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Mr. CARPER. Mr. President, I will talk, as my colleague has, about the Federal budget, the budget resolution that has been prepared for our consideration as a result of the conference that has occurred between the House and Senate. I express my thanks particularly to the chairman of the committee, Senator Conrad, for the work he and his staff and other members of the committee have done, Democrat and Republican, including Senator Gregg.
I wish to respond a bit to what my colleague from Texas said. This administration didn't inherit a day at the beach. They have inherited a tough situation. We as a country have been around sort of officially since 1787, and if you go from 1787 to 2001, I think that is about 214 years. We ran up in that period of time roughly $5 trillion worth of debt. We essentially doubled that over the last 8 years. We doubled it in only 8 years. We ran up as much new debt in the last 8 years as we did in 214 years as a nation. I didn't hear nearly the kind of bemoaning and railing about the growth in the deficit and the national debt during those 8 years as we hear today from our friends on the other side of the aisle.
I think my colleagues know I am not a real partisan guy, but I think it is important to say this is the hand we have been dealt. The question is what do we do about it. We have a couple of wars we are fighting. We have an economy that is the worst since the Great Depression and we have to do something about it. One of the first things we have decided to do about it is to try to jolt the economy back to life. I remember those old Frankenstein movies where Dr. Frankenstein is in the lab trying to put the electrodes to the monster and jolt that monster back to life. We are trying to jolt not a monster back to life but an economy back to life. Economists on all sides--liberal, conservative, and everything in between--have said, you have to spend a lot of money and hopefully it will be used to produce jobs and add to the value that will be for a good purpose in our country.
That is what we have done with the stimulus package. As we go through this year, and probably the next year or so, the deficit is going to be a whole lot bigger than I am comfortable with. I was elected to the House and served there for 10 years before I became Governor. I was a deficit hawk and in my heart I still am. I wish to talk about some things we can do, ought to do, and in some cases are doing, to bring the deficit down further.
I am encouraged when I hear our new President say the deficit is large this year, but over the next 4 years we will reduce the deficit in half. I think that is fine. The important thing is we don't just stop there, and if we have the same administration or a new one, it is important that we continue to make progress and drive the deficit back to zero. I am one of those people who thinks it is appropriate to spend when we are in a time of economic calamity, when we are in a time of war, and as it turns out right now we are in both. Hopefully, 4 years from now--hopefully sooner than that--we won't be in both and we can turn back our spending. When the economy is sound, when we are not in a national disaster, in war in places around the world, I think it is appropriate to balance our budget. In fact, one of the things I was proudest of as Governor is we not only balanced our budget for 7 years in a row, we reduced taxes and paid down our debt a little bit, and that made me proud, and the legislature too. Hopefully, we will be in a position in the years to come, as we were in 1999 and 2000, when we paid down the debt.
I have suggested to the administration some things we can do, and I have talked about them here on the floor, to reduce the deficit. I wish to talk about one of them and mention one of the others as well. In order to better match revenues and expenditures going forward, we obviously cannot avoid the question of taxes. As far as I am concerned, before we start raising a lot of taxes, the first thing--maybe the better thing--for us to do is to collect the taxes that are owed. Every year we hear about the tax gap. The last one was actually officially done, I think, about 8 or 9 years ago by the IRS and they figured that at the time we had a tax gap--monies owed to the Treasury, not being collected by the Treasury--of about $300 billion a year. By most estimates I hear today, it is almost $400 billion a year. If we can only recover half of it or a third of it, we are talking about real money that would make a real dent in our deficit.
We make a lot of improper payments in this Government of ours. I chair a subcommittee that has jurisdiction over that sort of thing. We know our improper payments that we made into the Federal Government last year were right around $72 billion, mostly overpayments, some underpayments. We need to do a better job. At least we know now for the most part where the improper payments are going, or at least the departments that are making them, but we are not doing a very good job of actually going back, after we have made an overpayment, especially, and recovering the money, recapturing that money. We call it postaudit cost recoveries. We are just beginning to scratch the surface in one of our big entitlement programs, Medicare. Starting about 3 years ago we hired some private firms and said, For monies we have overpaid to providers or medical suppliers, corporate suppliers, let's go back and get the money we have overpaid. We said we were going to do it in three States--California, Texas, and Florida. The first year of this effort we recovered almost nothing. The second year we recovered a little bit. Last year we recovered about $700 million. That is real money. The idea is not to just do it in 3 States but to do it in all 50 States, and I am encouraged that we are going to do that. If we can recover that kind of money for overpayments in Medicare, my guess is we could recover some money in Medicaid. If we have two of our three big entitlement programs that are sucking up a lot of money, one of the first issues we should face there is reducing the overpayments and going after the money and recovering that money we have overspent or, in some cases, misspent.
The third area we need to focus on is the area of major weapons systems. We have spent a lot of money. Going back to I think it was 2000, we were overspending on major weapons systems cost overruns by about $50 billion in 2000. In 2005 we were up to $200 billion. Last year we were close to $300 billion in major weapons systems cost overruns. Clearly that is an area where we can do better and have to do better. Secretary Gates has come forth with a number of proposals and reforms that deserve our support, and I hope they will enjoy our support as we go forward, to try to better align our weapons systems with buying for the kinds of wars we are likely to fight. We could do a much better job in terms of controlling our costs for those weapons systems as well.
The Federal Government owns a lot of property, not just land, not just military bases, not just buildings, but all of the above, and in some cases we don't use them. We pay security for those properties, we may pay utilities for those properties, but we don't use them. We don't do a very good job of disposing of properties that are not being used. We need to dispose of those properties. Those are only a couple of things we can do and ought to be doing. I hope in the years to come we will do more of each of those.
One other thing I would mention is most Governors have what we call line item veto power--the ability to go and line out a single line item in a budget. They have it by virtue of the Constitution so they can veto bills, they can go through the lines of their bills and veto lines and different pieces of a spending package that they have signed into law. We have something like that in the Federal Government. It is called rescission power. The President can sign an appropriations bill into law, submit that to the Congress, and the Congress can vote it up or down. But if we don't do anything, then it kind of goes away. The President sends rescission messages to us from time to time and we don't do anything, and the rescission of the proposal sort of goes away.
If we go back to 1995, 1996, there was a proposal in the Clinton administration that changed that. The idea was to make the President's rescission powers look more like line item veto powers. I thought it was a flawed effort. I think line item veto powers are oversold in terms of their value of reducing the deficit, but there is some virtue there. They are a good tool to have in the toolbox. But in 1995, 1996, what they came up with, it passed here in the House and Senate and it was signed into law. The President proposes a rescission, the Congress has to vote on it, and unless they vote it down with a two-thirds vote in the House and in the Senate, that proposed rescission is going to become law. Think about that. We are not talking about a bill. We are saying a line or a couple of lines in a bill, the President could propose to rescind those and his recommendations on rescinding spending in an appropriations bill or a tax bill or an entitlement bill, or all of the above, would actually become law unless two-thirds of the House and the Senate said no, we are going to override that. That is a huge shift of power from the legislative branch to the executive branch. I didn't think it was a good idea then. The Supreme Court didn't think it was a good idea either. If not the Supreme Court, one of the top circuit courts of appeal said they didn't think it was a good idea. They threw it out for being unconstitutional.
Having said that, I think the idea of at least compelling us to give a Presidential rescission a day in court, a day on the floor, is a good idea. What a number of us, 21 of us have done, is we have cosponsored legislation that we introduced this week, Democrats and Republicans. The idea behind the legislation is when the President signs a spending bill--not a tax bill, not a revenue bill, not an entitlement measure, but when he or she signs an appropriations bill into law, he or she would have the right to send us a rescission message to propose to reduce or rescind spending in that spending bill. We would constrain how much the President could rescind. He couldn't rescind more than 25 percent. If they are unauthorized, there is no limit. The long and short of it is, though, the President would send a rescission message and we would have to vote on it. We could vote it down with a simple majority; in the Senate, 51 votes, or in the House with 218--not a two-thirds override, not both Houses, just a simple majority in either the House or the Senate. We limit the time for this to occur. In fact, we limit the amount of years that this could be law to 4 years--4 years. I call it a 4-year test drive with enhanced rescission powers for a President. If the President abuses it, if the President should say to the Presiding Officer from New Mexico: Unless you vote for my top priorities, I am going to go after your top priorities, to try to intimidate a Member of the Senate or House--that could happen. As a result, we provide for this 4-year sunset. After that, the law goes away. If Presidents, current or future, continue to abuse this, they will not continue to enjoy this particular balance.
Do I think this will balance the budget? No, I don't. Do I think it might be of some help? Yes, I do.
I will close with a comment on earmarks. Some people think earmarks are the devil's work. The earmarks that we submit in my State--Senator Kaufman and myself, Governor Castle before he became Governor--were earmarks that we are proud of. We have three budgets in Delaware State government, and one of the major budgets is the operating budget which basically runs the State. The second is the capital budget--bricks and mortar, schools, roads, prisons, and that sort of thing. The third piece of our budget, the third budget, if you will, is something called a grant and aid budget. The Governor proposes the operating budget. The Governor proposes the capital budget in my State. The Governor doesn't propose the grant and aid budget in my State. That comes from the legislature. We found in the 1990s that the grant and aid budget was growing like Topsy, kind of crowding out spending in the operating budget and the capital budget. What we decided to do was put a constraint on the growth of the grant and aid budget, no more than 2 percent; no more than 2 percent of revenues. That put a halt to the growth and kind of put things back on the right keel.
With respect to earmarks, among the things we have done here--there is nothing inherently wrong with earmarks, directed spending, but when they are growing like Topsy, as they were for a while, that is not a good thing. We have now decided to limit earmarks to 1 percent of revenue which I think is appropriate.
The second thing we didn't know for the longest time is where the earmarks were coming from and who was asking for them. We didn't know necessarily who was going to benefit from the earmark. We have addressed that so we know both.
The other thing I believe we have addressed is called air drops, where you have a conference committee with the House and Senate on appropriations bills, you don't have an earmark in either one, yet out of the conference committee emerges an earmark from somebody and we don't know where it came from and it wasn't in either bill. That shouldn't be allowed.
The last thing I would mention is at the end of the day, you have the ability for the President to look through a bill, whether with earmarks or other forms of spending, and say maybe this is a bad idea. This is an egregious form of spending. It should be addressed, and basically say to us in the Senate or the House: I have signed this bill into law, but I wanted to come back and vote on a couple specific items. If I cannot get 50 colleagues to vote for an earmark that I have made on behalf of Delaware, I should probably not be asking for that earmark in the first place. That is the long and short of it.
There are a lot of things we can do to continue to make progress. We are getting down to 3 percent of GDP in the next 4 years, and I applaud that. There are other things we want to do. I look forward to working with the chairman. Those are just a few of the ways we can make additional progress.
I applaud the chairman, and I thank him for all his work. I cannot imagine what it is like to bear the burden of this or any budget, but he has done it well and in good humor for a long time.
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