much of that from the environmental impact statement and look for other things as well. >> the gentleman from colorado is recognized for 25 minutes. >> thank you mr. chairman. appreciate you holding this hearing and the gentlelady thank you so much for being here as well. i'm a westerner so there are a few things that are very important to us. our public lands, access to energy and truly to jobs. just as an aside, mr. holtrop when i read through your testimony you noted about the importance and just spoke to begin in the public input coming in and really want to encourage you when you are looking at closing off some of our forest lands that you to listen to the public testimony particularly in colorado.

mr. conrad: mr. president. the presiding officer: the senator from north dakota. mr. conrad: i ask further proceedings on the quorum call be dispensed with. following leader remarks, the senate will resume the motion to proceed to s. 1323, a bill to express the sense of the senate on shared sacrifice in resolving the budget deficit, with the time until 5:30 equally divided between the two leaders or their designees. at 5:30, there will be a roll call vote on the motion to proceed to s. 1323. mr. president, i understand that

s. 1340 is at the desk and due for a second reading. the presiding officer: the clerk will read the title of the bill for the second time. the clerk: s. 1340, a bill to cut, cap and balance the federal budget. mr. conrad: i would object to any further proceedings with respect to the bill. the presiding officer: the objection is heard. it will be placed on the calendar under the provisions of rule 14. mr. conrad: i thank the chair. 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 debt threat looming over this country that's as significant as anything we have faced in many years. mr. president, democratic members of the senate budget committee have worked for weeks to device a blueprint that they think has merit and that

deserves to be part of the debate, and so, mr. president, today i am here to outline the key elements of that budget blueprint. first of all, i think it's critically important that we all understand that we are as a nation borrowing 40 cents of every dollar that we spend. that is not a sustainable circumstance. admiral mullen, the chairman of the joint chiefs of staff, has indicated that our national debt is our biggest national security threat. this is the top military man in our country saying the debt threat is the most serious national security threat. why does he say that? well, because here are the facts. the debt of the united states, the gross debt, all of the debt that we owe is now approaching 100% of our gross domestic product, the highest level it's been since after world war ii.

this chart shows a threshold of 90%, a gross debt of 90%. why did we draw that line on this chart? because, mr. president, the best evidence we have tells us when you cross the 90% threshold on the gross debt of any nation, you are in the danger zone, you are in the red zone. the distinguished economist carmen reinhart and kenneth rogoff wrote a book "growth in a time of debt." here is there conclusion. we examine the experience of 44 countries spanning up to two centuries of data on central government debt, inflation and growth. our main finding is that across both advanced countries and emerging markets, high debt to g.d.p. levels, 90% and above, are associated with notably

lower growth outcomes. mr. president, this is a key fact all of our colleagues need to know. when your gross debt goes over 90% of your gross domestic product, your future economic prospects are diminished. that means fewer jobs created, fewer -- less economic opportunity, a nation that is at risk. mr. president, that's where we are. and look at what the congressional budget office says is where we are headed. on the current trajectory, we're headed for a debt that will go to 200% of the gross domestic product of the country. and this is not the gross debt. this is the publicly held debt, which is smaller than the gross debt. so this chart now looks at the publicly held debt and says that is headed for 200% of g.d.p.

mr. president, we cannot stay on this course. it is critically important that we change direction. for every one percentage point in interest that we pay, pay, $1.3 trillion is added to the debt. for those who say don't worry about the debt limit, let's remind them that what will occur if the united states refuses to pay the bills that it's already incurred is that the interest rates will go up. those who have loaned us money, if we renege on our commitments to pay them, will then insist on higher interest rates, all borrowers will insist on higher interest rates, and for every 1% increase in interest, we will pay $1.3 trillion more on our debt. so those who think somehow by not extending the debt limit we're going to help on the debt,

no, just the opposite is true. the debt will increase and increase dramatically. mr. president, here are the hard facts with respect to the relationship between spending and revenue over the last 60 years in this country. the red line is the spending line. the green line is the revenue line. and what this shows very clearly is that spending is the highest it's been as a share of g.d.p. in 60 years. yes, we have a spending problem. but it is not exclusively a spending problem, as some assert on this floor, because revenue as a share of g.d.p. is the lowest it has been in 60 years. to deny that essential fact is to deny the significant elements of a compromise that are required to solve this problem. mr. president, spending is the highest it's been in 60 years as

a share of our national income. revenue is the lowest it has been in 60 years as a share of our national income. both have to be addressed if we're going to solve this problem. and for those who say well, it's not a revenue problem, yes, it is. this is an article that appeared sunday, may 1, in "the washington post"." on the way to a surplus, a a $12 trillion u.s. detour." remember in 2001, we were told we were on the way to paying off the debt of the united states. this article by lori montgomery in "the washington post" on may 1 indicated the fundamental reasons that instead of paying off the debt, we have a debt that is mushrooming. this one paragraph says it all. the biggest culprit by far has

been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. together, 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 the $12.7 trillion swing from projected surpluses to real 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. so, mr. president, when democrats on the senate budget committee approached this problem, we looked at it in historical perspective. now 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. but we also cut so-called tax expenditures that are really just spending by another name. loopholes, exclusions, deductions, tax preferences, abusive tax shelters and tax havens that are hemorrhaging revenue that rightfully belongs in the treasury. people avoiding what they legitimately owe to the united states by engaging in abusive tax shelters and tax havens that is costing us substantial revenue, and we'll get into the specifics of that. the house republicans chose a different path. they only want to focus on half the problem. they only want to focus on the spending side of the equation. they don't want to touch the revenue side of the equation. mr. president, i believe that just denies reality. that runs away from the hard

reality of how did we get in this situation? and again, we got there by, yes, spending that is higher than it has been in 60 years as a share of national income, but also revenue that is lower than it has been at any time in 60 years. mr. president, if we're distrudgeful with ourselves, we're going to have to dpeel with both sides of this equation. mr. president, the plan that senate democrats on the budget committee have agreed on looks at a budget framework that includes roughly the same amount of deficit reduction as the house republican plan. in fact, we have somewhat more deficit reduction than did they. they have a plan that was $3.9 trillion of deficit reduction. our plan is $4 trillion.

mr. president, the actual difference is about $50 billion, but because of rounding, it turns out they're at $3.9 trillion. we're at $4 trillion. the actual disiches about $50 billion more in deficit reduction -- the actual difference is about $50 billion more in deficit reduction. so, mr. president, this is what happens to deficits as a share of g.d.p. under the framewor frk that we're offering. you can see, this year the deficit i is 9.3% of gross domestic product. we bring it down very steadily until we get down to 1.3% in the tenth year. and lower deficit in -- a lower deficit in similar terms as a share of g.d.p. thank the house republican plan. let me repeat that. the senate democrats on the budget committee, our plan, reduces the deficit by the tenth

year by more than the republicans in total and in the tenth year we have a lower deficit in dollar terms and a lower deficit as a share of g.d.p. mr. president, this is what happens to the debt itself, the gross debt. as you can see, it peaks out at 100% in 2011 and then we bring it down gradually but steadily to about 98% by 2021. the key is, instead of having the debt line going up, up, and away burying this country under a mountain of debt, we stablize the debt and begin to bring it down. something that every serious economist has said is absolutely essential. mr. president, in terms of spending, i indicated current spending is the highest it has been as a share of g.d.p. in 60 years. our plan takes that down from 24% of g.d.p. to 23% and then

freezes it at 22% of g.d.p. for the rest of this decade. now, some will say, there go the democrats again, they're spending too much money. i would say to them, if we could get the spending down to the levels that obtained during the reagan administration, would be acceptable, because exactly what we do. under the plan of senate budget committee democrats, we get spending down to the exact same level that pertained to the same level during ronald reagan. spending averaged 22.1% of g.d.p. that is precisely what our spending equals in the budget framework i outline here today. mr. president, we include every part of the federal budget, including the defense budget.

just as the fiscal commission did, just as every other bipartisan deficit-reduction plan has included, we looked to defense spending for savings, because no part of the budget can be off the table in terms of a deficit-reduction plan. i would say, separately, social security we deal with separately, because social security need not be, should not be part of a deficit-reduction plan. savings on social security ought to be for the purpose of extending the solvescy of social security. but in terms of those parts of spending that are considered on-budget, defense has to be included in any savings. why do i say that? well, look what's happened since 1997. spending on defense and war has gone from $254 billion a year to

$688 billion a year. it is a key reason spending has exploded. before the fiscal commission, some of the defense analysts, the best defense analysts in the country came before us and told us, 51% of all federal employees are at the department of defense p. 51% of all federal employees are at the department of defense. and that does not count the contractors. when i asked these analysts, well, how many contractors are there? their response was, senator, we can't tell you. i said, is that a matter of security? is that a matter of clearances? no, senator, we don't know. i said, well, what's the range? about how many contractors are there working at the department of defense? the answer was, senator, 1 million to 9 million.

between 1 million and 9 million. we can't tell you which is right. i mean, we've got a serious problem. -- of contractors working for the department of defense and the department of 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 this. "... the budget of the pentagon almost doubled during the last decade. but our capabilities didn't particularly expand. a lot of that money went into infrastructure and overhead and, frankly, i think a culture that had an open checkbook." mr. president, a lot of that money went into infrastructure and overhead -- overhead -- and, frankly, it culture that had an open checkbook.

mr. president, we can't afford an open checkbook anywhere. we've got to go after waste, fraud, and abuse in every department. we've got to go over infrastructure spending that really doesn't contribute to improving our defense. we've got to go after overhead -- overhead costs that have really run amok. mr. president, chairman ryan of the house said this about defense: "there are a lot of savings you can get in defense ... there's a lot of waste over there, for sure." and yet when they came with their plan, they continued the path of increasing defense spending year over year without any discipline. this is the plan that they outlined. from $529 billion a year headed for $667 billion a year. and that doesn't count the war funding. mr. president, in our plan, we have done what the fiscal commission called for. we have acheeched the same

savings out of -- we have achieved the same savings out of security as the fiscal commission did. $886 billion out of the security function. now, that includes defense. obviously defense is most of security. but in the security category, also falls homeland security, also is included veterans' spending. veterans' spending, by the way, is one place we don't cut a nickel. the veterans deserve to have the promises that we have made to them kept. and under our budget, every dollar that has been promised to veterans will go to them. mr. president, that doesn't mean we can't save money out of the security side and the fiscal commission, which by the way is the only bipartisan plan that has come from anywhere -- five democrats, five republicans, one independent -- endorsed a plan

with $886 billion of savings over ten years out of the security function. and the budget by the senate budget committee democrats adopts that finding. mr. president, the budget that the senate budget committee democrats are advancing also has government-wide savings. we freeze members of congress pay for three years. we freeze legislative branch and white house budgets for three years. we freeze civilian pay for two years. that is already -- that has already been adopted, but we include that in our budget. we reduce the federal vehicle fleet by 20% because, frankly, in our investigations, we find in this area that there has been an explosion of vehicles in the federal fleet, and i think all of us have seen it with our own

eyes. this is something that's got to be taken on. we reduce travel costs of federal agencies by 20%. we reduce federal printing costs by $1 billion by 2015. and we reduce the number of contractors that we have previously described. mr. president, the house republican plan on revenue is really almost impossible to believe. in a circumstance in which we have record debt, in a circumstance in which the revenue of this country is the lowest it has been in 60 years, what is part of their answer? cut taxes some more. and cut them for the very wealthiest among us. cut them another $1 trillion for those who are the most fortunate among us.

mr. president, i'm not making this up. this is the house republican plan. take a circumstance in which we have record debt, the lowest revenue we've had in 60 years, and cut taxes for the very wealthiest among us by another $1 trillion. by extending the top rate cuts, by a $5 million estate tax exemption. mr. president, they actually cut revenues $4.2 trillion below the c.b.o. baseline. let me repeat that. they actually cut revenue in their plan $4.2 trillion below the congressional budget office baseline. mr. president, that is inexplicable. maybe we can start to understand

it when we look at what a former reagan economic advisor said about the house republican plan. mr. bartlett said this: "distributionally, the ryan plan" -- the house republican plan -- "is a monstrosity. the rich would receive huge tax cuts while the social safety net would be shredded to pay for them. even as an opening bid to begin budget negotiations with the democrats, the ryan plan cannot be taken seriously. it is less of a wish list than a fairy tale ultimaterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. ryan's plan isn't even an act of courage; it's just pandering to the tea party. a real act of courage would have been for him to admit, as all serious budget aifnlgts know, that revenues will have to rise well above 19% of gross domestic

product to stablize the debt." mr. president, revenue today is 14.5% of g.d.p.; again, the lowest it's been in 60 years. if we look at the last five times the budget has been balanced, in the last 50 years, here's what we see: revenues had to be close to 20% of g.d.p. they were 19.7% in 1969, 19.9% in 1998, 19.8% in 1999, 20.6% in the year 2000, and 19.5% in 2001. that's the last five times the budget has been balanced. each of those times revenue was close to 20% of g.d.p. now it is 14.5% of g.d.p.

anyone who seriously argues that you can solve this problem just on the spending side of the equation is not being serious. mr. president, the budget framework that we offer today has revenues at 19.5% of g.d.p., almost equivalent to what it was during the clinton years when we had balanced budgets and in fact stopped using social security money to pay other bills. during the clinton years, revenue averaged 19.4% of g.d.p. under our plan, it averages 19.5%. so revenue is clearly not out of line compared to the other times we've balanced the budget and in fact during the clinton years when we had the longest economic expansion in this nation's history. for our colleagues who say, oh, you can't touch revenue or you'll kill the economy, you'll kill job creation, really?

how about the historic record, the historic record shows very clearly that during the clinton years when you had revenue at the same level as tbhef this plan, you had the longest economic expansion in this nation's history -- 39 quarters, 32 of those quarters during the clinton years. the -- the longest period of uninterrupted economic growth in this nation's history. and you had revenue at the same level that we're talking about in this plan. mr. president, facts are stubborn things. facts are stubborn things. a previous president said that. he was right. the fact is, we had the longest period of uninterrupted growth in our economy during a period in which revenue was at the

level that we are proposing in this budget. that is a fact. mr. president, the proposals in the budget framework also seek to bring us tax fairness. we have tax reform that simplifies the tax code, scales back tax loopholes, protects the middle class, improves progressivity and fairness in the code, promotes u.s economic growth and u.s. competitiveness. because we lower the corporate rate. we lower the corporate rate from 35% to 29% to make america more competitive. and we pray for it by closing corporate loopholes. we also address the tax cap, offshore tax havens and abusive tax shelters and ensure that corporations pay their fair share. mr. president, the specifics of our revenue proposal are as follows. the tax cuts, the so-called

bush-era tax cuts, are extended for singles earning up to $500,000 a year and for couples earning up to a million dollars a year. so, mr. president, 99% of the american people will see no rate increase, none. 99% of the american people will see no rate increase. 1% will and those are those sufficiently fortunate to be earning over a million dollars a year. they're the top 1% in this country, and we ask them to go back to the rates of the clinton era with a top rate of 39.6%, cap gains rate at 20%, dividends rate at 20%. those are the very rates that pertained when we had the longest economic expansion in our nation's history. for those who say it's a job killer, they've got to come up here and explain how that can be since history shows something quite different than their

claim. mr. president, we also provide for alternative minimum tax relievrelief. that costs $1.5 trillion. that's not a tax increase. we are lowering taxes that would be imposed by the alternative minimum tax that is increasingly gobbling up middle-class taxpayers. we're preventing that from happening. it costs $1.5 trillion to fix so we're replacing that revenue with other revenue. i don't consider that a tax increase. that is merely substituting revenue for revenue that we are subtracting to prevent middle-class people from being caught up in the alternative minimum tax. we also reform the estate tax. going back to 2009 levels, which are $3.5 million a person, $7 million a couple. that means well over 99.5% of

estates would be completely exempt. mr. president, that is a fair plan. we also assume net $2 trillion of additional funds from closing tax loopholes, cutting tax subsidies, promoting tax fairness. that is over ten years. we assume that tax preferences for individuals are reduced 9% to 17% depending on the amount of offshore tax havens and abusive tax shelters that are closed. and we assume, as i indicated earlier, that the corporate rate is lowered to 29%, offset by reducing corporate tax expenditures and closing corporate tax loopholes, specific policies to be determined by the finance committee, as they always are. mr. president, let me indicate, when i indicate that there is a

range for reducing tax expenditures from 9% to 17% depending on how much savings we get out of offshore tax havens, here's the math. over the next ten years, the tax preferences, or tax expenditures, as they're sometime called, will cost the treasury $14 trillion. let me repeat that. the loopholes, the exclusions, the preengsz in the tax code will -- preferences in the tax code will cost the treasury $14 trillion over the next ten years. on top of that, offshore tax havens and abusive tax shelters will cost the treasury another $1.4 trillion. that's according to the permanent subcommittee on investigations. so, mr. president, if we recover nothing from tax havens, to reach our revenue numbers, you'd have to reduce tax expenditures

17%. but on the other hand, if you recover 80% of tax haven losses and tax shelter losses, the reduction in tax expenditures would only have to be 9%. 17% reduction in tax expenditures if you get no savings from tax havens and tax shelters. a 9% reduction in tax expenditures if you recover 80% of the losses from tax havens and tax shelters. probably the realistic expectation ought to be somewhere inbetween those extremes. mr. president, if c.b.o. scored the proposal by senate budget committee democrats, they would not say there's any tax increase here at all. let me repeat that. if the congressional budget office scored this proposal by

senate budget committee democrats, they would say there's a $765 billion tax cut over ten years. well, how can that be? how can i be saying there's $2 trillion of additional revenue over ten years and the congressional budget office says if they evaluated this plan by senate budget committee democrats, they'd say there's a $765 billion tax cut? the reason is simple. in our plan, we extend all of the middle-class tax cuts. in addition, we actually broaden the middle-class tax cuts so that nobody is affected by a rate increase unless they're a couple earning over a million dollars a year. we also provide the alternative minimum tax relief to prevent millions of middle-class people from being affected by that law.

as i indicated earlier, that costs $1.5 trillion over the next ten years to shield middle-class taxpayers from that law. and, third, we provide estate tax reform at the 2009 levels so that well over 99% of estates are completely shielded, are completely exempt. mr. president, again, when our republican colleagues say, some of them do, "well, you can't have a higher tax rate even on those earning over a million dollars, it will kill the economy." really? how about looking at facts. how about looking at the historic record. how about being informed by what has actually happened 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 what's fascinating? i remember this debate back when we passed deficit reduction under president clinton. and you know our friends 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 would 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 were 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 toward balancing the budget, if you move toward getting the debt down. because that is, in fact, what happened during the clinton years. yes, we had the highest rate of 39.6% on those earning over 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. 1994, top rate was 39.6%. 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. 39.6%, precisely what we're proposing in this plan. mr. president, i think it is undisputed by serious economists of whatever philosophical stripe that these tax expenditures have to be reined in. we are now spending $1.1 trillion a year on tax expenditures. some of the most conservative economists in the country have said that's just spending by a different name. mr. president, here's martin feldstein, professor of economics at harvard, chairman of the council of economic advisors under president reagan, and he's written a column called

"the tax expenditure solution for our national debt." here's what 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, investment, or risk taking. it would also increase overall economic efficiency by removing incentives that distort private spending decisions and eliminating or consolidating the large number of overlapping tax-based subsidies but also greatly simplify tax filing. in short, cutting tax expenditures is not at all like other ways of raising revenue." this is from the head of the economic advisors under president reagan saying we ought

to cut tax expenditures. that's exactly what the senate democratic budget plan does. we cut tax expenditures 9% to 17% depending on how much we are able to save from closing off these offshore tax havens and the abusive tax shelters. if we get no savings from tax havens and tax shelters, then we'd have to reduce tax expenditures 17%. if we're able to reduce tax havens and the other loopholes, the offshore loopholes, the abusive tax shelters, by 80%, then we'd be able to reduce tax expenditures by 9%. mr. president, it's just not martin feldstein who said we ought to go after those tax expenditures. it's also alan greenspan, the former chairman of the federal reserve. here's what he said. "i think that the republicans ought to identify a very significant amount of so-called tax expenditures which in fact

are misclassified. they are expenditures, they are outlays and many are subsidies and subsidies are not the type of thing that you want for an efficient market system. there are a lot of them." mr. president health care reforms that's what we're proposing. let's go after these subsidies, these subsidies, these exclusions. while we're at it, let's go after these offshore tax havens, abusive tax shelters. let's shut them down. if there is any doubt about where this 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%, 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 million per year, they get on average a benefit every year from tax expenditures of over $205,000. for those who are in the middle quintile, 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 raeult for the 4 hundred -- 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 down to 16.6%. they have 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 have had their taxes cut in half are the wealthiest among us, so it's not unreasonable to go back to them and say, hey, wait a minute, we've got to go back to what the tax rates were here. not back to an effective rate of 30%, but a top rate that we had in the clinton years when we had the largest economic and longest economic is expansion in our

nation's history. that seems reasonable. mr. president, we also know 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 would say that's the most efficient building in the world. can you imagine, a little five-story building, 18,857 companies say they're doing 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're 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, 18,857 companies, calling that little building home? because there are no taxes down in the cayman islands, and they're 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 proliferating. if anybody doubts it, go google

offshore tax havens and see what happens. see what happens if you google offshore tax havens. the experts here on the permanent subcommittee on investigations have said this. experts estimated the total loss to the treasury from offshore tax evasion alone approaches $100 billion a year including $40 billion to $70 billion from individuals, another $30 billion from corporations engaging in offshore tax evasion. abusive tax shelters add tens of billions more. mr. president, the democrats on the budget committee said we've had it. we're going after those people. we're going to insist that they pay their fair share just like the vast majority of americans already do. so we're saying we're coming after you. you've got a tax haven. you're down in the cayman islands, we're coming after you. you've got an abusive tax shelter, we're coming after you.

it's not fair to all the rest of us, we're paying what we owe. mr. president. mr. president, education is the foundation for future economic strength. an educated population is a key source of economic growth. broad access to education was by and large a major factor in the united states economic 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 generations has been tied to access to education. this from harvard economist claudia golden and lawrence katz, "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're 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. almost $2 trillion, but not education. mr. president, another key priority is energy. we all know what's happened to gas prices. they have soared from $1.81 a gallon in december of 2008 to over $3.50 a gallon by july 4. 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, 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 president and c.e.o. of the u.s. chamber of commerce. mr. president, republicans in the house weren't listening,

because they proposed cutting transportation funding in their budget by 30%. we reject that cut as well. mr. president, it does not make sense to cut education, cut infrastructure. it does not make sense. it will only weaken our position. and on health care, the house republican plan ends medicare as we know it, replace it is with a voucher system -- replaces it with a voucher system, block grants kphaeudz, -- medicaid. it ends the countercyclical nature of the medicaid prafplt and it defunds health care reform, increasing the number of uninsured by at least 34 million people in this country. mr. president, the house republican plan, they've said it saves medicare. i don't think so. i think it kills medicare.

why do i say that? because under traditional medicare, now the beneficiary pays 25%. somebody who is eligible for medicare pays 25% of the bill. under the house republican plan, they would pay 68% of the bill. that just 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. mr. president, we have rejected the house g.o.p. approach and would remind our colleagues that we have 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. so, 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 c.b.o. mr. president, in conclusion, the overall -- the overview of the budget framework 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 have happened so far this year. stabilize the debt by 2014, cut the deficit to 2.5% of g.d.p. by 2015 and 1.3% by 2021. we have tax reform that simplifies the code, that closes loopholes, that goes after offshore tax havens and abusive