the how about looking out of thehow historic record what lly .. before? because when we look at history we find quite a different answer than our friends on the other side are providing. what we find is the last time the top rate for those earning a million dollars was 39.6% we experienced the longest period of uninterrupted economic growth in the history of the united states. that is a fact. we had 39 quarters of economic growth from 1991-2000. for 32 of those quarters, bill clinton was the president of the united states. and we had a top rate of 39.6% on those couples earning over a million dollars a year. mr. president, our friends on the other side say you'll kill jobs.

you know, it's fascinating. i remember this debate when we passed deficit reduction under president clinton and the friend on the other side said the exact same thing then. i remember i was seated here listening to the republican leader then claim that if we passed the clinton plan to get the deficit down and balance the budget we could crater the economy. those were the exact words that our friends on the other side used at that time that if you raised rates on the wealthiest among us, it would crater the economy. what happened? not only did we not crater the economy, we had the longest period of economic expansion in our nation's history and 24 million jobs created -- the best record ever. that's the facts. that's what really happened not some fairy tale here about what happens.

if you get the country back on track, if you move towards balancing the budget, if you move towards getting the debt down because that is, in fact, what happened during the clinton years. yes, we have a high rate of 6% on those making more than a million dollars but it didn't crater the economy, no, the economy grew. the longest economic expansion in this nation's history, and mr. president 24 million jobs were created during that period. the best record ever. mr. president, let's just look again at history. the last five times economic growth was above 4% in this country, the top tax rate was 39.6% on those earning over a million dollars. facts, facts are stubborn

things. growth rate 4.1%. 1997 top rate was 39.6% economic growth was 4.5%. 1988 4.4% economic growth 1999 4.8% economic growth. 2000 4.1% economic growth -- the strongest economic growth going back decades in every year the top rate on people earning over a million dollars was 39.6%, precisely what we're proposing in this plan. mr. president, i think it is undisputed by serious economists by whatever philosophical stripes that these tax expenditures have to be rained in. we are now spending $1.1 trillion a year on tax

expenditures. some of the most conservative economists in the country say that's spending by a different name. mr. president here's martin fellstein, chairman of the economic advisers under president reagan, and he's wrote a column about the tax expenditure solution for our national debt. he said, "cutting tax expenditures is really the best way to reduce government spending. it's called revenue but it's really spending. eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving and investment and risk taking and it also increase z overyawl efficiency by reducing distorting private decisions and consolidating the large number of overlapping tax based

subsidies and greatly simplifies tax filing. in short cutting tax expenditure is not at all like other ways of raising revenue." this is from the head of the economic advisers under president reagan saying we ought to cut tax expendtures. that's exactly what the senate democratic budget plan does. we cut tax extendtures 9%-17% depending on how much we're able to save from closing off these offshore tax savings and the abusive tax shelters. if we get no savings from tax havens and shelters, we have to reduce tax expenditures 17%. if we reduce tax havens and other loopholes the offshore loopholes, the abusive tax shelters by 80%, then we would be able to reduce tax

expenditures by 9%. mr. president, back to martin who said we ought to go after the tax expenditures, it's also alan greenspan. he said, "i think republicans ought to identify a very significant amount of so-called tax expenditures which, in fact, are misclassified. they are expendtures. they are outlays and many are subsidies, and subsidies are not the type of thing you want for an efficient market system. there are a lot of them." now, mr. president, that's what we're proposing. let's go after these subsidies these preferences and exclusions and after the offshore tax havens and abusive tax shelters. let's shut them down. if there's doubt about where the money is going, here it is. 26.5% of tax expenditures go to

the top 1% in this country. 26.5% of all tax expenditures go to the top 1% so when we're saying you may have to reduce tax expenditures 17% you could do it all just with the top 1% of those earning over $1.1 million a year because that's where the benefit is going. let me show you in another way. the top 1% in dollar terms the value on average of tax expenditures for those who are in the top 1% in this country earning $1.1 a year get a benefit on average every year of tax expenditures of $205,000. for those who are in the middle

class, those earning $39,000 a year their average benefit is $3,000. you can see that the top 1% have a benefit from tax expenditures that is 66 times what people in the middle get. mr. president, it is not unfair to go to those who have had the greatest benefit from the national economy over the last two decades and say to them we need you to help a little bit more to get out of this rut this debt rut that we're in and you know what? that's not unfair because they have had the greatest benefit over the last 15 years and

here's something that shows it i think conclusively. this is the effective tax rate for the 400 wealthiest taxpayers in america. in 1992, it was about 27%. in 1995 the tax rate of the wealthiest 400 was 30%, 29.9% to be exact. look what's happened since 1995. the effective tax rate for the wealthiest 400 taxpayers in america has gone to 16.6%. they had their tax rates cut almost in half okay? anybody else had their taxes cut in half? i don't think so. the people who've had their taxes cut in half are the wealthiest among us. it's not unreasonable to go back to them and say, hey wait a minute, we got to go back to

what the tax rates were here not back to an effective rate of 30%, but the top rate that we had in the clinton years with the largest economic and longest economic expansion in the nation's history. that seems reasonable. mr. president, we also know that it's not just on the individual side but on the corporate side as well. this is a little five story building down in the cayman islands, 18,857 companies say they're doing business out of this little building. anybody believe that? anybody believe 18,857 companies are doing business out of this little five-story building down in the cayman islands? i'd say that's the most efficient building in the world. can you imagine a little

five-story building 18 857 companies say they're going business out of there. they got maybe 100 employees in that building. those are the most efficient people in the entire world. unbelievable what they're doing. you know what? they're not doing business. they are doing monkey business. because what they're doing is cheating all the rest of us who pay what we owe. why are they down in the cayman islands, 18857 companies calling that building home? because there's no taxes down in the cayman islands and they are showing their profits in subsidiaries that they say are operating out of that little building so they can avoid paying taxes that the vast majority of us pay right here in the united states. that's outrageous. that's unfair.

our republican friends say, oh, you can't touch that, it's a tax increase if you do. really? that's a tax increase? i don't think so. mr. president, offshore tax haven abuse is prorifflating. if anybody doubts it, go google offshore tax haven and see what happens. see what happens if you google "offshore tax havens." the experts here on the subcommittee of investigations say this "experts have estimated that the total loss to the treasury from offshore tax evasion alone approaches $100 billion per year including $40-$70 billion from individuals, another $30 billion from corporations engaging in offshore tax evasion. abusive tax shelters adds tens of billions more." mr. president, the democrats on the budget committee said we've

had it. we're going to go after those people. we're going to insist they pay their fair share like the vast majority of americans already do. we're coming after you. you have a tax haven? we're coming after you. you have an abusive tax shelter? we're coming after you because it's not fair to the rest of us who pay what we owe. mr. president there are critical priorities that shouldn't be cut. one is education. education is the foundation for future economic strength and an educated population is a key source of economic growth, broad access to educational is by and large a major factor in the educational dominance in the 20th century and in the creation of a broad middle class. indeed the american dream of upward mobility both within and across jen railses --

generations has been tied to access to education. that's from harvard business, the future of inequality the other reason education matters so much. mr. president, when we see what our friends. on the other side are doing, they are cutting education 15%. we don't believe that that's the right priority for the country. yes, overall, spending's got to be cut. we do cut spending almost $2 trillion in the democratic blueprint, welcome $2 trillion -- almost $2 trillion, but not education. mr. president, another key priority is energy. we all know what's happened to gas prices. they soared from $1.81 a gallon in 2008 to over $3.50 a gallon on july 4th. i just paid $3.77.

we all know what's happened to gas prices, and many of us believe a key priority is to reduce our dependence on foreign energy. house republicans have a different idea. they cut the programs to reduce our dependence on foreign energy by 57%. we reject that proposal. we don't think it's in the national interest. mr. president, infrastructure roads, bridges airports,t9 airports, rail. here's what the u.s. chamber of commerce said about infrastructure spending. if we don't change course over the next five years the economy could forego as much as $336 billion in lost economic growth as transportation networks continue to deteriorate. i'm well aware of the fiscal constraints facing this congress and the nation, but we must avoid cutting off our nose to spite our face. without proper investment and attention to our infrastructure,

the united states economic stability, potential for job growth global competitiveness and quality of life are all at risk. that from thomas donohue the pr >> the president and ceo of the u.s. chamber of commerce. mr. president republicans in the house were not listening because they propose cutting transportation funding in their budget by 30%. we reject that cut as well. mr. president it does not make sense to cut education to cut infrastructure. does not make sense. it will only weaken our position, and on health care the house republican plan ends medicare as we know it, replaces it with a voucher system, blocks medicaid, shifts costs on seniors, children, and disabled in the individual states. it ends the couldn't cyclical

nature of the medicaid program and defunds health care reform increasing the number of unensured by at least 34 million people in this country. mr. president, the house republican plan they've said saves medicare. i don't think so. i think it kills medicare. why do i say that? because under traditional medicare now the beep fishery -- beneficiary pays 25%, someone who is eligible for medicare pays 25% of the bill. under the house republican bill they would pay 68% of the bill. that just stapedes things on their -- stands things on their head. instead of people having medicare as a social safety net when they get to their senior years, they would have it pulled out from under them. now, mr. president, we have rejected the house gop approach,

and would remind our colleagues that we've had large health care savings that were already enacted last year in health care reform. the congressional budget office says that will save in the second ten years 1.3 trillion dollars. yes, everything's got to be on the table, but we just took a big run at getting our health care costs back in line. $1.3 trillion in deficit savings according to cbo. mr. president in conclusion the overall -- the overview of the budget frame work that we're offering our colleagues for their consideration provides $4 trillion in deficit reduction over ten years. it's actually $5 trillion if measured on the same basis as the fiscal commission. we have adopted what we think is a more plausible baseline in light of things that happened so far this year.

stabilize the debt by 2014, cut the deficit to 2.5% of gdp by 2015 and 1.3% by 2021. we have tax reform that simplifies the code, closes loopholes, goes after offshore tax havens and abusive tax shelters and restores fairness rejects the plan to reject medicare as we know it protect education, energy infrastructure investments, have balanced deaf silt and deficit reduction plan cutting spend i by about $2 trillion. providing addition name -- revenue by about $2 trillion, and let me conclude as i began by saying our revenue plan would be scored by the congressional budget office as being a $765 billion tax cut because we are replacing revenue lost by

extending other tax cuts. we're extending all the middle class tax cuts and expanding middle class tax cuts up to those earning up to $100 million a year and we are fixing the alternative minimum tax. that costs $1.5 billion over ten years. i don't consider that is tax increase at all because you are reducing revenue that would otherwise come into the treasury under the alternative minimum tax that i think almost all of us think is unfair and replacing it with revenue by reducing tax expenditures that even the most conservative economists in the country say needs to be done. mr. president, that is the blueprint that senate budget committee lays before the colleagues. we are under no illusions here, and we know that this is a year in which the normal process is not being followed. we understand that there is a

leadership negotiation at the highest level so we understand this is not going to be dealt with in the normal course of business. we understand there's a leadership negotiation, but we believe there's some ideas in this package that deserve consideration as those negotiations go forward. mr. president, i thank my colleagues for their curtesy and their patients, and i look forward to this continuing debate as we take on the debt threat that looms over our nation. i thank the chair and yield the floor. >> senator kent conrad from earlier today laying out the democrat's plan. the senate gaveled out an hour ago, but before leaving they voted to move forward on a non-binding bill urging top income earners to make contributions to deficit reduction and expect them to

make dates on the floor tomorrow and leaders continue to meet with president obama for efforts to reduce the national deficit. follow the senate live here on c-span2 when members gavel back in on tuesday. >> i think by any measure it's effectively competitive industry. >> there's competitive that consumers should have access to. >> chris and matt wood of the consumer group free press discuss a new fcc report on choices consumers make in the wireless phone market. the communicators on c-span2.

>> jake sureman a reporter from "politico" join us by phone. there's been a lot of activity today between president obama and congressional leaders. have they made any headway? >> caller: much to do about nothing i guess. they are heading for a more narrow deal that only includes cuts but president obama still pushing for the big deal to cut $4 trillion although speaker boehner and cantor are backing away from that quickly and completely dismissed it by and large. we are getting closer to the

default date i guess you could say and no deal is really in sight, but they have a bisen group framework which who knows what that means and the outlines of it are not public but in the next couple days it seems like they will work a lot off of that. >> host: as you mentioned, president obama said he will not sign a short term measure to raise the debt ceiling. what happens if neither side reaches agreement there? >> guest: i think he's saying that now and i wouldn't pretend to know the president's thinking, but i think he would try to short term deal instead of defaulting. republicans in the house have said they don't want a short term deal either so they are on the same page as the president on this, but as a short term deal according to people in wall street and here in washington shows more uncertainty and that washington can't get together to do anything so it's a difficult -- it's a difficult negotiation and situation, but pram said today as you indicated this is a america, we don't do things in such short term

measures, but assuming he would do that rather than a default. >> host: does the fact that the president and speaker boehner held separate press conferences today indicate how the negotiations are going good or bad? >> caller: yeah. i think they are all trying to grab hold of the message which as we know is half the battle in washington. the majority leader cantor had his ability with capitol hill reporters today. you have boehner and the president, you know, they all want the clips on the nightly news and want to be out there in front of the people because it seems like, you know, the american people are just catching up on what this is because we never had these fights in washington bow over the debt ceiling. they are usually attached to other bills. they are starting to figure out that this is going to be a problem, and boehner who usually does one press availability a week as you said, did one today, and he'll probably do more as the week goes on to kind of try to grab hold of this. >> host: you mentioned cantor

holding his briefing with reporters and said raising taxes in ore session is a house starter for republicans. where is the room for compromise? >> caller: that's a question coming up more and more often which where are republicans willing to concede and where the concessions are from the right? what cantor is saying is that just voting on this is a concession but the kind of funny thing about that is saying this has to be raised and the debt ceiling has to be raised and everyone realizes it. it's tyke to make the argument that it's a concession. they are not saying there's revenues, just saying if you want to close the loopholes for oil and gas companies and corporate jets they have to be offset by cuts elsewhere so that argument is playing out more and more frequently as democrats try to get across the message that you have republican party that's just unwilling to give ontic. >> host: you mention a lot of back and forth. what happened to the idea of

getting that larger broader agreement like the $4 trillion plan of spending cuts and raising revenue? >> guest: what bane is trying to say what the speaker is saying is they were not going to agree to tax increases, and the president wanted to do entitlement reform and reform the tax code but wanted to hike taxes, and that was a nonstarter for republicans and, you know, any deal is going to have a tough time getting through the house no matter if it's just cuts because there's those like michele bachmann who say they are not voting for it, and others say it's not enough, and they want to get to yes but they are not going to get to yes, and sioux -- there's democrats who don't want entitlements as part of this thing so a grand compromise would have more, you know, to shoot at and to use a not great term but that's what it is. there's more to criticize in a deal and the less, i guess the thinking is the less you have the more basic it is, the easier

it will be to get 218 to move to the senate tennessee >> host: how much time do they have to reach an agreement and pass legislation before the august 2 defated line? >> caller: not many. it's already monday evening. we have this week the next week, and the week after that. that's not many days, 14 legislative days to get this deal done. obama wanted one done by the 2 #nd, which is just a week away. you know, i'm not -- it doesn't look at this point it doesn't look -- it looks like we'll be in for o long strenuous july. they have blue prints on the table, and if they can kind of go around those, that might provide hope in getting a deal done soon. >> host: jake sureman, thanks for the insight. >> caller: thanks for having me. >> i want to emphasize that nothing is agreed to until everything's agreed to, and the parties are still far apart on a

wide range of issues. >> the debt limb is the legal limit on borrowing by the federal government, and since 1962 has been raised 74 times the last time in february 2010. one more and follow the process of raising the debt ceiling on line. search watch clip, and share. it's washington your way. >> tuesday on washington journal, pennsylvania congressman doeses the negotiations on debt and deficit reduction.